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

Published date01 May 2019
Date01 May 2019
State aid control in the modernisation era: Moving
towards a differentiated administrative
Carlo Maria Colombo*
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.
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 policyspecific objectives.
Yet, unlike the general
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This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and
reproduction in any medium, provided the original work is properly cited.
© 2019 The Authors European Law Journal Published by John Wiley & Sons Ltd
*Faculty of Law, Maastricht University, Bouillonstraat 13, 6211 LH Maastricht, the Netherlands ( 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 EUat the
24th International Conference of Europeanists in Glasgow (1214 July 2017) and the participants at the conference Rule of Law Challenges in the EU: Impli-
cations for EU Economic Lawin Budapest (10 January 2019) for their valuable feedback. The usual disclaimers apply.
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 aidmeasures 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;
centralisation of administrative functions envisioned in most EUwide responses to the crisis, state aid control
has moved in an opposite direction.
The Commission's State Aid Modernisation (SAM) package has further
decentralised responsibilities connected to state aid control to national administrations.
The Commission's aim
is to focus its own enforcement on cases with the largest impact on the internal market while speeding up
lessproblematic provisions, in line with the Doing Less More Efficientlyscenario of the White Paper on the
Future of Europe (EU)
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,
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,
and the previously centralised system already suffered from the Commission's weak monitoring
and awarenessraising on domestic compliance.
To tackle these structural problems, the Commission has supplemented the initial model of regulatory inte-
gration and powerchecking
with administrative integration and management strategies.
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
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
In general, scholarship has identified centralisation of control powers to the EU administration as a clear trend in EU postcrisis reforms. See M. Scholten,
Mind the Trend! Enforcement of EU law has been moving to Brussels”‘, (2017) 9 Journal of European Public Policy 13481366; 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.
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
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 133. For a reflection on it, see B. De Witte, The Future of Variable Geometry in a postBrexit European Union, (2017) 2 Maastricht Journal of Euro-
pean and Comparative Law 153.
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 Boxof EU Law in Action, (2007) 30 West European Politics 5067.
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.
See European Court of Auditors, Do the Commission's procedures ensure effective management of state aid control?(Publications Office of the European
Union, 2011).
J. Weiler, M. Cappelletti and M. Seccombe, Integration through Law, Europe and the American Federal Experience (De Gruyter, 1985).
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 2136;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), 933). Management strategies are analysed in compliance studies to understand how the strategies based on the problemsolving
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).
See the speech of the Commissioner at the HighLevel Forum on State Aid Modernisation 2016, The EU state aid rules: Working together for fair com-
petition(Brussels, 3 June 2016), available at

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