Global Journal of Human Social Science, E: Economics, Volume 21 Issue 4

the aid. it also does not take into account the potential (market foreclosure) distortive effect on competitors. III. E mpirical R esults of S tate A id There is no MS where no State aid is granted. Between 2004 and 2019 the total spending was 0.7% of GDP on average. On the basis of data provided by the MSs, DG COMP publishes an annual report (namely Scoreboard) on subsidies according to their category, form (direct/indirect) and purpose (horizontal, sectoral) on the basis of 704/2004 Regulation. The aid amounts are collected at current price and with the exception of the euro area are converted into constant prices by the inflation rate of the given reference year in the given MS. According to the latest statistics in 2019 the overall spending by MSs for State aid was EUR 134.6 billion, including Croatia and the United Kingdom as well. The Source: Author’s Calculation based on State Aid Scoreboard, Eurostat While the total State aid spending scattered with a range between 0.51% and 0.93% as a whole in the EU; among the MSs there can be observed relatively higher disparities with values scattering from 0.04% to 4.35% between 2004 and 2019 (Figure 2.). So much the worse in the case of GDP growth rates: as a whole in the EU it fluctuated between -5.4% and 5.1%, disparities at country level are more significant, it varyed between - 14.8% and 25.5%. State aid can be considered to be relatively independent from GDP growth rate. It can be assessed that the level of subsidies seem to be inflexible to the macroeconomic performance. Due to the crisis it has not shown significant increase as regards spending on subsidies but afterwards it has raised parralel to the growth rate. Nevertheless, the impact of the financial crisis has remarkably spilled over the MSs but affected them in different ways. 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 2004200520062007200820092010201120122013201420152016201720182019 Y SA Volume XXI Issue IV Version I 21 ( E ) Global Journal of Human Social Science - Year 2021 © 2021 Global Journals importance of GBER is growing with a relative share of 76% out of all aid measures, representing over 97% of the new implemented ones. MSs spent on average around 46% of the total spending on GBER measures, an increase of more than 10% compared to 2013 when the so-called new GBER – fitted to the seven-year programming period between 2014 and 2020 – was introduced. In terms of the absolute amounts, the difference is more spectacular with a value of around 500 times higher from EUR 104 million (Cyprus, 0.47% of GDP) to EUR 53 billion (Germany, 1.54% of GDP), overall EUR 95.5 billion in 2019. It is Malta, Latvia and Hungary where the highest the GDP proportionate State aid spending can be observed on average with the values of 1.8%, 1.57% and 1.48%, respectively. Figure 2: GDP growth rate (Y, axis y1) and State aid expenditure in percentage of GDP (SA, axis y2) between 2004 and 2019 in the EU State Aid in the European Union: Where Law and Economics Meet