State aid expenditure in the EU has risen in recent years against the background of economic shocks such as the COVID-19 pandemic, Russia’s unjustified war against Ukraine and, most recently, the crisis in the Middle East, as well as a global resurgence of interventionist industrial policy. While traditionally aimed at addressing market failures and achieving policy objectives like regional cohesion and environmental transition, State aid has increasingly shifted towards supporting industrial competitiveness, decarbonisation and strategic resilience. This box provides first evidence of this evolution, while further analysis is warranted on how State aid can effectively support shared EU objectives and new industrial priorities while safeguarding competition within the Single Market and maintaining fiscal sustainability.
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