The question of State aid for rescuing and restructuring undertakings in difficulty in the context of the general government sector debt of EU Member States

Piotr Podsiadlo ()
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Piotr Podsiadlo: Cracow University of Economics

No 89/2015, Working Papers from Institute of Economic Research

Abstract: The subject of the article is an analysis of the rules of state aid admissibility on the basis of the implementing regulations, adopted by the European Commission in 2004 and 2014 on rescue and restructuring aid. This should lead to verify the thesis that due to the taken up at EU level - in response to the effects of the financial and economic crisis – economic recovery plan, the support of the public authorities directed at rescuing and restructuring undertakings in difficulty has become the most broadly used form of State aid due to the value among all the forms of aid granted by Member States of the European Union. The adoption of such a thesis raises the question of the influence of State aid on the size of the general government sector debt in the EU Member States, which have provided State aid for undertakings in difficulty. This analysis was carried out based on the linear regression model. The response variable (dependent variable Y) is the size of the general government sector debt, and explanatory variable (independent variable X) is the expenditure on State aid. The research shows that between expenditures of the EU Member States on aid for rescuing and restructuring undertakings in difficulty and the condition of the public finances of these countries there is no substantial statistical relationship. Taking this into consideration the most important question arises. Does the State aid "to prevent the bankruptcy of undertakings” follow the condition of art. 107 par. 2 point c of Treaty on the functioning of the European Union?

Keywords: the European Union; legal regulation; rescue and restructuring aid; the general government sector debt; financial and economic crisis (search for similar items in EconPapers)
JEL-codes: E62 K20 K33 (search for similar items in EconPapers)
Date: 2015-04, Revised 2015-04
New Economics Papers: this item is included in nep-mac
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