Browsing by Subject "uusklassismi"

This thesis explores state aid’s role in the EU’s political economy. The central research question is: should the EU foster its state aid approach? The thesis focuses on an in-depth analysis of the debate within the EU on the possible relaxation of the state aid framework and its potential impact on fair competition in the single market. The theoretical framework deals with neoclassical economics, Keynesian economics, and geopolitics from a realist perspective assessing states’ power relations. This combination provides a basis for comparing the research problem within the EU and globally. The research methodology is based on qualitative content analysis in an attempt to explain the state aid critique, the motives, and the profitability. Lastly, I apply Mariana Mazzucato’s moonshot-like approach to policy formulation in the light of state aid and harmonise Keynesian thinking into the argument. The findings show the need for the EU to reframe its state aid policy. State aid resources vary across EU Member States and empirical evidence suggests that attitudes towards state aid differ. The clear upward trend in the use of state aid over the last decade suggests an opportunity to move from a ‘temporary’ to a more permanent approach. Such a change should include the creation of a separate body to harmonise state aid and monitor its effective targeting, allaying concerns about possible Single Market violations imposed on the Single Market. The thesis concludes by seeing from a heterodox perspective that there is a strong implication that state aid will continue to be used when situating the EU within great power politics between West and East: USA and China. Hence, the solutions needed are in reframing the approach to how the EU currently considers state aid. It is important to recognize the global challenges that the EU faces when assessing what is normatively worth pursuing. State aid could be a double-edged sword hurting its Single Market while boosting EU’s competitiveness in the global markets, hence the task is to focus on keeping the blade directed to the global markets and silencing the worry of state aid hurting EU internally if it ought to be continued to use.