STATE AID - KEY POLICY EUROPEAN UNION

According to the European Court and the practice of the European Commission, the term "aid" as described in Article 87 (1) of the EC Treaty consists of the following four basic elements: granted that the state or resources the state, including those available to local authorities; selective application is limited only to certain economic areas, activities or production of certain goods/provision of certain services; provides an economic advantage; distort (or threaten to distort) competition and trade between Member States of the European Union. The concept of aid is wider than that of a non-reimbursable fund and refers to measures that reduce the costs of an undertaking and which would normally be borne from its budget. The jurisprudence of the European Court of Justice is all too useful to clarify the defining elements of state aid. In competition policy, the state aid is an integral part, state aids being selective measures of public financial support to undertakings, areas or activities to achieve objectives of general interest, such as environmental protection, development of small and medium enterprises, development of disadvantaged areas, rescue and restructuring of strategic economic agents etc. Even if the authorities support businesses support a public interest, it can distort the normal competitive environment.