EU state aid rules

Subject: EU state aid rules

One of the first achievements of the EEC in competition law was a common discipline on state aid, which was already enforced in the early 1960s by Commissioner Hans von der Groeben and his Head of Cabinet, Ernst Albrecht. However, since 2008, the Commission, as the self-proclaimed guardian of the Treaties, has been barely made any effort to enforce it, so that the major Member States are engaging in a subsidy race for US ammunition and microchip producers and Chinese battery manufacturers, which is ruinous for their finances.

When does the Commission intend to again fulfil its obligation to fully implement EU State aid rules?

Submitted: 16.11.2023

Answer given by Executive Vice-President Vestager on behalf of the European Commission (15 January 2024)

State aid rules have been introduced in the Treaty of Rome and are essential to prevent competition distortions and protect the internal market. The Commission continues to enforce them vigorously and is decisively fighting against distortive state aid of whatever form.

At the same time, the Treaty rules on state aid cater for the possibility to provide extraordinary support in times of crisis or serious disturbances in the economy of Member States.

In this regard, Article 107(3)(b) of the Treaty on the Functioning of the European Union provides the possibility to grant aid to remedy a serious disturbance in the economy of a Member State.

The Commission relied on that provision to put in place temporary state aid frameworks to allow Member States to react to serious disturbances in their economies first due to the financial crisis in 2008, and more recently as a result of the Covid-19 pandemic and the crisis triggered by Russia’s military aggression against Ukraine.

Those frameworks set common rules at EU level and provide the necessary safeguards to avoid fragmentation of the internal market.

Besides the crisis response, the Commission is regularly adapting state aid compatibility rules to meet new challenges and enable policies to address them, whilst minimising distortions of competition.

For instance, the ambitious climate goals underpinning the Green Deal require accelerated investments in renewable energy and decarbonisation, which the Temporary Crisis and Transition Framework (1) enables Member States to support within clearly defined limits.

Equally, it allows support — subject to well-defined limits and safeguards — for a limited list of key climate technologies to preserve the resilience and strategic autonomy of the European economy in this essential area.

1 ∙ ⸱ Temporary Crisis and Transition Framework for State Aid measures to support the economy following the aggression against Ukraine by Russia, OJ C 101,

17.3.2023, p. 3.