State aid monitoring and control: Sharing of experience VI Competition Forum of Ukraine Kyiv, 3 March 2017

Introduction of the national State aid control system - starting point Before the change of the system from the socialism to market economy there was no State aid policy in many countries acceding the EU in 2004 or 2007 After signing the European Agreements in 90-ties of the 20th Century, harmonization of the national legal framework with the EU State aid rules had commence 16.11.2016

Some reasons of granting State aid To stimulate foreign investments To solve some tasks of economic development of the country To keep companies alive to safeguard working places To clean companies’ balance sheets before privatisation Simply to keep some companies afloat 16.11.2016

Process of alignment After the negotiations started on countries’ future membership into the EU, immediate abolishment of the national laws and regulations incompliant with the EU State aid law had been requested The hardest discussions with the European Commission were on acquired rights Transitional arrangements in the Accession Treaties for some countries joining the EU in 2004 (Poland) 16.11.2016

State aid framework provides some discipline for political forces It is very important tool to better focus the use of public resources and avoid waste of taxpayers’ money Objective of the State aid control is to grant public funds for the lowest possible costs for citizens Public funds spent for activities that an undertaking would undertake anyway is waste of public resources 16.11.2016

State aid regime serves internal market and competition EU State aid regime provides the same playing field for all EU Member States irrespective of their wealth It serves to avoid subsidy race between different EU countries Measures providing benefits to individual companies risk distorting competition as they discriminate between companies that receive assistance and others that do not 16.11.2016

Is the EU State aid law restrictive? It is important to focus on types of support that is key for the growth of economy and limits interventions of the State which are peventing inefficient companies from leaving the market Interventions by the State shall compliment market forces and target support to well defined market failures to fix them 16.11.2016

Negative consequences of State aid State aid may lead to: Companies being inefficient Unfair competition in the market for efficient companies Keep companies artificially alive 16.11.2016

Whisely granting State aid deams may come true Whisely granting State aid deams may come true! Thank you for your attention! 16.11.2016