The EEA state aid rules and the role of ESA

ESA monitors state aid granted by Iceland, Liechtenstein and Norway in the same way as the European Commission does in the EU.

What is state aid?

State aid is public financial assistance to entities engaged in economic activities. For example  government grants to businesses. State aid can consist of public support measures in numerous forms, such as tax exemptions, loans on preferential terms, guarantees and investments in share capital made by public authorities on terms that would not be acceptable to a private investor.

The state aid rules

The state aid rules in the EEA Agreement are broadly equivalent to the state aid rules in the Treaty on the Functioning of the European Union which apply across the EU. There is a general prohibition on state aid in order to prevent distortions of competition and negative effects on intra-EEA trade. The rules seek to ensure a level playing field for companies across Europe, and to prevent government assistance being used as a form of protectionism. There are exceptions, recognising that government intervention can be necessary to correct market failures and for social purposes, for example through regional policy or efforts to reduce unemployment.

The role of ESA

The general prohibition on state aid that applies in Iceland, Liechtenstein and Norway is enforced by ESA. It is also ESA's role to decide how the exceptions to the prohibition are to apply.

Unless it is covered by the General Block Exemption Regulation or similar rules, plans to grant new state aid must be notified to ESA prior to implementation. ESA must then assess whether it is compatible with the state aid rules. ESA has adopted guidelines on the interpretation of the state aid rules. These guidelines codify the approach that will be taken by ESA in assessing state aid cases. The guidelines are broadly equivalent to the corresponding guidelines, communications and notices adopted by the Commission.

Other EEA Institutions

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