Abstract
How do the European Structural and Investment Funds (ESI Funds) interact with the EU state aids rules?The paper sets out by providing the background on the objectives and the inter-governmental and administrative structures that underpin the ‘ESI Funds’. It, then, proceeds to present the inconsistencies that arise between EU Cohesion policy, the driving force behind the ‘ESI Funds’, and competition policy because of the conceptual differences and the, often, distinct objectives the two policy areas pursue. Upon providing the theoretical background on the relationship between competition policy and cohesion policy, the paper continues by presenting the new legal framework of the ESI Funds and the relevant to state aids provisions, with a view to assessing the new Common Provisions Regulation with regard to the State Aid Modernisation initiative. It then reviews in which cases ESI Funds may qualify as state aids and the repercussions this classification might bring about. Finally, it provides an overview of the WTO rulings with regard to Union funds, in particular those subsidizing the Common Agricultural Policy (CAP).
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