State Aid Control: Substance and Procedure in the Europe Agreements and the Stabilisation and Association Agreements.

Abstract: Community agreements with third countries frequently contain provisions on State aids. These provisions are designed to achieve a range of different objectives, related both to developing trade between the contracting parties and to economic and legal/regulatory development within the partner State. This paper takes a particular model of State aid clause—those found in the Europe Agreements (EAs) and the Stabilisation and Association Agreements (SAAs)—in order to explore the implications of a harmonisation obligation applied within the context of accession to the EU. In these agreements the State aid rules—and in particular those relating to the application of Community-based criteria—are intended to contribute to the pre-accession adoption of the acquis communautaire by the associate States (including those who are not yet candidates). These clauses are striking in their emphasis on the full adoption of Community-based standards for the approval of aids, including large quantities of ‘soft law’, while saying very little as to the appropriate procedures for enforcement. The experience of implementing these clauses illustrates the practical difficulties of applying Community norms and standards outside the procedural structures, integration mechanisms and single market objectives of actual EU membership. The associate States are required to demonstrate their capacity for applying and enforcing the Community-derived rules while balancing the needs of their own economic development against an undefined ‘common interest’. [ABSTRACT FROM AUTHOR]