State aid control in the modernisation era: Moving towards a differentiated administrative integration?

• Published date: 01 May 2019
• DOI: http://doi.org/10.1111/eulj.12324
• Date: 01 May 2019
• Author: Carlo Maria Colombo

ORIGINAL ARTICLE

State aid control in the modernisation era: Moving

towards a differentiated administrative

integration?

Carlo Maria Colombo*

Abstract

Despite contentions that state aid control is an instance of direct execution, the State Aid Modern-

isation (SAM) package has largely dispersed responsibility for giving effect to the common legal

framework across national administrations. In this setup, the effectiveness of state aid law is

confronted with asymmetric capacities, diffuse application of complex rules and difficulty in keeping

dispersed powers under control. This article combines selected evidence on the operation of state

aid control with a multidisciplinary analysis of the functioning of integration mechanisms in the

European administrative space. The aim is to examine the potential effects of SAM. It contends that,

while the reform has strengthened the Commission's dominance, the instruments of administrative

integration might fail to secure adequate capacities and implementation performances at national

level, due to constitutional constraints and opposing forces. This effect, it is argued, could be divi-

sive, and risks undermining the integrity of the internal market.

1|INTRODUCTION

In the aftermath of the financial and economic crisis, state aid control has been largely deployed to spur eco-

nomic growth and steer national expenditures towards policy‐specific objectives.

1

Yet, unlike the general

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© 2019 The Authors European Law Journal Published by John Wiley & Sons Ltd

*Faculty of Law, Maastricht University, Bouillonstraat 1‐3, 6211 LH Maastricht, the Netherlands (carlo.colombo@maastrichtuniversity.nl). I would like to

thank especially Jacques Ziller, Mariolina Eliantonio, Maddalena Neglia, Maaike Damen, Carlo Panara, Nicola Pesaresi and the anonymous reviewers for their

useful comments on an earlier version of the article. I also owe gratitude to the participants in the panel ‘Lawmaking and Administration in the EU’at the

24th International Conference of Europeanists in Glasgow (12‐14 July 2017) and the participants at the conference ‘Rule of Law Challenges in the EU: Impli-

cations for EU Economic Law’in Budapest (10 January 2019) for their valuable feedback. The usual disclaimers apply.

1

To address the financial crisis in 2008, the Commission deployed state aid enforcement for two different purposes. First, it used state aid control partic-

ularly to safeguard the level playing field in the EU banking sector, in view ofmassive aid measures taken independently by different national governments

to bail out their domestic credit institutions. Second, in 2012 it launched the State aid Modernisation (SAM) strategy in an effort to speed up provisions of

‘good aid’measures and promote economic growth. The latter initiative forms the core of the present study. On state aid measures in relation to the banking

crisis, see F.‐C. Laprévote, J. Gray and F. De Cecco (eds), Research Handbook on State Aid in the Banking Sector (Edward Elgar Publishing, 2017); J. Piernas

López, The Concept of State Aid Under EU Law: From Internal Market to Competition and Beyond (Oxford University Press, 2015).

Received: 19 March 2018 Revised: 9 April 2019 Accepted: 17 April 2019

DOI: 10.1111/eulj.12324

292 Eur Law J. 2019;25:292–316.wileyonlinelibrary.com/journal/eulj

centralisation of administrative functions envisioned in most EU‐wide responses to the crisis, state aid control

has moved in an opposite direction.

2

The Commission's State Aid Modernisation (SAM) package has further

decentralised responsibilities connected to state aid control to national administrations.

3

The Commission's aim

is to focus its own enforcement on cases with the largest impact on the internal market while speeding up

less‐problematic provisions, in line with the “Doing Less More Efficiently”scenario of the White Paper on the

Future of Europe (EU)

4

–to focus Union's limited resources on delivering more and faster on big issues, while

doing less on small ones.

An inevitable yet less discussed dilemma of this transformed setup is managing the structural problems that could

result. Since an increasing number of administrative activities are being distributed across national authorities, state

aid control risks becoming vulnerable to typical challenges of decentralised implementation of EU law,

5

particularly

asymmetric national implementation capacities, diffuse application of complex rules and difficulty in keeping dis-

persed administrative powers under control. These challenges are particularly urgent if one considers that, being

made of rules of negative integration and impinging upon sovereign prerogative, state aid control may entail high

political costs,

6

and the previously centralised system already suffered from the Commission's weak monitoring

and awareness‐raising on domestic compliance.

