State Aid control
Competition policy and the spillover of the financial crisis to the real economy: taking action
Competition policy has a central but limited role to play in overcoming the spillover effects of the financial crisis into the real economy.
Read more about the Commission's recent actions to address the crisis in the real economy.
Member States can contact the Economic Crisis Team for all State aid related measures for the real economy prepared under the Commission´s European Economic Recovery Plan, or national recovery plans.
The objective of State aid control is, as laid down in the founding Treaties of the European Communities, to ensure that government interventions
do not distort competition and trade inside the EU. In this respect, State aid is defined as an advantage in any form whatsoever
conferred on a selective basis to undertakings by national public authorities. Therefore, subsidies granted to individuals or general
measures open to all enterprises are not covered by Article
107 of the Treaty on the Functioning of the European Union (TFEU) and do not constitute State aid.
The EC Treaty pronounces the general prohibition of State aid. The founders, however, saw of course that in some circumstances, government
interventions are necessary for a well-functioning and equitable economy. Therefore, the Treaty leaves room for a number of policy
objectives for which State aid can be considered compatible. By complementing the fundamental rules through a series
of legislative acts that provide for a number of exemptions, the European Commission has established a worldwide unique system
of rules under which State aid is monitored and assessed in the European Union. This legal framework is regularly reviewed
to improve its efficiency and to respond to the call of the European Councils for less but better targeted State aid in order to boost
the European economy.
While new legislation is adopted in close cooperation with the Member States, the application of exemptions to the general prohibition of State
aid rests exclusively with the European Commission, which possesses strong investigative and decision-making powers. At the heart
of these powers lies the notification procedure which -except in certain instances- the Member States have to follow. It is
only after the approval by the Commission that an aid measure can be implemented. Moreover, the Commission has the power to
recover incompatible State aid.
Through these means, three Directorate-Generals are carrying out effective
State aid control: while sector-specific services safeguard fair competition in Fisheries
(the production, processing and marketing of fisheries and aquaculture products), and Agriculture
(the production, processing and marketing of agricultural products), the
Diretorate-General for Competition deals with all other sectors.
The Commission aims at ensuring that all European companies operate on a level-playing field, where competitive companies succeed. It ascertains that
government interventions do not interfere with the smooth functioning of the internal market or harm the competitiveness of EU companies.
Companies and consumers in the European Union are also important players who may trigger investigations by lodging complaints
with the Commission. Furthermore, the Commission invites interested parties to submit comments through the Official
Journal of the European Union when it has doubts about the compatibility of a proposed aid measure and opens a formal
For more information, please read the section on State aid in the brochure "EU Competition policy and the consumer", the Vademecum on State Aid or the Handbook on Enforcement of EU State aid law by national courts.