de Beys, Julien <br/><br/>
Restructuring and State Aid Monitoring 

 -  2008.<br/>							 
<br/><br/> 71 
<br/><br/> This paper deals with the issue of the influence European state aid law has over the phenomenon of restructuring observed in the European Community. The paper identifies two potential links between this law and restructuring in the European Community. The first link follows from the rules set by the European Commission for the granting of restructuring aid to companies in difficulties. The second results from the availability of regional aid, which is framed by the conditions laid down by the European Commission. Following an examination of these two fields, the paper makes two proposals for the innovative management of restructuring in Europe. Three types of restructuring are distinguished: opportunistic restructuring, rationalized restructuring, and restructuring through mergers and acquisitions. First, opportunistic restructuring consists of a company moving to a location offering lower labor costs or benefiting from an attractive fiscal regime. Second, rationalized restructuring aims to create a new organization out of an existing one to modernize it or lower its costs (this is restructuring in the strict sense). Third, restructuring through mergers and acquisitions implies a change in the legal situation of at least one company, at the level of the identity of its owners or in the exercise of its control. As regards restructuring aid, it can be observed that this of form aid does not favor opportunistic restructuring. However, it undeniably influences rationalized restructuring and to a lesser extent restructuring through mergers and acquisitions. By nature, the Commission's control over restructuring aid leads to rationalized restructuring because rationalization is a condition for receiving public aid. This influence seems positive because this control makes the restructuring credible. Through the link between aid and a well-elaborated plan, the prohibition of more than one intervention per decade, and the imposition of a substantial contribution by the beneficiary, the Commission aims for a return to long-term profitability. The application of the guidelines also leads to restructuring by mergers and acquisitions. As a result, the beneficiary company must usually cede some of its activities to others companies, a process known as “compensatory measures.” This is beneficial overall because as a result, it is possible to claim that opportunistic restructuring has been avoided since a company does not have to profit from emerging from insolvency in order to receive public financial support. As regards regional aid, it can be argued that the assumption according to which it favors opportunistic restructuring is not verified. If this form of aid exerts an influence over the location of new investments, the application of strict proportionality in allocating aid to companies in difficulty prevents them from seeing an advantage in relocation. In addition, it seems positive from an EU point of view because companies planning a ”mobile” investment, i.e., one that is executable in principle in a large number of countries, may be tempted to locate this investment inside rather than outside the EU. On the other hand, taking account of the fact that the EU's definition of an investment also includes the diversification of the output of an enterprise or a fundamental change in the overall production process, it is normal for regional aids to favor rationalized restructuring. Finally, no clear link is apparent between regional aid and mergers and acquisition restructuring.