State Aid Cases Essay Example | Topics and Well Written Essays - 3000 words

State Aid Cases - Essay Example State aid is composed of four components which are vital for it to be considered a state aid. A state aid must be granted by the member state or through its state resources with regard to stated rules. It can be delegated to the department of state like the municipalities or even the regions of the state. The undertakings of state aid are made public since it’s considered imputable to the state due to the state resources involved. The undertaking of state aid is done in favor of certain production of goods and services due to its selective advantage. Thus, the recipient of state aid is to solve an economic activity thus enhancing the provision of goods and services despite its legal framework. The state aid rules apply to both private and public undertakings weather its run for profit or not. Mandate of the commission on state aid The state aid procedure is developed to ensure smooth and orderly operations of thus avoiding several state aid cases which are likely to come up (E U, 2012). According to EU working paper, the state aid measures and schemes must be notified and approved by the commission before its commencement. The commission the looks at the guidelines and considers its effects before approval. The commission is thus mandated to oversee the adherence of the state aid undertakings with the rules so as to minimize conflicts as possible (Salmon, 2012). Any state aid done without the approval of the commission is considered unlawful and may be recovered without notice. The commission always approves the state aid measures within a period of two months from the period of notification (Salmon, 2012). The commission is mandated to decide whether a measure is aided or not or whether it is added but compatible with market forces and also to investigate the effects of the market forces. The commission is mandated to begin an investigation procedure and carry out an assessment as to determine possible grounds of compatibility. The commission less restri cted with when it comes to investigations and thus able to carry out investigations any time it deems appropriate. The final commission decision closes its formal investigation and it then makes recommendations regarding its findings. The commission recommends whether a measure is an aid and if its aid, the commission determines if it’s compatible with the market forces (Salmon, 2012). Competition Policy in EU. The experience of the global financial crisis of 2008 and is reinforcing a need for dialogue between the policy makers and the relevant stakeholders (ERT, 2012). Its recommendations are to provide better conditions for growth and investments thus promoting entrepreneurship and job creation. It calls for the need to address the effects of globalization, technological changes as well as emerging economic powers that pose challenge societies face. The EU competition policy is crucial to the internal market since it determines the pattern of investment and the levels of pr ofits to be made from businesses (ERT, 2012). The policy aims at preventing jeopardy in the market especially in times of economic crisis and thus ensuring stability in the market. The adoption of EU competition policy ensures a fair competition in the global scale and thus ultimately benefiting both the producers’