IDEAS home Printed from https://ideas.repec.org/p/bon/boncrc/crctr224_2020_179.html
   My bibliography  Save this paper

State Aid Policies in Response to the COVID-19 Shock: Observations and Guiding Priciples

Author

Listed:
  • Massimo Motta
  • Martin Peitz

Abstract

The drastic economic shock suffered around the world has led many countries to roll out support programmes to its economies. Firms in difficulties may have part of their labour costs covered by the state, may be allowed to postpone due tax payments, and may be beneficiaries of sector-specific or company-specific support programmes. In this article, the authors reflect on the general challenges when designing state aid policies and set out some guiding principles on state aid programmes by EU member states. They address the challenges that arise within the European Single Market when individual EU member states implement their own, non-harmonised programmes. In particular, such programmes run the risk to the distort competition in the Single Market. This risk is particularly pronounced for state support that goes beyond short-run liquidity provision and employment support. Oversight by the European Commission and EU-wide programmes for critical sectors are seen as essential to maintain the Single Market intact.

Suggested Citation

  • Massimo Motta & Martin Peitz, 2020. "State Aid Policies in Response to the COVID-19 Shock: Observations and Guiding Priciples," CRC TR 224 Discussion Paper Series crctr224_2020_179, University of Bonn and University of Mannheim, Germany.
  • Handle: RePEc:bon:boncrc:crctr224_2020_179
    as

    Download full text from publisher

    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp179
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Massimo Motta & Martin Peitz, 2020. "EU state aid policies in the time of COVID-19," Vox eBook Chapters, in: AgneÌ€s BeÌ nassy-QueÌ reÌ & Beatrice Weder di Mauro (ed.), Europe in the Time of Covid-19, edition 1, volume 1, chapter 1, pages 73-77, Centre for Economic Policy Research.
    2. Massimo Motta & Martin Peitz, 2020. "The EU recovery fund: An opportunity for change," Vox eBook Chapters, in: AgneÌ€s BeÌ nassy-QueÌ reÌ & Beatrice Weder di Mauro (ed.), Europe in the Time of Covid-19, edition 1, volume 1, chapter 1, pages 78-82, Centre for Economic Policy Research.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dorothée De Franclieu & Émilie Hermet, 2021. "State aid in the Covid-19 crisis: a European dilemma [Les aides d’État dans la crise Covid 19 : un dilemme européen]," Bulletin de la Banque de France, Banque de France, issue 238.
    2. Julia Anderson & Simone Tagliapietra & Guntram B. Wolff, 2020. "A Framework for a European Economic Recovery After COVID-19," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 55(4), pages 209-215, July.
    3. Antoine Camous & Grégory Claeys, 2020. "The evolution of European economic institutions during the COVID‐19 crisis," Post-Print hal-03972146, HAL.
    4. Antonia Díaz & Luis A. Puch, 2021. "EU After COVID-19: An Opportunity for Policy Coordination," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 56(4), pages 197-200, July.
    5. Antonia Díaz, 2020. "Common Fiscal Capacity Is Needed to Strengthen Risk Sharing," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 55(4), pages 215-219, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Donato Masciandaro, 2020. "Covid-19 Helicopter Money, Monetary Policy And Central Bank Independence: Economics And Politics," BAFFI CAREFIN Working Papers 20137, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    2. Donato Masciandaro, 2020. "Ecb Helicopter Money: Economic And Political Economy Arithmetics," BAFFI CAREFIN Working Papers 20138, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    3. Werner Hölzl & Philipp Schmidt-Dengler, 2020. "Ein Mechanismus zur Unterstützung von Unternehmen in der COVID-19-Krise," WIFO Research Briefs 7, WIFO.

    More about this item

    Keywords

    state aid; recapitalisation; COVID-19; European Single Market;
    All these keywords.

    JEL classification:

    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bon:boncrc:crctr224_2020_179. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CRC Office (email available below). General contact details of provider: https://www.crctr224.de .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.