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Article 346(1) TFEU and Strategic Autonomy:

A Possible Loophole to Grant State Aid in the Context of Geopolitical Struggles?

Wout De Cock, Gregory Kegels, Caroline Buts, Cind Du Bois


Keywords: Article 346(1)(b) TFEU, (open) strategic autonomy, investments, essential security interests, dual-use goods, R--amp--D, defence sector

The current geopolitical situation has led to various calls for investment in Europe’s strategic autonomy, for example with regard to the defence and security sector. However, the possibility for Member States to grant financial support is restricted by EU State aid law, leading some stakeholders to argue that there is a friction between the geopolitical need to invest in Europe’s strategic autonomy on the one hand, and EU State aid law on the other. In this contribution, we examine whether Member States could avoid and/or alleviate this friction by invoking Article 346(1)(b) TFEU. This Treaty provision, often overlooked by legal scholars, stipulates that Member States may, in principle, take all measures they consider necessary for the protection of their essential security interests, without having to consider EU State aid law. By analysing relevant case-law of the EU Courts, however, we argue that the aforementioned Treaty provision has a limited scope, and that, therefore, Member States, in principle, must comply with the EU State aid rules when they contribute to Europe’s strategic autonomy.
Keywords: Article 346(1)(b) TFEU; (open) strategic autonomy; investments; essential security interests; dual-use goods; R&D; defence sector

Wout De Cock is a postdoctoral researcher at the Department of Economics, Management, and Leadership of the Belgian Royal Military Academy and the Vrije Universiteit Brussels. Gregory Kegels is a doctoral researcher at the department of Applied Economics of the Vrije Universiteit Brussels. He also works at the Department of Economics Management and Leadership at the Belgian Royal Military Academy as a military reservist. Caroline Buts is a professor at the Department of Applied Economics of the Vrije Universiteit Brussels. She heads the research group Brussels Centre for Competition Policy. She is managing editor of EStAL. Cind Du Bois is the head of the chair of economics and a professor at the Department of Economics, Management & Leadership at the Belgian Royal Military Academy.This article has been prepared within the framework of the BEPIDS project (Belgian Economic Potential in the Industry of Defence and Security), a project funded largely through the ‘Belgian Federal Public Planning Service Science Policy’ (BELSPO) and partially by the Belgian ‘Royal Higher Institute for Defence’ (RHID). All hyperlinks were correct as last checked on 29 June 2023.


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