Goals and Roles of the EU State Aid Regulation

Author Name AOYAGI Yuka (Yokohama National University)
Creation Date/NO. November 2017 17-J-070
Research Project Comprehensive Research on the Current International Trade/Investment System (pt.III)
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This study attempts to reveal the goals and roles of the European Union (EU) state aid regulation. EU state aid regulation controls the aid given to undertakings by EU member states. In order to achieve political goals, states often resort to granting aid to undertakings. Aid may take various forms of economic benefits, such as subsidies and tax exemption. Understanding that the decision to grant aid is a part of the sovereign right of the state to design and enforce its policy in its country, EU state aid rule appears to be a highly strong restriction and intervention toward the sovereign right of the member states as it limits the room for the member states'choice of measures to attain their own policy goals. The introduction of such a powerful regulative tool envisaged to ensure and maintain the competition in the internal market, albeit trade policy sentiment was observed in the legislative preparatory work. Although literature still often emphasizes the trade policy purpose as well, the Court of Justice of the European Union (CJEU) and the European Commission have mainly explained state aid to have a competition ensuring purpose. After the 2000s, the European Commission issued policy papers which imply a new role for the state aid rule as a measure to achieve economic and integration policy at the EU level.