STATE AID IN SEPARATE “SENSITIVE” BRANCHES OF UKRAINE’S ECONOMY

Abstract

The law of Ukraine “On the state aid to economic entities” that will act to the full extent in 2017 will be a start of the formation of a system of control over the state aid in Ukraine according to the EU standards and requirements of the Ukraine–EU Association Agreement. In order to determine the state aid tools, which will be used in Ukraine according to the norms of EU after August 2017, the authors give the review of the legislation of EU regulating the state aid extension and the general rules of EU concerning the sectoral aid extension and analyze the state support of “sensitive” branches of the EU economy such as the coal mining, steel industry, and banking. According to the legislation of EU, the sectoral state aid is admissible in the cases where it favors the attainment of economic and social purposes of the level of EU: the elimination of essential differences in the regional development, acceleration of certain kinds of the activity due to the social reasons, and a decrease in the distortion of a competition resulting from the events outside EU. A number of rules and criteria, by which the European Commission evaluates the demands for the sectoral aid extension to countries – members of EU, are described. For example, the state aid extension must be limited by the cases where it is substantiated by the situation in a relevant branch and by the necessity of a long-term recovery of subject’s profitability. For example, the aid aimed at the absorption of current costs (operational state aid) for economic entities in the metallurgical and coal-mining branches is considered inadmissible. However, the support of scientific-research and innovative activities and the professional training can be permitted. The presented conclusions based on the study of the state support in Ukraine indicate the types of a state support or help that can be given or will be given in the future by the regional and local authorities to “sensitive” and other branches of Ukraine’s economy.