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16 August 2007 / Rosie Choueka
Issue: 7286 / Categories: Features , EU , Competition
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A small revolution

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Why is the European Commission undertaking the wholesale reform of the state aid regime? Rosie Choueka investigates

The Competition Directorate General of the European Commission in Brussels has certainly been busy over the past few years. In addition to its bread-and-butter work of examining mergers, investigating cartels and controlling state subsidies, it has been modernising its policies across all areas of its practice. This has ranged from the de-centralisation of competition law enforcement—placing more responsibility on the shoulders of national competition authorities and more emphasis on self-assessment—through to updating the Merger Regulation 139/2004/EC and addressing the over-formalistic law on abuses of dominance.

Since June 2005, the Commission has also been working to improve the state aid regime. This article examines the reasons for the overhaul of state aid law and policy, the objectives behind it and the progress that has been made so far.

THE NEED FOR REFORM

Given that the state aid regime is mature and well developed, it may seem strange that the Commission has chosen to undertake a wholesale reform

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