State aid encompasses a wide range of state support including direct subsidies, tax concessions, state guarantees and investments from public funds in circumstances where a private investor would not have given support. In order to ensure EU-wide competition on a level playing-field, Member States are restricted in the way they can subsidise businesses or sectors.
The European Commission has been undertaking an oingoing reform programme of the state aid rules, under a broad strategy to achieve "less and better state aid". A main theme is that, whereas public subsidies which are likely to make European markets more dynamic in the long term - e.g. aid to research and innovation, SMEs and in the form of risk capital - should be allowed, Member State "bail-outs" of large, established businesses are not.
Normally, state aid must be notified to the European Commission before it is granted. If aid is granted without being notified and cleared:
We can assist you by advising on whether arrangements could be viewed as state aid and what risks (or opportunities) there may be.
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