Proposals for a Future-Oriented EU State Aid Framework

European state aid control is currently not optimally able to distinguish justified from unjustified aid: in part, member states are prohibited from taking measures by the European Commission and the Union Courts, although they may be considered harmless to the internal market and competition. Such excessive application of the state aid rules is itself harmful to the internal market and competition and thus thwarts the goals that state aid law actually serves. Although the European Commission has repeatedly evaluated and legally reformed state aid law over the past 20 years, it has consistently failed to take a far-reaching approach. This study identifies shortcomings in European state aid law and formulates recommendations for action in the following three areas. Firstly, the European Commission and Union courts sometimes interpret state aid rules imprecisely, inconsistently and in a way that is difficult to predict; secondly, these rules are partly outdated in essential parts; and thirdly, they are only directed against EU member states and do not offer any means of dealing with the challenges of a globalised economy, such as competition-distorting subsidies by third countries. A cautious evolutionary further development of the proven EU state aid framework, while maintaining its competition-oriented basic orientation, opens up sufficient room for manoeuvre for the member states with regard to the granting of state aid for sensible reform measures and more economic policy decision-making freedom, especially for a successful digital and ecological transformation of the European Union.