Under the state aid rules of the European Union, Member States are generally prevented from granting financial support to undertakings in a way that distorts competition and cross-border trade within the EU. Measures like this may nonetheless be qualified as "compatible with the EU internal market" for several reasons. The study examines how poly-crisis context affects EU state aid policy, in particular the European Commission's approach and practice of authorising aid and, and consequently, the leeway of Member States in taking aid measures.

As of early 2000s, a tendency can be seen in the European Union to grant Member States increasing freedom to make use of derogations and exemptions from the above-mentioned general state aid prohibition. Recent challenges such as the coronavirus crisis and the Russian invasion of Ukrainian may even strengthen this tendency, since state aids may also serve to compensate the negative consequences of economic crises, and the Commission, supported by the Court of Justice of the EU, seems to represent a fairly accommodating attitude towards such national instruments. No wonder that EU 27 Member States spent EUR 334.54 billion on aids in 2021, which represents almost two-and-a-half times the state aid expenditure in 2019.

Despite the fact that state aids are legitimized this way, their economic impact as a form of market intervention are heavily discussed. Depending on the regulatory, political and economic environment where an aid measure is implemented, an intervention like this, besides its potential positive effect, may bring negative outcome from the point of view of market actors (other than the beneficiaries of the aid) or consumers, or even lead to serious distortion of the market. This study aims to highlight the potential consequences of an extensive interpretation of “legitimate state aid” from a critical point of view, evaluating the impact of COVID-19 crises measures, as well as those aiming at balancing the consequences of the ongoing Ukraine war in light of the fundamental objectives of EU competition policy. We argue that the Commission’s crisis-management state aid policy and its consequences on competition in the internal market also have long-term implications for the proper functioning of the European Union’s multi-level governance system.

The research is based on a comparative analysis applying qualitative and quantitative methods including country-specific analysis of two selected Member States. As two similar cases from the same region, Hungary and Poland will be examined, where the economic policy of the country is influenced by strong nationalist and protectionist political ideology represented by the governing party, and therefore these countries serve as appropriate examples to highlight the potential (negative) consequences of a broad interpretation of legitimate state aid. As a sample, state aid measures were selected that had been notified to the European Commission between March 2020 and March 2023 by these two countries as those aiming to compensate the negative economic consequences of the pandemic and the ongoing war in Ukraine. The economic impact of such aids will be measured on the basis of secondary empirical data published in statistics and market assessment studies of the Commission, in particular in its state aid scoreboards of recent years. The indicators of measuring such impact will mainly be defined on the basis of methodologies to measure market competition published by the OECD in 2021.

Since decades, there is an academic discussion on "asymmetries" in national multi-level systems. Asymmetry means that the different units of a level have not necessarily the same rights (Tarlton 1965). In federalism research, it has been assumed that societal and economic diversities (de facto asymmetries) are mirrored in institutional structures (de jure asymmetries), e.g. in autonomous rights and especially in extended legislative competences of some specific regions. The academic discussion focused, inter alia, on the question whether such asymmetric arrangements have an integrative impact on the whole multi-level (the respective region gets a voice and doesn´t exit) or have a disintegrative impact (extended rights come along with the possibility to test autonomy). In times of “differentiated integration” and “BREXIT” the “theoretical speculations” (1965) went on with respect of the EU´s multi-level system, partly with similar arguments (cf. Eppler 2017).

Not only BREXIT also increasing autonomy and secessionist tendencies in regionalised states in Europe have drawn the attention of researchers to asymmetric arrangements in multi-level states. However, these asymmetric arrangements have been almost exclusively assessed in terms of legislative powers, neglecting administrative powers and asymmetries within administrative multi-level systems. The paper addresses this research gap. It provides a theoretical framework of analyses and applies it to the subnational entities of Scotland, Catalonia and South Tyrol as well as their overall states. The results show that multiple asymmetries prevail in the subnational administration of the states examined, resulting from different de facto and de jure asymmetries. In this context, the examined subnational units occupy different special positions.

In theory, it is assumed that intermediate structures are needed to bridge gaps which might be even strengthened by asymmetrical arrangements. The paper also asks whether public administrations might be able to function as a “kit” or “clou” of integration, providing bridged between levels and units of multi-level systems.