The Economics of State Aid for the Rescue and Restructuring of Firms in Difficulty: Theoretical Considerations, Empirical Analysis and Proposals for Reform. Bruges European Economic Research (BEER) Papers 27/September 2013

State aid for rescue and restructuring (R&R) of companies in difficulty causes a significant distortion of competition. It prevents the market from eliminating inefficient companies. Because of this, the European Commission has to be specially strict when it assesses rescue or restructuring aid. This paper examines recent cases of corporate restructuring partly funded with public money. It explains the main aspects of the current guidelines which are applicable to R&R State Aid and establishes a theoretical framework for the economic assessment of R&R aid. It then analyses decisions adopted by the European Commission concerning R&R state aid during the period 2000-2013. It finds that there is little economic rationale in the granting of R&R aid. The paper concludes by applying the lessons drawn from the empirical analysis to the anticipated revision of the R&R guidelines in the context of the State Aid Modernisation process.

Syria and Lebanon: Diverging paths of state unsustainability. MEDPRO Technical Report No. 6/June 2011

Any analysis of the prospects for stability and sustainability in the states of Syria and Lebanon reveals the strong ties that exist between these two countries and the impact of external influences on their overall development. Their trajectories, while starkly divergent in terms of the challenges confronting them at present, converge on a path of long-term unsustainability. Lebanon is in the midst of yet another transition phase, triggered by the collapse of Hariri’s government in January 2011. The current situation might be described as one of deteriorating status quo; the state is performing poorly in terms of its delivery of fundamental public services and its institutional legitimacy is tenuous in the face of emerging para-state structures and latent (occasionally active) violence. In Syria, challenges to the sustainability of the state have evolved dramatically since the beginning of 2011, and are now nearing a tipping point. In view of the mounting unrest and violence in the country, the future prospects for its economic and political development are dim. More ominously, the risk of widespread conflict, with sectarian overtones, cannot be discounted.