From Market Integration to Fiscal Discipline : Analysing the Goals of EU State Aid Policy from an Economic Perspective

This chapter discusses the rationale for State aid control as part of competition law. Like in other areas of EU competition law, such as abuse of dominance and merger control, there is a clear shift towards a ‘more economic approach' and a stronger focus on efficiency. However, this stronger focus on efficiency with regard to a politically sensitive area such as State aid is not self-evident, and also raises the question why other jurisdictions do not have a similar control on market intervention by States (US) or provinces (China). It also raises the question whether controlling the efficiency of government spending should be a task of the EU rather than Member States. The aim of this paper is therefore to critically assess the changing goals of EU State aid policy, from market integration and equity to efficiency and fiscal discipline