Competition policy and the Covid-19 opportunity

Abstract

This short paper argues that the COVID-19 crisis provides an opportunity for improvements in long term growth in the EU by allowing the exit of zombie firms that trap industries into low productivity cycles, limited technology diffusion, and weak economic dynamism. To seize this opportunity, competition policy must abandon its focus on rivalry. And it must embrace a politically costly, yet economically sound non-horizontal approach in State aid and merger control.