Ex-post evaluation of the impact of restructuring aid decisions on the viability of aided (non-financial) firms.

Financial distress at the company level plays a signalling role in an economy, indicating that a firm is not making optimal use of its resources. While financial distress and consequent market exit play a key role in ensuring an efficient allocation of resources, they can have negative economic consequences. The European Commission has allowed state aid to firms in difficulty. This aid can only be given under strict conditions, set out in guidelines on state aid for rescuing and restructuring firms in difficulty. The overall objective of the EU policy is to contribute to successful restructuring of firms and their return to viability. This study has the overall objective of evaluating the Commission's ex-ante assessment of restructuring plans submitted by the member countries. Particular focus is given to investigating whether support was provided only in the context of a restructuring plan that was likely to return the firms to long-term viability within a reasonable period of time. The evaluation is based on the analysis of 12 evaluation questions – providing first a descriptive assessment followed by detailed analysis of effectiveness and efficiency.