[Blog] When state aid gets political

Control over state aid is a stumbling block for the future of a EU-UK trade agreement. The EU is seeking dynamic alignment of any future UK state aid rules. This is a bold demand, especially since the EU state aid rules will be in a state of flux in the forthcoming years. But if no agreement is reached there are implications for domestic UK policy. The Political Declaration of 17 October 2019 agreed the need for a level playing field (LPF) for open and fair competition through regulatory convergence with common high standards in the areas of state aid, competition, social and environmental standards.[77] The EU mandate requires the application of the state aid rules if the UK wants to maintain access to the Single Market. This is consonant with the Association Agreements (AA) with the countries bordering the EU, especially the sophisticated EU-Ukraine AA. But the EU has set greater obligations for the UK.