The New Political Economy of EU State Aid Policy

Abstract

Despite its importance and singularity, the EU's state aid policy has attracted less scholarly attention than other elements of EU competition policy. Introducing the themes addressed by the special issue, this article briefly reviews the development of EU policy and highlights why the control of state aid matters. The Commission's response to the current economic crisis notably in banking and the car industry is a key concern, but the interests of the special issue go far beyond. They include: the role of the European Commission in the development of EU policy, the politics of state aid, and a clash between models of capitalism. The special issue also examines the impact of EU policy. It investigates how EU state aid decisions affect not only industrial policy at the national level (and therefore at the EU level), but the welfare state and territorial relations within federal member states, the external implications of EU action and the strategies pursued by the Commission to limit any potential disadvantage to European firms, and the conflict between the EU's expanding legal order and national.

Housing and positive European integration: permissible state aid for improving the urban environment

“…Although competition takes place through markets, enterprises may avoid those markets where competition is most fierce, because that is where margins are generally lowest; rather, they may choose markets with less competition (Fligstein and Dauter, 2007) to find 'shelters from price competition' (Fligstein 1996, 659), such as, by receiving state aid (Kassim and Lyons 2013). One aim of the single European market was to break through these 'shelters' by changing the rules of exchange (Fligstein and Mara-Drita 1996).…”

State Aid Policy in the European Union

“…Although state aid has been effectively controlled by the European Union in recent years, establishing a well‐functioning system for the control of state aid took a very long time. There are several reasons behind this delay (Kassim and Lyons, , pp. 3, 4).…”

“…Third, member countries were not eager to co‐operate with the Commission in order to operationalize the articles of the treaty and to comply with the obligations imposed. However, in conjunction with the announcement of State Aid Action Plan (SAAP), whose main aim is ‘less and better targeted state aid’ (Commission of the European Communities, ), state aid rules have become more transparent and easier to implement (Kassim and Lyons, , p. 11). Thus, oversight of member countries’ state aid policies is much better now in comparison to ten years ago.…”

“…The hike in 1997 stems from the huge increase in French sectoral aid because of the Credit Lyonnais case ((Hölscher, 2010, p. 10; Kassim and Lyons, , p. 11).…”

The electoral foundations to noncompliance: addressing the puzzle of unlawful state aid in the European Union

“…Second, determining noncompliance is straightforward as national governments can implement state aid only upon notification to and approval by the Commission. Third, this procedure has been consolidated over the past few decades (Cini and McGowan 2008, 175; Aydin and Thomas 2012, 533–537; Kassim and Lyons 2013, 8–9). Data on EU state aid are now comprehensive in terms of coverage of transactions and economic sectors and are highly comparable across countries as they fall under common EU legal criteria (Franchino and Mainenti 2013).…”