Focus on Crisis Management and Sustainable Development

Competition Policy in Europe – Temporary or Long-Lasting Changes?

Changes of the Principles and the Practice of State Aid during the Crisis

Éva Voszka
University Professor, University of Szeged, Associate of Financial Research Plc.

Published in: Public Finance Quarterly 2012/1 (p. 71-90.)

Summary: During the first phase of the global crisis, the scale and scope of state aid increased at an unprecedented rate all over the world. Although their approval is – uniquely – part of competition policy in the European Union, the Commission and DG Competition did not oppose the unprecedented expansion of state aid. On the contrary, they played an active role in the modification and enforcement of frameworks. The paper analyses how EU regulation, prohibiting state aid for distorting competition, might be compatible with recent developments in this field. It comes to the conclusion that the European Commission proved to be strong enough to keep the regulation of distribution methods under control and to try to enforce the basic principles, but was unable to stem the tide of aid. By doing so, it contributed to the accumulation and growth of state deficits, the repeated destabilisation of financial markets and sovereign debts, and thus to the escalation of the second wave of the financial crisis in Europe in 2011.

Keywords: competition policy, state aid, crisis

Journal of Economic Literature (JEL) kód: H25, H63

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