Economics is at the heart of modern state aid policy. The European Commission relies on a refined economic approach and financial analysis to assess the compatibility of state aid measures with the internal market. In particular, economic analysis plays a crucial role in the implementation of the balancing test which weighs the positive effects against the negative effects of a state aid. Economic analysis involves assessing whether the state aid alleviates a market failure or addresses an objective of common interest, whether the state aid is well-targeted, appropriate and provides the right incentives to the recipient firms, whether the distortion to competition is sufficiently limited and ultimately whether the balance between efficiency benefits and anticompetitive effects is positive.
The analysis of state aid requires a broad set of economic and financial skills. It also requires a thorough understanding of the applicable regulations, guidelines and procedures.
We provide substantial economic analysis on state aid compliance, state aid litigation and state aid ex-post evaluation. Moreover, we assist the aid grantor in preparing the notification documents and obtaining quick clearance from the competition authority.
