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ARTICLE · 15 JULY 2020

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Are Foreign Subsidies Distorting The EU's Single Market?

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The openness of the European Union (the 'EU') to foreign investment has been the subject of much recent debate. While this openness brought with it a myriad of opportunities,..

European UnionGovernment, Public Sector
Dr. Michael Psaila
Dr. Michael Psaila
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The openness of the European Union (the 'EU') to foreign investment has been the subject of much recent debate. While this openness brought with it a myriad of opportunities, it also brought increased risks and in light of this, the European Commission (the 'Commission') published for consultation a White Paper on Foreign Subsidies in the Internal Market (the 'White Paper') on the 17 June 2020.

Various EU instruments, including competition and public procurement rules, ensure fair conditions in the Single Market, with subsidies by Member States being subjected to State aid rules to avoid the distortion of competition. That being said, State aid rules do not extend to subsidies granted by non-EU governments to undertakings in the EU, no matter their increasing negative impact on the Single Market.

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