STATE AID CONTROL TO EU STANDARDS: EXPECTATIONS AND IMPLICATIONS IN THE CONTEXT OF A STABILIZATION AND ASSOCIATION AGREEMENT
STATE AID CONTROL TO EU STANDARDS: EXPECTATIONS AND IMPLICATIONS IN THE CONTEXT OF A STABILIZATION AND ASSOCIATION AGREEMENT

Summary/Abstract: This article reviews the nature and development of EC law and policy regarding state aids in its political, legal and economic context with particular reference to the likely requirements on Yugoslavia under a future Stabilization and Association Agreement with the EU to develop a credible national system of supervision and control. The development of such a system is also connected with Yugoslavia’s efforts to re-join the WTO. The article traces the development of the EU state aid control system and highlights its main focus and method of operations. It notes that, even while the EU is progressively insisting upon comparable systems in all regions with which it is establishing new treaty-based trade relations, state aid levels remain problematic within the EU itself and the enforcement efforts against EU Member States are increasing. The Croatian and Macedonian Stabilization and Association Agreements contain commitments regarding the development of national systems of state aid control in both countries that broadly reflect the earlier process with the present candidate countries for EU membership under the Europe Agreements. An overview of the Croatian and Macedonian commitments gives reason to suggest that a reasonably strict regime of state aid control will also be expected in the case of a Stabilization and Association Agreement between the European Union and Yugoslavia. This will necessitate substantial action in Yugoslavia (including legislation training, political will and international reporting) to ensure credible compliance with new international commitments. Accordingly, it will be particularly important to design and develop a Yugoslav competence in this field and to design a system of regulation that makes sense and can work in Yugoslavia. This will take both time and effort and the article considers that it is of some importance that these efforts are commenced sooner rather than later in Yugoslavia. In overall terms, the development of suitable controls over state supports to the private sector can be a good thing for Yugoslavia, ensuring that government funds are well spent, now and in the future, that competition is not unduly affected and that there is transparency and rationality in regard to what is available in the form of government supports to business and economic development.

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