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EU State Aid Control: The Quest for Effectiveness

Vincent Verouden

Over the years, there has been a growing willingness at the level of both the EU and the member states to consider the effectiveness of State aid in pursuing public policy objectives. This has resulted in stricter requirements as regards the incentive effect criterion in the compatibility assessment of aid and in the introduction of an ex post evaluation requirement for large aid schemes. This article reviews the main policy choices in the recent State Aid Modernisation (SAM) in this regard and considers the nexus between the incentive effect of aid and distortions of competition and trade.
Keywords: Compatibility of Aid, Incentive Effect, Distortion of Competition, Effect on Trade

Vincent Verouden, Ph.D., is Director at the Brussels office of E.CA Economics and former Deputy Chief Economist at the European Commission, DG Competition. An earlier draft of this article was originally presented as an input statement for the SHAPE workshop ‘An Enquiry into the Forces Shaping Subsidy and State Aid Laws,’ University of Birmingham, 18-19 May 2015. The author is indebted to numerous persons (both inside and outside of DG Competition) for having helped him to shape his views on the subject of State aid control. The views expressed in this chapter are those of the author alone.


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