Ten Years after Accession: State Aid in Eastern Europe.

Abstract

In the early phase of transition that started with the 1990s, Central and Eastern European Countries (CEEC) have pursued far-reaching vertical and individual industrial policy with a focus on privatisation and restructuring of traditional industries. Foreign investment from the West and the facilitation of the development of a market economy also involved mas- sive injections of State support. With their accession to the European Union (EU), levels and forms of State aid came under critical review by the European Commission. Now that a first decade has passed since the first Eastern enlargement in 2004, this inquiry investigates how State aid policy in the CEECs has developed during the last ten years and whether the inte- gration of the new Member States operates on a level playing field with respect to State aid. The findings suggest that once having entered the EU as full members, the new members from the East appear to have been converging into rather stringent competition cultures.