"State aid control: 'The rule of law' or governance by guideline?"

Bevis, Inda. (1997) "State aid control: 'The rule of law' or governance by guideline?". In: UNSPECIFIED, Seattle, WA. (Unpublished)

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Abstract

The Treaty of Rome imposed the duty on the European Community of supervising the granting of aid by public bodies to private industry where this distorts or threatens to distort competition. This competence is unique to the European Community--giving power to the Community to regulate national and regional industrial policy. This area is of interest to lawyers, political scientists, and economists. Recent and current high profile cases in the airline and banking sectors have raised awareness of this under-researched area. DG-IV has increasingly relied on a strategy of producing communications and frameworks to impose legal coherence in the control of State Aid, but these are at present of dubious legal effect, and have themselves been challenged before the Community Courts. A recent case "reinterpreted" a framework so that it was deemed to have expired six months previously. From the practical point of view, therefore, if the Commission is to use "legislative-type" instruments, as distinguished from mere statements of policy, and encourage those with which it deals to rely on them, there must be the confidence that these will survive legal challenge. However, the subject of this paper raises broader issues than the control of State aid, important though this is. The accordance of a legally binding effect to some of these sectoral aid disciplines constitutes a source of law which has only comparatively recently been recognised as a source of legal obligation. This paper therefore constitutes a case study of the birth of a novel source of "law," a record of the attempt by the Courts of the European Community to determine the boundary between "real" law and "mere" politics. The area examined is certainly not settled; many contradictions remain which will no doubt be clarified in future court challenges.

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