7

To tackle these structural problems, the Commission has supplemented the initial model of regulatory inte-

gration and power‐checking

8

with administrative integration and management strategies.

9

These range from

administrative rulemaking and networking to assist implementation activities and create consistent rule

application, to strengthened bilateral partnerships and conditionality arrangements to build up Member State

capacities.

10

This article reflects on the potential effects of the Commission's SAM design. It does so by addressing the

research question: ‘to what extent are the administrative integration instruments created by SAM capable of

2

In general, scholarship has identified centralisation of control powers to the EU administration as a clear trend in EU post‐crisis reforms. See M. Scholten,

‘Mind the Trend! Enforcement of EU law has been moving to “Brussels”‘, (2017) 9 Journal of European Public Policy 1348–1366; H. Hofmann, ‘European

administration: Nature and developments of a legal and political space’, in C. Harlow, P.Leino and G. della Cananea (eds), Research Handbook on EU Admin-

istrative Law (Edward Elgar Publishing, 2017), 33.

3

Commission of the European Union, ‘Communication on State Aid Modernisation’, COM (2012) 0209 final. For an analysis, see C. Micheau, ‘Evolution of

State Aid Rules: Conceptions, Challenges, and Outcomes’,in H. Hofmann and C. Micheau (eds) State Aid Law of the European Union (Oxford University Press,

2016); C. Quigley Q.C., ‘The European Commission's Programme for State Aid Modernization’, (2013) 1 Maastricht Journal of European and Comparative Law

35–55.

4

Commission of the European Union (2017), ‘White Paper on the Future of Europe: Reflections and Scenarios for the EU27 by 2025’, COM (2017) 2025

final 1–33. For a reflection on it, see B. De Witte, ‘The Future of Variable Geometry in a post‐Brexit European Union’, (2017) 2 Maastricht Journal of Euro-

pean and Comparative Law 153.

5

E. Chiti, ‘Is EU Administrative Law Failing in some of its Crucial Tasks?’(2017) 5 European Law Journal 578 ff.; E. Versluis, ‘Even Rules, Uneven Practices:

Opening the “Black Box”of EU Law in Action’, (2007) 30 West European Politics 50–67.

6

M. Blauberger, ‘Compliance with Rules of Negative Integration: European State Aid Control in the New Member States’, (2009) 7 Journal of European Public

Policy 1039.

7

See European Court of Auditors, ‘Do the Commission's procedures ensure effective management of state aid control?’(Publications Office of the European

Union, 2011).

8

J. Weiler, M. Cappelletti and M. Seccombe, Integration through Law, Europe and the American Federal Experience (De Gruyter, 1985).

9

Administrative integration and management strategies are used in this study to emphasise the same issue, namely how national and EU administrations

work together to give effect to EU law. Yet, each notion focuses on different aspects of this issue. Administrative integration emphasises especially the

organisations and procedures through which EU and national administrations cooperate to implement EU provisions (on this see, among others, H. Hofmann

and A. Türk, ‘The Development of Integrated Administration in the EU and its Consequences’,(2007) 2 European Law Journal 253; S. Cassese, ‘European

Administrative Proceedings’,(2004) 68 Law and Contemporary Problems 21–36;E. Chiti, ‘The AdministrativeImplementation of European Union law: A Tax-

onomy and its Implications’, in H. Hofmann and A. Türk(eds) Legal Challenges in EU Administrative Law: Towards an Integrated Administration (Edward Elgar

Publishing, 2009), 9–33). Management strategies are analysed in compliance studies to understand how the strategies based on the problem‐solving

approach (as opposed to enforcement) may generate compliance with supranational norms (on this see J. Tallberg, ‘Paths to Compliance: Enforcement, Man-

agement, and the European Union’, (2002) 3 International Organization 609 ff; T. Börzel and E. Heidbreder, ‘Enforcement and Compliance’,in C. Harlow, P.

Leino and G. della Cananea (eds), Research Handbook on EU Administrative Law (Edward Elgar Publishing, 2017), 241).

10

See the speech of the Commissioner at the High‐Level Forum on State Aid Modernisation 2016, ‘The EU state aid rules: Working together for fair com-

petition’(Brussels, 3 June 2016), available at https://ec.europa.eu/commission/commissioners/2014‐2019/vestager/announcements/eu‐state‐aid‐rules‐

working‐together‐fair‐competition_en.

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