Fifty Years of Molding Article 87: The European Commission and the Development of EU State Aid Policy (1958-2008)

This study explores the development of state aid law and policy in the European Union. It focuses on how the European Commission utilized the authority delegated to it under the Rome treaty to shape the meaning of Article 87 (ex Article 92) and how, in doing so, was able to shape the legal contours of the state aid regime. The chief means by which the Commission molded policy was to use its administrative discretion to manipulate the pliant language of the provisions contained in Article 87. The study also emphasizes the constraints on the exercise of Commission autonomy. The Commission had to cope with a “dilemma of discretion” at the heart of its state aid mandate. Even as the Commission had considerable autonomy to exercise its delegated autonomy, it was also subject to embedded institutional control mechanisms and political pressures that served to condition that autonomy. We argue that the history of EU state aid policy is written in the efforts of the Commission to navigate that dilemma