The relevance of the research topic is based on a need to establish mechanisms of state aid to undertakings, which should promote achieving objectives of economic policy and be in line with international obligations of the state.
It was justified, that assessment of the mutual impact of processes of international economic integration and public intervention to support economic activity should include the following aspects: evaluation of the impact on international integration, trade, and investment; assessment of compatibility with international law norms, international obligations of the state, which should secure the integration processes; positions of national business and foreign investors.
The terms “public support”, “state aid”, “subsidy” were analyzed by criteria of executing particular functions by the state, of impact on the beneficiary’s behavior, of selectivity, or impact on competition.
It was demonstrated, that the EU state aid rules fulfill the special role as a key common element in the supranational mechanism of support to economic activity from the EU budget and the national mechanisms of state aid to undertakings in the EU member states.
Based on the experience of the EU and its member states, it is established that the application of EU state aid rules at the national level modifies support schemes and measures, by improving them to ensure efficiency and effectiveness.
It was found that in countries that are members of the World Trade Organization and do not belong to high-level integration associations, various measures of state support are actively applied in the form of special economic zones and their varieties (export zones, industrial zones, etc.), tax benefits, grants, etc. At the same time, the provision of support is characterized by high requirements for efficiency and effectiveness.
The content of Ukraine’s international obligations to implement EU state aid rules was analysed. It is established that, due to the selective implementation of EU law and the inconsistency of the base Law of Ukraine “On State Aid to Undertakings” with the Association Agreement between Ukraine and the EU, no expected transformational impact on state aid mechanisms took place.
Theoretical and applied bases of formation of the complex structure of state aid mechanisms are substantiated, which envisage the application of developments in industrial policy, investment policy, and international standards and practices.
A holistic approach to improving the following mechanisms of state aid to undertakings is proposed: an organizational, legal, mechanism for providing, evaluation, and adjustment, as well as a mechanism for monitoring the impact on competition and trade. As part of the improvement of the organizational mechanism, it is proposed to: change the structure of advisory bodies under the Cabinet of Ministers of Ukraine; clarify the functions of the relevant Deputy Prime Minister and the Ministry of Strategic Sectors or establish a separate government body; introduce an analysis of the impact of the planned state intervention on trade with the EU and competition; use theoretical principles of state intervention, domestic and internationally recognized priorities of state aid, positions of stakeholders to determine priorities of aid or support.
To improve the legal mechanism, a necessity of using the provisions of the EU-Ukraine Association Agreement in full is justified, as well as of introducing a number of amendments to the Law of Ukraine “On State Aid to Undertakings” to assess properly the impact of state aid on trade with the EU and removing obstacles to applying the EU rules. Implementation of these proposals, accordingly, will enable the full functioning of the control mechanism on the impact on competition and trade.
In order to improve the mechanism for providing, evaluating, and adjusting state aid, the need to integrate the goals and objectives of state aid policy with sectoral policies has been demonstrated, and it is proposed to make full use of aid instruments allowed under international approaches and norms. In addition, it is proposed to use indicators of effectiveness, efficiency, and quality to evaluate state aid schemes and measures.
Keywords: state aid to undertakings, legal and organizational mechanisms of state aid, modernization of state aid mechanisms, international economic integration, public intervention in economic activity, public support, subsidies to undertakings, rules of the European Union in the field of state aid to undertakings, promotion of the development of small and medium enterprises, industrial policy.
