Theoretical and Applied Economics (Jun 2012)
The Economics of State Aid Control in the European Union during the Financial Crisis: the Challenge for a Post-Crisis Rhetoric
Abstract
The present paper explores the rationale behind the legal framework regulating the use of state aid by the member-countries of the European Union during the financial crisis. Starting with 2008, the massive interventions in the banking industry of the governments of the member-countries attempting to eliminate the effects of the crisis fundamentally challenged the core logic of the entire policy regarding the control of state aid in the European Union. We attempt to underline the extraordinary dimension of the impact of the financial crisis on state aid control and scrutinize whether the underlying principles of the state aid regime have been changed. We conclude that the special place that the financial industry in general, and the banking industry in particular, enjoys from the point of view of competition policy, is unfounded. European Union is, after the crisis, in the uncomfortable position of re-legitimizing state aid control.
