Hamiltonian Shifts in State Aid and the Coming Breakdown of the Internal Market: Can the European Union Survive Its COVID-19 Response?

Authors

Richard Dacher, Benjamin N. Cardozo School of Law

Abstract

This Note analyzes the consequences of the COVID-19 pandemic to the legal structure of the EU and its path forward. The EU's and the member states' actions to combat the pandemic have brought the political and economic union to the precipice of a breakdown of the Internal Market. Fiscal policies mirroring those of the United States will likely rise in its place. Recent tax court decisions, acquiescence to federal debt-sharing schemes, and deregulated state aid policies highlight the federalization of the EU as a unified economic structure, and also foreshadow its diminished influence over the member states' state aid policies. Structural reform to the EU's state aid regime may be inevitable. Without further economic federalization, however, the EU risks mirroring the United States system of interstate competition, but without the fiscal safety nets. As the EU moves further away from its codified state aid regime and as the resiliency of competitive balance among the member states is tested, the EU must decide whether continued structural reform toward a more unified fiscal entity is desired. Despite the economic risks and likely pushback from the member states, continued fiscal unity at the federal level will ensure the EU's survival and future geopolitical influence.

Disciplines

Comparative and Foreign Law | Human Rights Law | International Law | Law | Law and Economics | Taxation-Transnational

Recommended Citation

Richard Dacher, Hamiltonian Shifts in State Aid and the Coming Breakdown of the Internal Market: Can the European Union Survive Its COVID-19 Response?, 5 Cardozo Int’l & Compar. L. Rev. 291 (2021).
Available at: https://larc.cardozo.yu.edu/ciclr/vol5/iss1/10