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Grants versus Fiscal Aid: In Search of Economic Rationality

Phedon Nicolaides

Although Member States are free to use any form of aid they wish, the European Commission’s Scoreboard reveals that they have a very different propensity to use fiscal measures (tax exemptions or tax deferrals). A handful of Member States account for the majority of all aid in fiscal form. The paper argues that fiscal aid is more favourable to beneficiary companies. This may induce them to invest more in countries that grant fiscal aid.
Keywords: Form of Aid, Grants, Fiscal Aid

Professor at the College of Europe and at the University of Maastricht.


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