Short review

The Law of State Aid in the European Union. Edited by Andrea Biondi, Piet Eeckhout and James Flynn. Oxford: Oxford University Press, 2004. Pp. 400. $135.00.

Reviewed by Phedon Nicolaides, Professor, European Institute of Public Administration, Maastricht, The Netherlands and College of Europe, Bruges, Belgium.

 

The competition law of the European Union, unlike those of its member states, includes rules on state aid. Indeed, the control of state aid plays a significant role in safeguarding the process of liberalisation and integration within the EU. Its significance is also underlined by the fact that the Treaty establishing the European Community confers to the European Commission unique powers to prohibit or approve any new state aid measure adopted by member states.

 

The system of control of state aid applies only those public measures that satisfy all of the criteria which are defined in Article 87 of the EC Treaty. Although this Article has not changed despite successive Treaty revisions, its interpretation has continuously evolved in the case law. This evolving interpretation reflects the inventiveness of member states in finding new ways of assisting their enterprises. This evolution in national policies of assistance to enterprises further attests to the need for an effective means of controlling state aid.

 

The book on “The Law of State Aid in the European Union” correctly starts with an extensive review of the concept of state aid and then each of the eighteen chapters that follow examines a different aspect of state aid such as the links with services of general economic interest, public enterprises, public broadcasting, public guarantees, air transport, taxation and environmental protection. There are also the inevitable chapters on procedural issues.

 

The strength of the book is that each of the chapters is written by an authority on state aid. The analysis is competent and the argumentation persuasive. They are very well researched and the editors have done an excellent job to polish the text.

 

But the book also has two defects. First, important aspects of state aid are left out or covered in passing. For example, there is no in depth analysis of the private investor principle or of the issues that arise when aid is granted for rescue and restructuring of ailing companies, R&D, SMEs or regional development. There is a large body of case law on how public authorities may act as private investors and under which conditions aid for rescue and restructuring may be balanced against the distortion of competition within the common market.

 

Second, the book contains a number of chapters which treat peripheral issues such as state aid in candidate countries, in the WTO or in the EEA. These are issues which are very important in themselves but do not seem to fit well in a book that examines the law within the EU.

 

Despite these reservations, the book provides a valuable source of information and analysis.