ABSTRACT
The control of financial incentives in Europe has attracted considerable attention. This chapter considers the general context for the control of incentives in Europe. It focuses on the control of regional financial incentives, which have become the main incentives used to attract foreign direct investment (FDI). The chapter reviews some of the options for controlling incentives for FDI. It also considers some of the challenges facing future policy development. The chapter outlines an apparently formidable array of powers for controlling subsidies in the EU. The proposals involved setting cost-per-job limits to investment eligible for incentives. The introduction of a system that would increase Commission involvement in individual award decisions, and potentially make it the arbiter in incentives for major mobile investments would require considerable thought. The Community approach to disciplining subsidies contains the key elements needed to ensure effective control of incentives.
