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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.

Must the Commission Prohibit State Aid That Harms the Environment? journal article

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

Covid-19 and the State Aid Regimes Established by the Western Balkan Countries journal article

Anduena Gjevori

European State Aid Law Quarterly, Volume 22 (2023), Issue 2, Page 161 - 174

Since the adoption of the first State aid law by North Macedonia, the Western Balkan (WB) countries have shown – to a certain degree – the willpower to approximate the laws adopted in the field of State aid with the EU State aid acquis. However, the first State aid commissions closely linked to the Ministry of Finance or the Ministry of Economy had an essential weakness in their institutional structure. This article aims to establish a connection between the chosen types of State aid regulators in the WB and their operability during the transposition and enforcement of the Temporary Framework for Covid-19 outbreak. In this framework, the article examines the transposition of the Temporary Framework of March 2020 into the national legislations of the WB countries. Moreover, it analyses selected decisions granting Covid-19 State aid, comparing them with the Temporary Framework. Only two out of six countries of the WB, under analysis, (partially) transposed the Temporary Framework. The Covid-19 State aid has been mostly retroactively approved and has, in some cases, been implemented without being assessed by the relevant State aid authorities. Even in the few cases that have been notified, Covid-19 State aid has been granted in contradiction with the Temporary Framework. Additionally, the few decisions imposing conditions for Covid-19 State aid have not been implemented by the appropriate public authorities. Keywords: EU candidate countries; State aid monitoring authorities; Temporary Framework; Covid-19

The EU Green Deal Industrial Plan: journal article

Did the EU Just Avert a Revolution in State Aid Law?

Valentine Lemonnier

European State Aid Law Quarterly, Volume 22 (2023), Issue 2, Page 123 - 131

On 1 February 2023, the President of the European Commission Ursula von der Leyen presented the Green Deal Industrial Plan for the Net-Zero Age. With this plan, the European Commission aims to enhance the competitiveness of Europe’s net-zero industry and, simultaneously, support the fast transition to climate neutrality. The plan lays out several reform proposals. A reform of EU State aid rules was also put on the table. On 9 March 2023, the European Commission adopted the new Temporary Crisis and Transition Framework (TCTF), as well as the reform of the General Block Exemption Regulation (GBER). This article provides an overview of the background and outcome of the latest State aid reform, with a particular focus on the TCTF. Keywords: Green Deal Industrial Plan; Temporary Crisis and Transition Framework (TCTF); Temporary Crisis Framework (TCF); EU Green Deal; Inflation Reduction Act (IRA)

The Legitimacy of EU Soft Law: journal article

Still Nothing New or a Turn for The Worse in the Field of State Aid?

Verena Rošic Feguš

European State Aid Law Quarterly, Volume 21 (2022), Issue 1, Page 54 - 64

This article takes issue with the State aid soft law and its questionable legitimacy, transparency and compatibility with the rule of law. Although critics in this regard are almost ‘traditional’, the practice of adoption of EU soft law does not imply a conclusion that something is changing in this regard. What is more, the dimensions of the current pandemic seem to emphasize them. Recognising advantages of soft law and the existence of wide discretion of the European Commission this paper looks at the current state of affairs regarding EU soft law in EU State aid regime (and briefly also other EU policies), determines the gap between EU soft law and the rule of law and presupposes solutions that would improve EU soft law’s quality in the European integration. Keywords: legitimacy; EU soft law; soft law; rule of law; democratic safeguards; COVID-19 soft law

Fostering Tech Sovereignty with a Level Playing Field on State Aid and Foreign Subsidies journal article

Andreas Haak, Barbara Thiemann

European State Aid Law Quarterly, Volume 21 (2022), Issue 1, Page 20 - 30

In her 2021 State of the European Union Address, European Commission President Ursula von der Leyen stressed ‘the importance of investing in our European tech sovereignty’ and continued by appealing that ‘[w]e have to double down to shape our digital transformation according to our own rules’. Availability of semiconductors (also referred to as microchips or simply as chips) is essential for industry and national security alike. Without microchips there is no tech sovereignty. Given the currently fragile state of global supply chains, expanding fabrication capacity within the EU is high on the political agenda. At the same time, ensuring fair competition is of paramount importance. While tech sovereignty must be matched by sufficient State funding, it still needs to be awarded in compliance with EU State aid rules. These rules must not work as an impediment to tech sovereignty. Furthermore, the rules of the game must be the same for everyone. This regulatory objective is most evident in the draft Distortive Foreign Subsidies Regulation. Keywords: twin transition; ICPEI; supply chain; sovereignty; EU Chips Act; foreign subsidies

Magnetrol v Commission: When Do Advance Tax Rulings Become an Aid Scheme under Article 1(d) Regulation (EU) 2015/1589 · Case C-337/19 P Magnetrol v Commission · Annotation by Benedikt Freund and Moritz Seiler journal article

Annotation on the Judgment of the Court (Fourth Chamber) of 16 September 2021 in Case C-337/19 P Commission v Belgium and Magnetrol

Benedikt Freund, Moritz Seiler

European State Aid Law Quarterly, Volume 21 (2022), Issue 3, Page 302 - 309

In its decision of 14 February 2019, the General Court declared that the Commission had wrongly classified the Belgian ‘excess profit exemption system’ as an aid scheme according to Article 1(d) of Regulation 2015/1589. Allowing the Commission’s appeal, the Court of Justice found that the concept of an aid scheme according to Article 1(d) of Regulation (EU) 2015/1589 also encompassed a consistent administrative practice of a Member State tax authority. As a result, even where a Member State’s tax legislation itself is in compliance with State aid rules, the Commission is now in a position to establish the existence of an aid scheme, rather than having to prosecute every case individually, if a Member State tax authority has issued a significant number of (advance) tax rulings that deviate from its compliant legislation. After a series of mixed results in tax-related State aid cases, Magnetrol represents an important win for the Commission. We anticipate that its impact will be most pronounced in Member States where a single central authority is in charge of issuing tax rulings and tax collection (centralised model of tax administration).