ARTICLE · 27 MARCH 2023

Foreign Subsidies Under EU Control

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EU legislation is generally perceived to be successful in combatting restrictions on cross-border trade between Member States.

European UnionGovernment, Public Sector

Szymon Golebiowski

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EU legislation is generally perceived to be successful in combatting restrictions on cross-border trade between Member States. It includes putting in place control mechanisms covering the public subsidization of business activities with a view to protecting competition in the internal market. In fact, EU State aid law is perceived as an effective tool and despite its flaws, is seen by many as a great achievement.

Nevertheless, the EU system has been criticised for not being able to sufficiently target vital security interests and financial advantages granted to companies by non-EU governments. To some extent, financial distortions are curbed by trade law, but this only applies in the case of subsidised overseas imports entering the EU market., ahref="#section1".¹ Mergers, acquisitions and public contracts granted to beneficiaries of non-EU funds, however, remain unscrutinised.

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