State aid cases.docx - 1 State Aid Cases Name Tutor Course...

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1 State Aid Cases Name Tutor Course Date
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2 Introduction Due to the current economic and financial crisis, state owned enterprises are finding it difficult to operate thus accumulating a lot of debt and sometimes making losses. Due to this uncertain economic viability, some member states are taking measures to finance and even write of the debts, restructure, privatize these state owned enterprises. All measures involving state aid are always implemented after it has been approved by the relevant commission. An assessment of the compatibility of state aid is done on the basis of the treaty on the functioning of the European Union. This treaty contains the rules and regulations necessary for the smooth running of the state aid hence minimizing conflicts. State aid is composed of four components which are vital for it to be considered a state aid. A state aid must be granted by the member state or through its state resources with regard to stated rules. It can be delegated to the department of state like the municipalities or even the regions of the state. The undertakings of state aid are made public since it’s considered imputable to the state due to the state resources involved. The undertaking of state aid is done in favor of certain production of goods and services due to its selective advantage. The recipient of state aid thus is to solve an economic activity thus enhancing the provision of goods and services despite its legal framework. The state aid rules apply for both private and public undertakings weather its run for profit or not. Mandate of the commission on state aid The state aid procedure is developed to ensure smooth and orderly operations of thus avoiding several state aid cases which are likely to come up (EU, 2012). According to EU working paper, the state aid measures and schemes must be notified and approved by the commission before its
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3 commencement. The commission the looks at the guidelines and considers its effects before approval. The commission is thus mandated to oversee the adherence of the state aid undertakings with the rules so as to minimize conflicts as possible (Salmon, 2012). Any state aid done without the approval of the commission is considered unlawful and may be recovered without notice. The commission always approves the state aid measures within a period of two months from the period of notification (Salmon, 2012). The commission is mandated to decide weather a measure is aid or not or weather it is aid but compatible with market forces and also to investigate the effects on the market forces. The commission is mandated to begin an investigation procedure and carry out assessment as to determine possible grounds of compatibility. The commission less restricted with when it comes to investigations and thus able to carry out investigations any time it deems appropriate. The final commission decision closes its formal investigation and it then makes recommendations regarding its findings. The
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