EU State aid

EU State aid

State aid is essentially a publicly-funded gratuity to an entity for the purposes of activity for which there is a potential or actual market, and the aid is capable of affecting inter-State trade (see further, What is State aid).

The EU State aid rules (Articles 107 to 109 TFEU) give the European Commission (Commission) wide powers to investigate and order the recovery of illegally granted economic assistance which distorts the market in favour of the recipients of such assistance.

Economic assistance in any form whatsoever, such as an exemption from or reduction in the normal level of tax, loan or guarantee by the State, which is specific or selective in that it benefits certain undertakings or the production of certain goods, has routinely been considered to be State aid by the Commission and the EU Courts.

If a measure amounts to State aid and it is not notified to, or approved by, the Commission before it is put into effect, it will be unlawful. Some exemptions and exclusions apply and these are subject to detailed guidance from the Commission.

When does a measure amount to State aid?

State

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