EU State Aid in Crises: Rapid Response, Monitoring Gaps

This special report examines the European Commission's management of State aid during the COVID-19 pandemic and Russia's invasion of Ukraine. It finds that while the Commission swiftly adopted temporary frameworks enabling Member States to grant unprecedented aid, the targeting of aid was often insufficient, with the COVID-19 framework not adequately focused on the most affected undertakings. The Commission's assessment of national measures was rapid but frequently based on limited information, and monitoring efforts were reduced despite a surge in State aid expenditure from €120 billion pre-crisis to over €320 billion in 2020-2021. Member States' controls relied heavily on self-declarations, and reporting data was unreliable, hampering evaluation of the frameworks' effectiveness and impact on competition. Additionally, the report highlights inconsistencies in the complex set of State aid rules supporting the European Green Deal and industrial policy objectives, noting a lack of economic analysis and assessment of the temporary crisis and transition framework's necessity. The report concludes with recommendations for more effective surveillance and a more consistent framework for future crises.