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2 Wroclaw Rev. L. Admin. & Econ. 1 (2012)

handle is hein.journals/wrorwolwa2 and id is 1 raw text is: DE GRUYTER WroclawReview ofLaw; Administratui &E namws SELECTIVITY CRITERION IN STATE AID CONTROL JAKUB KOCIUBINSKt* INTRODUCTION The creation and development of the Internal Market has spurred competition and allows for businesses to expand in size to become European players, increasing further economic growth.1 Modern European economies rely heavily on markets and private undertakings to decide what goods to sell, what markets to expand into, what R&D to undertake and so on. The underlying principle is that free competition based on equal and non- discriminatory treatment of every undertaking will ensure optimal economic efficiency.2 However, an uneven playing field may result from aid that Member States grant to companies operating in their territories. These measures may aim to support national champions, attract investments to their territory, etc.3 Even when the intentions of public authorities are most laudable, such policies may obstruct the process of economic growth and could lead to market fragmentation, which, in effect, would harm the overall competitiveness of the European Union's economy.4 State Aid control is thus a vital tool which complements the Internal Market's rules.5 Exercising effective State Aid control is by no means an easy task, considering the size of the Internal Market and the differences in social and DOI: 10.2478/wrlae-2013-0016 * PhD, LLM; Assistant Professor; University of Wroclaw, Department of International and European Law; kociubinski.jakub@prawo.uni.wroc.pl 1 Jaques Derenne and Massimo Merola (eds), Economic Analysis of State Aid Rules - Contributions and Limits (Lexxion 2007). 2 This principle is based on the belief that competitive markets are an important protector of liberty. Daniel Yergin, Joseph Stanislaw, The Commanding Heights: The Battlefor the World Economy (Simon & Schuster 2002) 16. 3 See Neelie Kroes, 'Industrial Policy and Competition Law & Policy', Speech at the Fordham University School of Law, New York, 14.09.2006 (IP Press Relase SPEECH/06/499). The former Competition Commissioner pointed out that previous experience of supporting national champions shows that results are counterproductive in terms of success in the global economy. Nevertheless, these kinds of policies are widespread among Member States. 4 These strategies are often described as 'beggar-thy-neighbour', which means a State's remedies for its own economic problems tend to have a negative impact on the economic situation of other States. See Kenneth A Reinert, Ramkishen S Rajan and Amy Jocelyn Glass (eds), The Princeton Encyclopaedia ofthe World Economy. Volume I: A -H (Princeton 2009) 126. 'Hans W Friederiszick, Lars-Hendrik Roller and Vincent Verouden, 'EC State Aid Control: an Economic Perspective' in Michael Sinchez Rydelski (ed), The EC State Aid Regime - Distortive Effects of State Aid on Competition and Trade (Cameron May 2007) 145. 1

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