1. Mid-September 2007, images of British people queuing to withdraw their savings from local branches of UK mortgage bank Northern Rock hit the screens of millions of bemused Europeans who were told that the “subprime crisis” had crossed the Atlantic. However, barely anyone outside the UK had ever heard about Northern Rock and the UK government seemed to take care of the problem. In the following months, the crisis spread to credit institutions with a particular risk profile, namely those that had relied on assets securitization to fuel their growth and/or had invested heavily in mortgage-backed securities. As a result, various EU Member States were prompted to address solvability issues on a case by case basis. As from March 2008, the situation further deteriorated. While the US
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ARTICLE - FINANCIAL CRISIS - EU CONTRIBUTION TO A SOLUTION - COMPREHENSIVE LOOK AT THE EU ENFORCEMENT OF EC COMPETITION LAW - STATE AID - MEMBER STATES ECONOMIC POLICIES
EC competition law enforcement at grips with the financial crisis : Flexibility on the means, consistency in the principles
The financial crisis is today’s most challenging issue faced by political and economic leaders across Europe and the world. It has been commented at length in recent months, including with respect to the European Union’s contribution to a solution thereto. Away from the polemics, this article takes a comprehensive look at the European Commission’s enforcement of EC competition law, in particular State aid rules, in the framework of the financial crisis. It is divided into two parts corresponding to what the author views as the two main policy options pursued by the Commission, namely : (i) “flexibility on the means” ; but (ii) “consistency in the principles”. Those options appear to condition the possibility and legitimacy of the Commission’s involvement in managing the crisis and have actually enabled the Commission to play a critical role so far, which, given the circumstances, has evolved into one of coordination between the 27 EU Member States’ respective economic policies. * Kindly note that the present contribution reflects the decisional practice of the EU Commission up until December 31, 2008. References are made to Commission’s press-releases when formal decisions are not yet publicly available.
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