European Union rules on State aid were put in place to ensure that state-owned resources are not deployed to distort competition or create unfair advantage in the European single market.
State aid is an advantage given by a government that may provide a company with an unfair competitive edge over its commercial rivals. Such State aid can be delivered in a variety of ways, such as through the allocation of grant subsidies, the provision of interest and tax relief, or the purchasing of goods and services on preferential terms.
EU rules generally prohibit state aid unless it can be justified under certain circumstances related to general economic development. The Commission is charged with ensuring that State aid rules are applied and observed equally across all the Member States. The EU's operational programmes for regional development are subject to these State aid rules.