Digging itself out of the hole? A critical assessment of the European Commission’s attempt to revitalise State aid enforcement after the crisis

This paper aims to assess the likelihood that State aid enforcement can be revitalised in the post-crisis period as a result of the 2012-2014 State aid modernisation process (SAM). The paper takes the view that State aid enforcement was left in a difficult impasse as a result of the extraordinary measures the European Commission implemented during and immediately after the 2008 economic breakdown. These measures left the Commission in a difficult position due to the unavoidable concessions and lowering of standards that dealing with the soaring volume of State aid required. To overcome that situation, the Commission subsequently promoted procedural reforms as part of SAM, and is now praising a State aid control 2.0 that it perceives to have solved the problem. This paper builds on the premise of the Commission’s weakness as a result of the crisis-related changes in State aid enforcement to critically assess whether a scenario of stronger enforcement can be foreseen under the modernised State aid control 2.0 and, particularly, in the post-SAM procedural framework. It pays particular attention to the need for the Commission to (re)engage in a more substantive assessment of aid measures and to promote judicial (or private) enforcement of State aid rules in an effective manner. It concludes that, in the absence of a fundamental rethink of the enforcement system, a revitalisation of State aid post-SAM is highly unlikely.