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An objective of the European Union's Banking Union is to prevent Member States from having to subsidise banks. The Single Resolution Mechanism may have limited but has not eliminated state aid to banks. This is shown by the relevant statistics, the number of positive Commission decisions and the provisions of the Single Resolution Mechanism Regulation. State aid is allowed in three situations: when a bank is resolved, when it is liquidated and when it is solvent but needs temporary liquidity or more capital. This article identifies a difference between the European Commission and the Single Resolution Board in the interpretation of the concept of "public interest". The article further argues that this difference may not contradict the objectives of the Banking Union if state aid is still necessary to prevent damage to regional economies.

IN THE 1990'S, TRADE RELATIONS WILL BE CHARACTERIZED BY A PARADOX: THE REMOVAL OF TRADE BARRIERS WILL BE ACCOMPANIED BY GROWING FRICTION AND MORE COMMERCIAL DISPUTES. THIS WILL BE THE INEVITABLE CONSEQUENCE OF THE LACK OF APPROPRIATE INTERNATIONAL INSTITUTIONS AND NORMS IN AN AGE OF INCREASING ECONOMIC INTEGRATION. ONE CAUSE OF COMMERCIAL FRICTION WILL BE THE USE OF INCOMPATIBLE POLICY INSTRUMENTS BY DIFFERENT COUNTRIES FOR THE PURSUIT OF ECONOMIC OBJECTIVES. BOTH THE UNITED STATES AND THE EUROPEAN COMMUNITY CLAIM THAT THEIR TRADE POLICY OBJECTIVE IS TO FACILITATE TRADE BY FORCING OTHER COUNTRIES TO REMOVE IMPEDIMENTS TO LEGITIMATE OR FAIR BUSINESS TRANSACTIONS. REGARDLESS OF HOW DESIRABLE THAT GOAL IS, PURSUING IT WILL ALMOST CERTAINLY RAISE INTERNATIONAL TRADE TENSIONS.

Developing countries have so far been concerned about securing access to the industrial-country markets only for their primary and manufactured products. Despite the relative unimportance of their services, it is in their long-term interests to ensure events such as 'EC 1992' do not frustrate future attempts to establish competitive service exports. (SJK)

SINCE 1985, THE ANNUAL FLOW OF JAPANESE OUTWARD DIRECT INVESTMENT HAS INCREASED BY MORE THAN 500 PERCENT. HEITGER AND STEHN HAVE ARGUED THAT "THE MOST IMPORTANT FACTOR EXPLAINING THE RECENT INCREASE IN JAPANESE DIRECT INVESTMENT IN EUROPE IS THE PRESENT EUROPEAN SYSTEM OF EFFECTIVE PROTECTION, AS WELL AS EXPECTED CHANGES IN THE COURSE OF THE COMPLETION OF THE EUROPEAN INTERNAL MARKET IN 1993." IN THIS PAPER, THE AUTHORS ARGUE THAT PROTECTIONISM IS NEITHER A NECESSARY, NOR A SUFFICIENT, CONDITION FOR DIRECT INVESTMENT. THEY ALSO ARGUE THAT THERE ARE CONCEPTUAL PROBLEMS WITH BOTH THE METHOD AND THE STATISTICS USED BY HEITGER AND STEHN TO ESTABLISH A POSITIVE RELATIONSHIP BETWEEN PROTECTIONISM AND INVESTMENT.

Explains why protectionism is neither a necessary, nor a sufficient condition for direct investment. Argues that there are conceptual problems with both the method and statistics used by Heitger and Stehn to establish a positive relationship between protectionism and investment. (SJK)