The Current Financial Crisis and State Aid in the EU

By Abel M. Mateus on March 17, 2011

In The Current Financial Crisis and State Aid in the EU (European Competition Journal, April 2009), Dr. Abel M. Mateus, Director at Global Economics Group, analyzes the various state responses to the financial crisis of 2007-2009. Dr. Mateus presents the unique dilemma facing the European Union: on the one hand, because each country has specific regulatory systems, it makes little sense for the EU to intervene on an international scale, but on the other hand, the EU’s intervention and response to the financial crisis was critical to the region’s ability to cope. Dr. Mateus demonstrates that, in this situation, the European Commission acted well in supplying an international response to the financial crisis, but should have in fact gone even further by holding off liquidation as a last resort rather than as a second alternative. Dr. Mateus concludes that systems must be in place to respond to international crises and that in response to the crisis of 2007-2009, we need to use all our expertise and lessons from past crises, and all the instruments”fiscal, monetary, state aid and regulatory policies”in a coordinated and harmonic way. The Current Financial Crisis and State Aid in the EU