This chapter presents a general theory on the compatibility of State aid, considering the relation between general and sectoral regulation and State aid control. State aid control is one of the most important powers of the Commission. The origins of the prohibition of subsidies can be found in Chapter IV, Section C of the Havana Charter for an International Trade Organization of 1947. Due to the lack of ratification by the US Congress, that Charter was abandoned in 1950 and never entered into force. However, the Treaty on European Coal and Steel Community (ECSC) drew a lot of inspiration from the Havana Charter, and established, amongst others, a general prohibition on subsidies or State assistance (Article 4 ECSC). The Spaak report proposed to extend that prohibition to all sectors of the economy. At the same time, it foresaw the possibility to exceptionally authorize State aid, and proposed to confer the power of authorization to the Commission.
