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When State Aid Goes Wrong: journal article

Member State’s Liability Towards the Aid Beneficiary – A Belgian Case Study

Julie Leroy

European State Aid Law Quarterly, Volume 21 (2022), Issue 4, Page 384 - 396

A Member State which violates the standstill-obligation under Article 108(3) TFEU is not directly held responsible for his failure to comply with his obligations under EU law, as it is the aid beneficiary who will be obliged to repay the unlawful (and incompatible) State aid. This contribution evaluates if the aid beneficiary can nevertheless hold the Member State somehow responsible, through a damage claim based on the latter’s extra-contractual liability for the violation of EU law. The Belgian case study shows that such a claim can be successful, as the conditions of Articles 1382-1383 Old Civil Code might be fulfilled. However, the aid beneficiary is in a difficult position. One the one hand, this undertaking bears the ‘risk of proof’. On the other hand, a full compensation will be rare as, amongst others, the aid beneficiary’s own fault might lead to a liability apportionment. Finally, the obligation to repay the unlawful State aid (with interest) as such will never qualify as a damage that is eligible for a compensation, as this would undermine the effectiveness of EU law. Keywords: Article 108(3) TFEU; standstill-obligation; recovery of unlawful (and incompatible) State aid; liability of Member States; Belgium


2ND ESTAL PHD AWARD NOMINATIONS ∙ Recovery of Unlawful Fiscal State Aid in Belgium journal article

Julie Leroy

European State Aid Law Quarterly, Volume 20 (2021), Issue 3, Page 325 - 336

This article, like my PhD thesis on which it is based, focuses on the recovery of unlawful fiscal State aid in Belgium. Currently, Belgium has no general legal framework for recovery procedures: neither for non-fiscal, nor for fiscal State aid. To the contrary, for the recovery of fiscal State aid, ad hoc-legislation was adopted in the past. On the one hand, the research evaluates if there is a need for a new legal framework for the recovery of unlawful fiscal State aid in Belgium, in the execution of a recovery decision from the European Commission. In order to make this evaluation, the existing ‘tax law route’ and ‘civil law route’ for fiscal recovery procedures are charted. Those routes are tested against ten evaluation criteria, which are deducted from EU law and national law. This evaluation clearly shows that there is a need for a new legal framework for the recovery of unlawful fiscal State aid in Belgium. Consequently, on the other hand, this research makes recommendations regarding the content and design of the new proposed framework. It is, amongst others, recommended to adopt general legislation that applies to all future fiscal recovery procedures in Belgium. Despite its focus on Belgium, several aspects of the research are also interesting for other EU Member States. Keywords: EStAL PhD Award; PhD research; recovery of unlawful (fiscal) State aid; Belgium; current framework; recommendations for new framework.


United Textiles: A Missed Opportunity  ∙ Case C-363/16 European Commission v Greece ∙ Annotation  by Wout De Cock and Julie Leroy journal article

Annotation on the Judgment of the Court of Justice of the European Union (First Chamber) of 17 January 2018 in Case C-363/16 European Commission v Greece

Wout De Cock, Julie Leroy

European State Aid Law Quarterly, Volume 17 (2018), Issue 2, Page 298 - 304

It is well established that the financial situation of an (insolvent) aid beneficiary does not lead, in principle, to an absolute impossibility to recover unlawful and incompatible State aid. In the annotated case, a Member State argued that it should be entitled to suspend the insolvency proceedings in order to examine the possible relaunch of the insolvent beneficiary’s activities. In this annotation, we discuss the findings of the European Court of Justice with regard to this question and argue that the Court’s findings remain vague and unclear. Furthermore, we discuss the relevant date to assess the failure to recover aid from an insolvent beneficiary and the duty of loyal cooperation between Member States and the Commission. In general, it is argued that the judgment is, in contrast to (parts of) the Opinion of the Advocate General, a mere confirmation of former case law and somewhat disappointing.Keywords: Recovery of unlawful State aid; Financial situation (insolvent) beneficiary; Possibility to suspend recovery proceedings and relaunch activities - Article 108(2)(2) TFEU; Date for assessing failure to recover; Duty of loyal cooperation

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