Template-Type: ReDIF-Paper 1.0
Title: State Aid Policies in Response to the COVID-19 Shock: Observations and Guiding Priciples
Author-Name: Massimo Motta
Author-Email:
Author-Name: Martin Peitz
Author-Email: 


Classification-JEL: L52, L53, H25
Keywords: state aid, recapitalisation, COVID-19, European Single Market

Abstract: The drastic economic shock suffered around the world has led many countries to roll out support programmes to its economies. Firms in difficulties may have part of their labour costs covered by the state, may be allowed to postpone due tax payments, and may be beneficiaries of sector-specific or company-specific support programmes. In this article, the authors reflect on the general challenges when designing state aid policies and set out some guiding principles on state aid programmes by EU member states. They address the challenges that arise within the European Single Market when individual EU member states implement their own, non-harmonised programmes. In particular, such programmes run the risk to the distort competition in the Single Market. This risk is particularly pronounced for state support that goes beyond short-run liquidity provision and employment support. Oversight by the European Commission and EU-wide programmes for critical sectors are seen as essential to maintain the Single Market intact.

Note: 
Length: 8
Creation-Date: 2020-06
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp179
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2020_179