Answer given by President Juncker on behalf of the Commission
The European Council Guidelines of 29 April 2017, 15 December 2017 and 23 March 2018 set the framework for the Commission to carry out on behalf of the Union the negotiations for the withdrawal of the United Kingdom under Article 50 of the Treaty on European Union (TEU).
In its Guidelines of 29 April 2017, the European Council (Article 50) stated at paragraph 20 that ‘Any free trade agreement should be balanced, ambitious and wide-ranging. It cannot, however, amount to participation in the Single Market or parts thereof, as this would undermine its integrity and proper functioning. It must ensure a level playing field, notably in terms of competition and state aid, and in this regard encompass safeguards against unfair competitive advantages through, inter alia, tax, social, environmental and regulatory measures and practices.’
Within the Union, State aid rules make possible for public authorities to finance employment and encourage investment. More than 90% of aid is currently exempted from the notification to the Commission under the Block Exemption Regulation. State aid rules make sure that aid is necessary, proportionate and well targeted and does not create undue distortions of trade and competition, between companies and between Member States. Without state aid rules Member States could engage in disruptive beggar-thy-neighbour policies, be at the mercy of large multinational shopping around for the largest subsidies, end-up distorting competition between firms and preventing the most successful enterprises to succeed and create growth and jobs. State aid control is thus at the core of the proper functioning of the Single market and helps European industries to become stronger competitors in the global arena.