Horizontal aid in the European Union

Abstract

The paper discusses the question how the horizontal approach to industrial policy adopted by the European Commission is reflected by shifts in trends of state aid allocation in the EU member states (reorientation from sectoral to horizontal objectives). The first part of the paper presents the arguments in favour of horizontal state aid related to the concept of so-called market failure. The second part deals with the EU industrial policy programmes that have been implemented since the beginning of the 1990’s. The third part describes the trends in state aid allocation in the EU member states. The conclusion drawn from the observations presented in this part of paper is that the share of horizontal aid in total aid is high and systematically increases.