An Economic Assessment of the Usability of the New General Block Exemption Regulation for State Aid (Regulation 651/2014)

Introduction:

"The purpose of this paper is to consider the usability of the GBER. An assessment of the impact of the provisions of the GBER is beyond the scope of this paper, especially given that the GBER is now much wider in scope. The paper develops a simple model that considers a trade-off between the clarity of the provisions of the GBER and the cost of designing compatible measures. It also takes into account the cost of submitting notifications to the Commission. The main findings of the paper are that, first, the new GBER is clearer. Secondly, and perhaps surprisingly, the new GBER is more attractive to Member States not so much because it is clearer or wider in scope, but because the alternative option of notification is more costly. Thirdly, the new requirement concerning publication of individual state aid awards may be an effective instrument in preventing ad hoc aid that is incompatible with the internal market."