Reimagining State Aid: Guiding Law and Policy Reform in a Changing World

ABSTRACT

EU state aid law has shifted fundamentally from an originally purely repressive tool to a proactive steering mechanism for critical EU goals today. This paper argues that the current legal framework in Article 107 TFEU is gravely misaligned with this new function. The paper outlines the novel challenges and contrasts them with current state aid law, exposing anachronism and systemic friction. In response, the paper proposes a systemic reform agenda that redefines the Treaty's notion of state aid to further strengthen its steering role, avoid overenforcement and align the regime more closely with the strategic orientations of the Letta Report.