Nudging states with policy and regulation : the impact of the state aid modernisation in the European economic area

Abstract

The thesis asks: What impact does the State aid Modernisation reform have on law enforcement in the European Economic Area (EEA)? The hypothesis is that adjustments in procedural and substantive law can nudge States expenditure and increase the overall coherence in the application of a legal framework. The study highlights some obvious side effects and positive aspects of State aid enforcement under the EEA-model that deserves attention from EU enforcers of State aid law. The outcome of the reform is tested against four benchmarks: (i) efficiency, in reducing notifications to focus on cases with the most impact on the internal market and increase decisional speed, (ii) transparency on how aid measures are assessed both centrally and nationally, (iii) the “userfriendliness” of the legal framework, assessed by the user-frequency and how harmonised terms in regulations and guidelines are, and whether the reform boosts (iv) coherence of States application and expenditure. The thesis is divided in three parts covering all procedural and substantive changes. Part I assesses new and amended tools in the Procedural Regulation, used by the supranational authorities at a centralised level. Part II assesses the three new procedural elements in the General Block Exemption Regulation, which ensures procedures for the States to comply with State aid at a decentralised level. Part III assesses the substantive amendments to block-exemptions and guidelines. The thesis particularly evaluates, whether the right balance is struck between centralised (supranational) and decentralised (national) application of State aid regulation in the reform – and assesses the success of the privatization of legal enforcement at national level. The empirical findings indicate that the amendments are efficient at freeing the Commission’s time and nudging States aid expenditures. However, there is still potential for a greater impact if the transparency was increased and thresholds of the information collection tools were lowered.