Public funding of economic activities is subject to Community regulation regarding State aids.
State aids are prohibited by the Treaty on the Functioning of the European Union because they distort level playing field competition, a pillar of the European single market's proper functioning.
However, they may be authorised by way of derogation for specific activities that the normal functioning of the market is unable to produce in sufficient quantities: R&D and innovation, training, risk capital, environmental protection and actions on climate change…
The European Commission has exclusive competence to monitor the proper application of this regulatory framework, which is characterised by a strong threshold effect.
As a matter of fact, when they are in limited amount, State aids are automatically regarded as compatible with EU rules, provided that there’s a legal basis for their allocation.
Nevertheless, any substantial State aid must be individually notified to the European Commission in a detailed assessment procedure. This should allow the EC to evaluate positive and negative economic effects of the aid it will put in balance to ultimately decide whether the aid is compatible or not.
Any substantial State aid granted without prior individual notification is automatically considered illegal and the Commission can demand its reimbursement by the beneficiary within the ten years of its granting.
It is within this regulatory framework that european economics draws on its unique expertise to provide its clients with complete solutions that guarantee compliance of their strategic projects’ funding with EU State aid rules.