Under EU competition law, state aid rules exist primarily to:

Question

BlackTom AI · Accepted Answer

When evaluating the purpose of EU state aid rules, several underlying principles come into play that shape the analysis of each option.
Option a: 'Protect consumer welfare' — This aligns with the core objective of EU competition policy. By restricting distortions from government subsidies, the EU aims to maintain effective competition, lower prices, and better choices for consumers. The logic is that where state aid could prop up inefficient firms or alter market dynamics, consumer welfare would typically be harmed, so rules seek to prevent that.
Option b: 'Promote EU corporate champions' — This characterizes a protectionist or industrial-policy rationale, which EU state aid rules explicitly avoid as their central aim. The EU emphasizes competition within the single market rather than directing subsidies to create favored national champions, because doing so could distort cross-border competition and fragment the internal market.
Option c: 'Protect small and medium enterprises' — While SMEs may benefit indirectly from a level playing field and reduced distortions, the rules are not designed primarily to shield SMEs as a category. The objective is broader: preventing distortions to competition that harm consumers and the market as a whole, not selectively preserving particular firm sizes.
Option d: 'Promote national industries' — This option reflects a nationalist industrial policy, which runs counter to the EU’s principle of an open, integrated market. State aid controls are meant to avoid favoring one member state’s industries over others, which would undermine the single market and equal treatment among competitors from different countries.
In summary, the reasoning behind the state aid framework centers on limiting distortions to competitive markets to safeguard consumer welfare and overall market efficiency, rather than advancing specific corporate, SME, or national-industry goals. The framing of the rules consistently targets maintaining a level playing field and preventing undue advantages deriving from public subsidies.

SESS0026_25-26 MCQ test - MOCK

Under EU competition law, state aid rules exist primarily to:

View Explanation

Log in for full answers

Similar Questions

Under EU competition law, state aid rules exist primarily to:

In a consumer society, many adults channel creativity into buying things

Economic stress and unpredictable times have resulted in a booming industry for self-help products

People born without creativity never can develop it

A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

Which of the following statement regarding cost is correct:

Under the assumptions used in cost-volume-profit analysis, as the activity increases:

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler