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