The European Commission allows State aid in specific circumstances; for example to promote Community investment in research and development, environmental protection and investment in training. However, in general terms, it considers State aid to be incompatible with the common market and to have a damaging effect on competition and trade across the Community area. Consequently, the Commission takes a serious view of aid provided without its approval and a particularly serious view of aid given in contravention of the State aid rules.
In these circumstances, there can be serious repercussions:
- the aid payment could be halted
- the recipient could be required to repay the aid, plus interest
- aggrieved competitors may also seek legal action for damages
- the Commission could commence infringement procedures against the Member State, possibly resulting in a fine
It is therefore extremely important to establish, at the earliest possible stage, whether your project or policy proposal constitutes State aid and, if so, how they be taken forward in compliance with the State aid rules - whether they require notification to the Commission, or do they fit with an existing approved State aid scheme or block exemption.
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