State Aid and Investment Screening: A Multifaceted Relationship

Grith Skovgaard Ølykke, Louise Tandrup Christensen

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This chapter examines the relationship between State aid rules and the EU Screening Regulation, which may be characterised as multifaceted. Whereas State aid law in its nature limits Member States’ room for manoeuvre in the sphere of industrial policy, the new EU Screening Regulation provides an arguably broad room for manoeuvre for Member States to intervene in markets to protect public security and public order. However, it may be argued that this broader manoeuvring room could lead to a clash between the two sets of rules. The first facet of the relationship between the rules that are examined is where FDI screening leads to the granting of State aid. This could occur in connection with privatisation of State-owned undertakings; FDI screening may lead to the undertaking being sold to the second-best bidder following a disqualification of the best bidder. Such a situation would prior to the entry into force of the EU Screening Regulation lead to State aid to the buyer. Another facet is third country subsidised FDI. Although this topic has not been addressed explicitly during the legislative process leading to the adoption of the EU Screening Regulation, there are traces of subsidised FDI being an issue of concern, and the EU Screening Regulation in certain ways facilitates that subsidisation of the FDI could be taken into account by the screening Member State. It is concluded that many stones in the relationship between State aid law/third country subsidies and FDI screening are left unturned by the EU Screening Regulation.
Original languageEnglish
Title of host publicationYSEC Yearbook of Socio-Economic Constitutions 2020 : A Common European Law on Investment Screening (CELIS)
EditorsSteffen Hindelang, Andreas Moberg
Number of pages25
Place of PublicationCham
Publication date2021
ISBN (Print)9783030437565, 9783030437596
ISBN (Electronic)9783030437572
Publication statusPublished - 2021
Externally publishedYes
SeriesYSEC Yearbook of Socio-Economic Constitutions

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