The purpose of State Aid control is to ensure that State intervention does not interfere with the smooth functioning of the internal EU market or harm the competitiveness of EU undertakings. It does not seek to encourage or discourage foreign direct investment into the EU or Eurozone, but rather to remove distortions to competition between EU Member States.
State Aid policies are an intrinsic part of the overall competition policy of the EU. Competition policy is an instrument for the achievement of the EU's aims, which include achievement of economic growth, prosperity, social protection, employment and cohesion between Member States.
To ensure that competition in the internal market is not distorted, EU law provides for a number of fundamental Freedoms which remove obstacles to free movement of goods, persons, services and capital between Member States. It also seeks to prevent distortions to competition which may rise from collusive agreements between firms; abuses of dominant market positions; or unjustified state aids.
State Aid controls maintain a level playing field between Member States and ensure that State intervention is kept to a minimum, in order to ensure that markets and businesses can continue to operate effectively.