The Conflicting Roles of State Aid Control: Support of Financial Institutions versus Safeguarding the Internal Market
| DOI | 10.1177/1023263X1001700301 |
| Published date | 01 September 2010 |
| Date | 01 September 2010 |
| Subject Matter | Editorial |
17 MJ 3 (2010) 223
eDItoR IAL
the ConFLICtIng RoLes oF
stAte AID ContRoL:
sUPPoRt oF FInAnCIAL InstItUtIons
veRsUs sAFegUARDIng the
InteRnAL MARket *
P N and I E R**
§1. INTRODUCTION
e response of EU instit utions to the nancial crisis c an at best be described as va ried.
e European Commission and the European Central Bank reacted as soon as the
crisis broke out in September 200 8 to preserve the integrity of the internal market and
increase liquidity in the market s, respect ively. e Counc il responded only a month
later wit h recommendations that Member States increase public spend ing. Finally, the
Parliament and the Council together were able to adopt a new regulator y framework
only in September 2010.1
e purpose of this editorial is to examine the role of s tate aid rules in the nancial
crisis a nd ask whether they protected t he internal ma rket or prevented Member States
from providing much needed support to nancial institutions. It should be recal led
that immediately a er the collapse of Lehman Brothers , Member States rushed to inject
capital in banks and to rai se deposit guarantees to assure the public and prevent runs on
banks.2
e European Commission had to intervene to ensure that national measures used to
prop up banking were not discriminatory. As the then Commissioner for competition put
* is article draw s extensively on a longer paper entitled ‘Financial Crisi s and State Aid’ that will appear
in the Anti-Trust Bul letin.
** Phedon Nicolaides is Professor of Economics at the Europe an Institute of Public Adminis tration
(EIPA), Maastricht, e Net herlands. Ioana Eleonor a Rusu is a research assi stant at the EIPA.
1 Proposal for a Reg ulation of the European Parliament and of the Council on Community macro
prudential ove rsight of the nancial sy stem and est ablishing a Eu ropean Systemic Risk Boa rd.
COM(2009) 499 nal.
2 UK – NN 41/2008; Irela nd – NN 48/2008; Denma rk – NN 51/2008; Sweden and Spa in – N 337/2009.
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