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State aid - the Commission's role

The European Commission defines a system of rules that provide for a number of exemptions, in close cooperation with the Member States. This legal framework is regularly reviewed to improve its efficiency and ensure it meets the needs of a fast changing economy.

The application of exemptions to the general prohibition of state aid rests exclusively with the European Commission. It is only after approval by the Commission that an aid measure can be implemented. The Member States have to follow - except in clearly stated instances - the notification procedure.

The European Commission can also investigate any project if there is some suspicion of state aids elements. On the basis of information provided by the Member States or collected throughout the investigation, four Directorates General monitor state aid:

  • Agriculture - for state support to the sector of production, processing and marketing of agricultural products.

  • Energy and transport - for state support to companies in the road, rail, inland waterway, sea and air transport sectors.

  • Fisheries and maritime affairs - for state support in the sector of production, processing and marketing of fisheries and fish farming products.

  • Competition - all other sectors.

When the investigation is done, the measures are then declared:
  • Not to constitute state aid,
  • To be compatible with the internal market,
  • To be incompatible with the internal market and therefore not to be put in place.

In the event of aid declared incompatible but already granted, the European Commission can demand the recovery of the illegal aid from its beneficiaries.