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State Aid Assessment of Complex Settlement Agreements: journal article

The European Commission’s Opening Decision in the German Lignite Phase-Out Case

Christian Koenig, Carlos Deniz Cesarano

European State Aid Law Quarterly, Volume 20 (2021), Issue 4, Page 560 - 571

The European Green Deal envisages a clean and decarbonised energy sector with net-zero greenhouse gas emissions by 2050. These ambitious objectives entrust the Member States with enormous tasks in connection with the transformation process, which must always be designed in a proportionate manner. For this purpose, compensation measures are regularly part of decarbonisation strategies. In the context of the German lignite phase-out, new legal challenges arise due to State aid law. In particular, the present case poses the question of how elements of settlement agreements are to be assessed under State aid law. This field currently seems to be almost unexplored, as the Commission’s notice on the notion of State aid only refers to settlement agreements in connection with tax law. However, settlement agreements contain some important elements that should be properly taken into account by the Commission in its State aid assessment. The fact that settlement agreements serve to avoid legal and factual uncertainties, especially in the context of highly complex decarbonisation strategies, must play a decisive role in an all-embracing economic analysis.

The SURE Initiative, Short-time Work Compensation, and State Aid journal article

Hans Arno Petzold

European State Aid Law Quarterly, Volume 19 (2020), Issue 2, Page 161 - 164

The European Commission has put forward a proposal for a Council regulation aimed at ‘temporary Support to mitigate Unemployment Risks in an Emergency (SURE) following the COVID-19 outbreak’. This is not the place to discuss political or financial implications of the idea of a Basic European Unemployment Insurance. But it gives the opportunity to have a look at options for short-time work compensation, based on a case study of the German model, and the State aid relevance of such compensation. Keywords: COVID-19, SURE Initiative, short-time work Ccmpensation, State aid, selectivity, Germany

New Tasks for Industrial Policy in Germany journal article

Hubertus Bardt

European State Aid Law Quarterly, Volume 19 (2020), Issue 4, Page 430 - 439

State intervention in market processes has always been controversial within the European Union and its Member States. Since the beginning, industrial policy in Germany and the EU has been a mixture of vertical and horizontal instruments with a focus on horizontal approaches. State aid control has led to a more rule-based use of this instrument. Subsidies related to industrial policy have been significantly reduced in the last 20 years and play only a minor role for European countries. However, transformative developments with potential disruptive effects may now require a more active approach to industrial policy, where State aid can play a greater role. Climate change and the necessity to finance low-carbon production capacities that are not competitive on international markets can justify financial assistance. At the same time, trade conflicts with China are at least partly caused by uncontrolled State aid in the State-capitalist Chinese economic system. An international agreement on State aid rules would be a better solution than continuous trade distortions or countermeasures in form of additional European subsidies. Finally, the Covid-19 crisis has triggered additional public funds for private companies. While short-term rescue measures and medium-term investment programmes are important, a return to lower pre-crisis level of State aid and government intervention into market processes cannot be taken for granted. Keywords: industrial policy; transformation; economic crisis; Germany; China

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