ABSTRACT
A further example of the interface between public and private law (see Chapter 6) is the state aid regime contained in Article 87 of the EC Treaty. The rules concern any financial support provided by governments to companies. State aid needs to be regulated because it distorts competition if given in too high a dose, and provides a crutch to companies that cannot stand up to competition. Unsubsidised firms who must compete with those receiving public support may ultimately run into economic difficulties, causing loss of competitiveness in the market. Furthermore, state aid exports unemployment and inhibits the creation of the single market and the efficiency of resource allocation within the EU. Nevertheless, it would be wrong to assume that the Commission sees all aid as contrary to Community law. In fact, several forms of state aid are looked upon favourably; most of those have a social character, as will be seen below.
