Abstract
The main subject of the paper is the issue of granting state aid discussed from the point of view of the most important changes in the European Union competition policy as a result of the global financial crisis. The author makes a review of state aid related to the financial crisis in the European Community. The article includes a detailed description of reasons for the economic interventions which has been designed and taken by the Member States in the form of various schemes, plans and objectives. The directions of the main changes in the structure of state aid granted to the financial institutions in absolute and relative terms are shown. It was essential to notice the significant European Commission’s role ensuring that large support schemes for the financial sector will be implemented in compliance with the state aid rules and do not create undue distortions of competition. The paper contains numerous legal materials, including primary and secondary legislation, as well as European case law. The author also relied on the literature and articles on the notified state aid connected with the financial services sector and banking crisis.
Highlights
Financial services sector is one of the most fundamental to economic growth and development in all advanced economies
This paper aims at examining the state aid provisions discussed in the light of recent changes in the European competition policy as a result of the global financial crisis
After the break-down of the inter-bank lending in September 2008, Member States injected substantial amounts of state aid into the financial sector in order to prevent the collapse of banks in the European Union and with the aim of countering the systemic risk which many banks posed to the functioning of the financial markets
Summary
Financial services sector is one of the most fundamental to economic growth and development in all advanced economies. Government intervention in financial services sector and state protection of national banks are one of the most problematical issues discussed in economic policy. While some view these measures as highly protectionist against the underlying principles of the European Union, others motivated with the implications of recent global financial crisis argue that these interventionist policies might be part of the solution. What is illustrated are the implications of the recent banking crisis by providing an analysis of the European Commission’s response in the context of its exclusive competence in the state aid control policy to evaluate the compatibility of large support schemes for the financial sector granted by Member States with the rules of the European competition law. In the second part of the paper the magnitude, structure and directions of state aid measures used in the EU-276 and adopted by the European Commission during the time of financial crisis were presented
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