Update: State Aid and Foreign Investment – Finance 2nd October, 2014

QUESTION NO:  75
DÁIL QUESTION addressed to the Minister for Finance (Deputy Michael Noonan)
by Deputy Bernard J. Durkan
for WRITTEN ANSWER on 02/10/2014 

 To ask the Minister for Finance in view of recent efforts to prevent State aid that might be used to encourage foreign direct investment here and in other countries throughout the Eurozone, if foreign direct investment in non-Eurozone states is being equally discouraged with particular reference to such investment in Europe and Asia; and if he will make a statement on the matter.
 
REPLY.

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.