European Union State Aid Law and Policy, and Local Public Services

Abstract

Financing of local public services is, in principle, subject to the European Union State aid law and policy. Thus, local authorities of Member States and certain other stakeholders shall carefully observe complex and restrictive State aid rules, since their breach can substantially impair the desired performance of local public services. However, a daily practice at local level, in particular within the new Member States, still reveals significant shortcomings which can be, at least to certain extent, imputed to complexity and considerable rigidity of the State aid rules. The European Commission has recently offered new set of rules, the so called Almunia package, aimed at bridging the said problems. The Almunia package is of great importance for the local public services and their stakeholders as it has offered considerable simplifications for the small, mostly locally oriented projects. Indeed, the new package is an important step in the right direction, at least from the local public services perspective.