‘BAILOUTS’ – REVISION OF THE EU STATE AID POLICY

The current global financial crisis has both challenged and changed the European Commission’s interpretation of EU State aid law. In the first phase of the economic meltdown, the Commission systematically relied on the established EU State aid rules, notably the Guidelines on rescue and restructuring aid for firms in difficulty. As the crisis unfolded, the Commission recognised that those rules were insufficient and decided that tailor-made measures should be envisaged in order to fully address the problems faced by the banking sector. This article analyses the evolution in the Commission’s approach to State aid measures granted to ailing financial institutions. It is argued in conclusion that the revision of the State aid policy was a necessary step forward.