Before the pandemic, Italy’s repeated bank rescues raised hackles, while the US and Europe have feuded for decades over support for rival planemakers Boeing Co and Airbus SE.
IN theory, the system of free trade driving the world economy is supposed to provide a “level playing field” for all. In practice, countries have long complained that rivals unfairly dish out aid in the form of state-backed subsidies to boost favoured companies -- often as they themselves do the same.
The United State has been a vocal critic of European subsidies, notably aircraft financing, and has been focusing its attention increasingly on China’s backing for its companies; in turn the European Union is trying to protect itself against foreign subsidies. Now that the pandemic has forced governments to mount huge rescue efforts for their economies, the fragile set of rules that aim to keep state support in check is under threat.
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