Phedon Nicolaides

European State Aid Law Quarterly, Volume 22 (2023), Issue 1, Page 17 - 28

This article investigates the compatibility with the internal market of State aid that may directly or indirectly harm the environment and climate. It examines the case law on State aid and compliance with Article 107(3) TFEU and concludes that the Court of Justice has not laid down any general obligation for the European Commission to prohibit any State aid measure that may have a harmful effect. The European Commission is only required to prohibit aid whose objective is inextricably linked to a contravention of EU environmental law. Keywords: environmental protection; green transition; Article 107(3)(c); inextricable contravention of EU law

Tamás Kende, Gábor Puskás

European State Aid Law Quarterly, Volume 22 (2023), Issue 2, Page 205 - 211

Article 107(3)(c) TFEU requires a delicate balancing of the positive effects of the aid aiming the development of certain economic activities and the negative effects thereof. The Paks II judgment provides clarifications as to the limits of this balancing process and the European Commission’s obligations to take into account primary and secondary EU laws other than those related to State aid, as well as fundamental goals of the EU Treaties like the protection of environment. The Paks II judgment also confirms that State aid rules are also applicable concerning activities falling under the EURATOM Treaty and clarifies the relationship between State aid and public procurement and an infringement procedure and a State aid procedure. The Paks II judgment also shows that Member States have a hard time with challenging the Commission’s State aid decisions if they rely on an alleged err in law or they attack the Commission’s discretionary powers and the proper application thereof.

Cees Dekker

European State Aid Law Quarterly, Volume 22 (2023), Issue 2, Page 193 - 198

It is settled case law that the Commission may adopt guidelines and notices setting out how it will exercise its discretion under the State aid rules. These guidelines and notices limit the way in which the Commission exercises its powers. In the present case, the Court of Justice also assumes that role in relation to the Commission's Guarantee Notice. However, unlike other cases in which the Union Courts have ruled on the role of the Guidelines, which concerned the Commission's application of Article 107(3) TFEU, the present case concerns the application of Article 107(1) TFEU. It is also settled case law that the Commission does not have a wide margin of discretion in the application of Article 107(1) TFEU, as the concept of aid is legal in nature. The question is, therefore, whether the Commission can impose restrictions on itself in its assessment under Article 107(1) TFEU. The Court of Justice ignores this question.

Phedon Nicolaides

European State Aid Law Quarterly, Volume 21 (2022), Issue 1, Page 31 - 42

This article reviews the evolving case law on Article 107(3)(b) TFEU. It is now established that State aid must be appropriate, necessary and proportional. However, this article finds that it is still not clear in the case law how they are to be applied in conjunction with each other. Several judgments of the General Court delivered in 2021 also indicate that the principle of proportionality can refer to both the amount of aid as well as to the scope of the aid measure. The 2021 judgments of the General Court represent a departure from previous case law in so far as they dispense with any assessment of the impact of State aid on trade and competition. Since aid on the basis of Article 107(3)(b) aims to remedy a serious economic disturbance, it is also presumed to be in the interest of all Member States. Pending cases before the Court of Justice may still reverse this new interpretation of the application of Article 107(3)(b). Keywords: Article 107(3)(b); appropriateness; necessity; proportionality; common European interest

Phedon Nicolaides

European State Aid Law Quarterly, Volume 20 (2021), Issue 1, Page 4 - 14

The article argues that the judgment of the Court of Justice in case C-594/18 P Austria v Commission, which appeared to limit the criteria that the Commission uses to determine the compatibility of State aid, may have a positive impact on State aid control if it makes the assessment of the Commission more transparent. There is a need for greater transparency in the ‘weighing’ of the positive and negative effects of State aid and the ‘balancing’ of those effects. The weighing and balancing of the effects of State aid are not easy tasks. But it will be necessary for the Commission to be more explicit about the model it relies on to conclude that aid is compatible or not. Keywords: Article 107(3)(c) TFEU; compatibility with internal market; common interest; affectation of trade; distortion of competition; Hinkley Point C

Phedon Nicolaides

European State Aid Law Quarterly, Volume 20 (2021), Issue 3, Page 384 - 396

Challenges by Ryanair to Commission decisions that authorised Covid-19 related State aid have brought to the fore the important issue of discrimination in both individual aid measures and aid schemes. All State aid is to a certain extent discriminatory because it selectively favours certain undertakings over others which are in comparable situations. The question is how much discrimination is allowed under Article 107(2) and (3) TFEU, especially when Member States limit the number of eligible undertakings. The General Court has ruled that Member States are not obliged to grant State aid to any or all companies. They may limit the circle of beneficiaries. However, Member States may only grant aid that is appropriate for the objective it aims to achieve, necessary and proportionate for that purpose. This article argues that limiting the aid according to the extent of the links of the beneficiaries to the local economy appears to be a good proxy for the effectiveness of the aid, but it may also be disproportionately discriminatory because such links do not necessarily ensure that the beneficiaries actually contribute more to the local economy than non-beneficiaries or that they actually need the aid more than non-beneficiaries. Appropriately designed aid measures can reduce the degree of discrimination, by applying consistently and systematically objectively justified criteria, without compromising the effectiveness of the aid or forcing Member States to grant more aid than they can afford. The recent Court cases have exposed the hitherto unidentified conflict between the discretion of Member States to grant State aid only to a single or a few undertakings and the need to avoid disproportionate discrimination. Keywords: Article 107(2)(b); Article 107(3)(b); discrimination; proportionality; establishment; links with local economy.