State aid in the European Union is the name given to a subsidy or any other aid provided by a government that distorts competitions. Under European Union competition law the term has a legal meaning, being any measure that demonstrates any of the characteristics in Article 107 of Treaty on the Functioning of the European Union, in that if it distorts competition or the free market, it is classed by the European Union as being illegal state aid. Measures which fall within the definition of state aid are considered unlawful unless provided under an exemption or notified by the European Commission. In 2019, the EU member states provided state aid corresponding to 0.81% of the bloc's GDP. EU policy on state aid The Treaty on the Functioning of the European Union (Art. 107, para. 1) reads: "Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market." This sets out the characteristics of a "State aid" and states that the award of a State aid will be unlawful unless compatible with the common market, which is achieved either by applying a block exemption or notification. Five cumulative criteria shall be present for a "State aid" to exist: "the use of state resources" "the measure must confer an advantage to a certain undertaking" "the advantage must be selective" "the measure must distort competition" "affect trade between member states". Almost all state aid is awarded under block exemptions. For example, 96% of State aid is awarded under the General Block Exemption Regulation. States can award state aid via notification of the European Commission DG Competition, under guidelines such as the Regional Aid Guidelines (RAG), the Climate, Energy and Environmental Aid Guidelines (CEEAG), the Risk Finance Guidelines (RFG), and the Research, Development & Innovation Framework (RDI),. History State aid was formally introduced into European Union statute law by the Treaty of Rome, which classified state aid as being any state intervention that distorted competition law. The definition was later updated by the Treaty on the Functioning of the European Union in 2007. It stated that any aid given to a company by a state within the EU would