Explain and discuss the effectiveness of the EC Treaty provisions concerning state aids in preventing distortions to the operation of the single market
Table of Contents
- Introduction.
- The effectiveness of the EC Treaty provisions concerning State aid.
- The necessity of State aid control.
- The scope of Articles 87 to 89 of the EC.
- The limits of State aid control.
- The procedural framework of State aid control and the separation of powers between the Commission and the national courts.
- The difficult enforcement of the Commission negative decisions.
- Conclusion.
- Bibliography.
SummaryAs recognised by the EC Treaty, state aids are important and necessary policy instruments to achieve social and economic goals. However, depending on the way in which they are given, State aids can have a material impact on competition, leading to significant distortions to the common market. An unfairly given aid might for instance allow the recipient undertaking to increase its market share to a level at which it has enough power to behave independently of competitive pressures. The EC Treaty provisions concerning State aids seek to minimise these potential distortions of competition in Articles 87 to 89. As repeatedly emphasised by the European Commission, competition policy is 'essential for the completion of the single market'. State aid control therefore seeks to preserve the effective operation of the single market by promoting a 'level competitive playing field' between all undertakings in the European Union. This essay will explain the general prohibition of State aid and its exceptions in the EC Treaty. It will argue that the basic rules set out in the EC Treaty have allowed for the development of a comprehensive corpus of secondary legislation and case law, laying the foundations for a strict system of State aid control.
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