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Joined Cases C-73/22 P and C-77/22 P Grupa Azoty S.A. and Others v Commission · Annotation by Jakub Kociubiński journal article

Annotation on Judgment of the Court (Fourth Chamber) of 13 July 2023 in Joined Cases C-73/22 P and C-77/22 P Grupa Azoty S.A. and Others v Commission

Jakub Kociubiński

European State Aid Law Quarterly, Volume 23 (2024), Issue 1, Page 69 - 74

The annotated case concerns an unsuccessful attempt to challenge the Annex to the guidelines, comprising a catalogue of industries eligible for receiving State aid due to the risk of carbon leakage. The appellants’ operations were not included in this list. In its judgment, the Court ruled on the two main pleas: inadequate statement of reasons and error in not considering the applicants as interested parties in a situation where, although no individual Commission’s decision has been issued based on the guidelines yet, the fact of not being included in the Annex prevents them from receiving State aid. The commentary delves into the appellants’ line of reasoning, explaining the attempt to ‘force-fit’ arguments concerning the infringement of law into an issue that falls within the realm of policy. Moreover, the analysis assesses a potential opening left by the Court: challenging individual decisions that authorise aid for other undertakings, evaluating its viability in the context of the most recent developments in case law.

The EU Economic Security Strategy: a Novel Approach or the Re-emergence of an Old Idea? journal article

Alexandros Lymperopoulos

European State Aid Law Quarterly, Volume 23 (2024), Issue 1, Page 40 - 55

The economic security strategy that the EU has recently introduced signals a turn in EU trade policy. Once a zealous advocate of free trade, the EU has now decided to adopt a ‘yes, but’ approach in its trade relations. This paper argues that the new strategy has been influenced to a degree by the trade suggestions of the 2019 Franco-German Manifesto for a European industrial policy. This paper also analyses the proposed tools of the new strategy and discusses their efficacy. It argues that economic security is distinct from, yet related to, industrial policy and explains why and how State aid law and merger control have a role to play in achieving economic security. The following analysis highlights that EU State aid law is aware of and responsive to international subsidies and seems aligned with economic security considerations. Regarding competition law, however, the European Commission has yet to understand the potential contribution of merger control in pursuing economic security and is hesitant to include it in the toolkit of the economic security strategy. That being said, aligning State aid and merger control with economic security is not without contradictions or risks. Keywords: Economic Security; EU Trade Policy; Competition Law; Franco-German Manifesto For A European Industrial Policy.

How Much Could the US Inflation Reduction Act Cost Europe? journal article

Eszter Hargita, Filip Puzder, Péter Staviczky

European State Aid Law Quarterly, Volume 22 (2023), Issue 3, Page 242 - 266

The Inflation Reduction Act (IRA) was introduced in the US in August 2022, aiming to promote investments into clean energy production. The IRA provides huge amount of aid, which can have a draining effect of green investments vital for the green transition of the European economy. In response, the Commission adopted Temporary Crisis and Transition Framework (TCTF) in March 2023. As well as explaining the historical context and content of these subsidy-rules, this article makes an attempt to compare the subsidies available under the IRA and the TCTF, considering the maximum aid amount available under the regional aid guidelines. Keywords: Inflation Reduction Act; IRA; subsidy competition; incentive effect; operating aid; battery manufacturing; tax credit

Unlocking Economic Potential: journal article

A Comprehensive Analysis of Regional Investment Aid Policy in Slovakia

Tomáš Malatinec, Zuzana Palkechová, Zuzana Šutová

European State Aid Law Quarterly, Volume 22 (2023), Issue 3, Page 276 - 289

State aid, which encompasses regional investment aid, is a complex and multifaceted field, and it attracts experts from a number of disciplines, who seek to explore its intricate dynamics, regulatory frameworks, and impacts on market competition, innovation, and regional development. This paper provides a comprehensive overview of approved regional investment aid in Slovakia. The study draws on a unique dataset covering the period January 2018 to August 2023, sourced from the Ministry of Economy of the SR. During the monitored period, decisions or amendments to decision on regional investment aid in the amount of 213.317.603 € was issued in Slovakia. In the analysed sample, investment projects up to 50 mil. € predominate. The results indicate that during the observed period, the highest amount of regional investment aid was approved in Košice and Prešov regions (East Slovakia) which exhibit significant economic disparities compared to more prosperous areas within the country. From the comparison of various forms of regional investment aid, it is evident that in all eligible regions the highest amount was approved in the category of tax relief. The duration of the administrative procedure for approving regional investment applications decreased during the observed period. This paper also considers the pivotal role of evaluations of regional investment aid. Periodic evaluations serve as a barometer of policy performance and effectiveness. Keywords: investment incentives; regional investment aid; competition; regional disparities

Legal Basis of the Proposal for a Regulation on Foreign Subsidies Distorting the Internal Market journal article

Justyna Smela Wolski

European State Aid Law Quarterly, Volume 21 (2022), Issue 2, Page 153 - 172

This article explores the possible legal bases of the Proposal for a Regulation on Foreign Subsidies, which, at first glance, displays elements of competition, internal market, and common commercial policy. It is argued, in particular, that the Proposal does not fulfil the requirements regarding the use of Article 114 TFEU established in the Court’s case law despite its self-proclaimed goal of removing ‘distortions within the internal market’. Firstly, it is disputed that foreign subsidies can fall within the scope of a Member State’s competence. Secondly, even if the former reasoning were proved to be wrong, it is difficult to hold that the goal of the Regulation is to harmonize in order to prevent future obstacles to trade between Member States. In any case, should a general basis be needed due to the effects of the Regulation on the internal market, Article 352 TFEU would be a more plausible option, insofar as it applies to non-harmonisable areas and to the creation of new legal forms, such as foreign subsidies, which are at the crossroads of the notion of State aid of Article 107 TFEU and the notion of subsidy of the Anti-Subsidy Regulation. Nevertheless, it is concluded that the entirety of the Proposal could be based on Article 207 TFEU if a teleological and wide interpretation of the common commercial policy, such as that of Opinion 1/78, is followed. Notably, it is argued that the restoration of effective competition within the internal market is not a goal in itself, but rather a consequence of remediating undesirable trade-related behaviours of third countries. Finally, the role that the Regulation, if adopted, will play in Moldova and Ukraine is studied. Keywords: foreign subsidies; common commercial policy; trade; competition; internal market; legal basis

Shedding Light into the ‘Black Box’ of State Aid: journal article

The Impact of Hinkley Point C on the Assessment of the Compatibility of State Aid

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

Regulating State Aid in the Member States journal article

Karsten Naundrup Olesen, Caroline Heide-Jørgensen

European State Aid Law Quarterly, Volume 20 (2021), Issue 1, Page 51 - 60

State aid poses a threat to both the functioning of the EU internal market and to the national markets of each Member State. While Article 107 TFEU safeguards the internal market, Member States still need their own national regulation to protect competition at the national level. This article describes how individual Member States can meet the challenge of such regulation alongside EU State aid law. As a case study, we present the Danish approach. Denmark has developed a three-stringed approach that comprise 1) EU regulation, 2) the Danish Competition Act, and 3) additional codified and non-codified regulation with a more comprehensive scope than that of simply ensuring competition. Issues that need special consideration, including balancing competition against other public interests, are analysed and the effectiveness of this way of dealing with the question of State aid is considered. Keywords: multi-stringed regulation; national competition; effectiveness of regulation