EU Competition Law: An Unaffordable Luxury in Times of Crisis?

Abstract

The paper rejects arguments advanced in some quarters for a relaxation of EU competition policy to promote economic recovery. Economic theory and historical experience indicate that competition is likely to assist rather than impede recovery. While the Covid-19 induced recession necessitated increased State Aid, there is a serious risk that such aid will seriously distort competition within the internal market, given differences in the financial capacity of Member States to support businesses. The paper argues that policies designed to promote national champions and greater self-sufficiency are not justified and that action to secure reciprocal market access for EU exports is preferable to protectionist measures. An important lesson from the financial crisis is that actions based on immediate needs are a poor substitute for policy intervention based on sound economic analysis. 1: Recession response, 2: NIRA, Glass-Steagal, 3: Competition Policy, 4: Firm Failure, 5: Industrial Policy, 6: State Aid, 7 National Champions, 8: Trade Policy, 9: Research and Innovation, 10: EU Temporary Framework