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Common Interest as a Condition for State Aid Compatibility journal article

Stig Eidissen

European State Aid Law Quarterly, Volume 19 (2020), Issue 4, Page 452 - 463

According to long-standing Commission practice, State aid must aim at or contribute to an objective of common interest to qualify as compatible with the internal market. In the recent judgment Hinkley Point C, the Court of Justice rejected the pursuit of an objective of common interest as a condition for compatibility pursuant to Article 107(3)(c) TFEU. This article takes a closer look at the origin and content of the common interest condition. Further, it discusses whether the Hinkley judgment establishes a precedent to reject a common interest condition entirely, and the possible consequences of such a precedent for State aid law and policy going forward. Keywords: State aid; compatibility; compensatory justification; common interest; judicial review




Implementation of the Green Deal: journal article

Integrating Environmental Protection Requirements into the Design and Assessment of State Aid

Simone Lünenbürger, Clemens Holtmann, Juliette Delarue

European State Aid Law Quarterly, Volume 19 (2020), Issue 4, Page 418 - 429

The Commission has announced its intention to revise a series of State aid rules (GBER and a number of guidelines) in light of the Green Deal by the end of 2021. At the same time, the Commission is examining how competition policy can be more effective to combat climate change and contribute to the protection of the environment. This article demonstrates that environmental protection requirements can and must be integrated into the definition and implementation of the Union's State aid policy, not only when it comes to environmental aid. Article 11 TFEU provides for a legal obligation on the Commission to integrate environmental protection requirements into the definition and implementation of Union policies, including State aid policy. It is shown how this obligation can be integrated into the traditional assessment scheme, notably under Article 107 (3)(c) TFEU and how it can be broken down into concrete compatibility assessment criteria. Keywords: Green Deal; environmental protection; Article 11 TFEU; State aid policy; guidelines


Brexit, the EEA and the EU State aid Rules journal article open-access

The Future of State aid Control in Turmoil?

Maria Segura, Egill Olafsson, Marianne Clayton

European State Aid Law Quarterly, Volume 18 (2019), Issue 1, Page 3 - 14

One of the many and still unresolved questions raised by the discussions surrounding Brexit is that of its implications on State aid rules. The consequences for the UK and for both the EU and the European Economic Area are still unknown. The options are diverse and still open to much speculation. In this article, we will focus on the EEA model. Because it is not that well-known, the scope of the EEA agreement and the way it functions will firstly be presented. Indeed, some specificities of the EEA framework, amongst which the principle of homogeneity, deserve explanations as a cornerstone for the application of State aid rules within the EU and the EEA. Finally, the actual different options regarding State aid control post-Brexit within the UK, EU and EEA will be discussed. To conclude, attention will be devoted to the concerns regarding the continuation of the EEA Agreement as it stands and the future homogeneous application of State aid rules. Keywords: State aid control; Brexit; Homogeneity principle.


Previous State aid and Subsequent Financial Assistance journal article

The FIH Judgment and the Future of the MEOP

Jan Bonhage

European State Aid Law Quarterly, Volume 18 (2019), Issue 1, Page 29 - 36

Taking into account previous State aid in the MEOP assessment requires an in-depth analysis of the specifics of the individual case. The mere fact that economic interests derive from previous State aid does not rule out their relevance in the assessment of the economic rationality of further financial measures. State aid aims at a comprehensive analysis of all relevant factors at the time of the funding decision. Both the purpose of the MEOP and previous European case law support such comprehensive substantive approach in the MEOP State aid assessment of subsequent financial measures. In light of the rationale of the MEOP and previous decisions, the CJEU’s rather formal approach in the FIH case is not convincing. The comprehensive substantive approach of ING Groep, also concerning the relevance of previous State aid in the assessment of subsequent public measures, more adequately reflects all aspects that a private investor would take into account in a comparable situation. Keywords: FIH; ING Groep; Land Burgenland; MEOP; previous State aid; subsequent financial measures; substantive approach; comprehensive assessment; formal approach; public authority.


PAKS II: State aid for Electricity in Hungary  · State aid Case SA.38454 Hungary Paks II nuclear power station · Annotation by Adina Claici and Norbert Maier journal article

Annotation on European Commission Decision (EU) 2017/2112 of 6 March 2017 on the measure/aid scheme/State aid SA.38454 — 2015/C (ex 2015/N).

Adina Claici, Norbert Maier

European State Aid Law Quarterly, Volume 18 (2019), Issue 1, Page 76 - 83

This article describes a recent State aid case that advances the boundaries in the analysis of the Market Economy Investor Principle beyond the level of complexity reached in previous cases. In 2017 the European Commission approved the aid to Paks II nuclear power station in Hungary following an in-depth investigation. We highlight the most original pieces of economic analysis and financial modelling that contributed to the decision. Among others, the Commission used multiple benchmarking methodologies to estimate the profitability of the investment and the parameters of the financial model. Furthermore, a complex probabilistic model ensured robustness of the results. Finally, we explain the reasoning provided by the Commission when rebutting some of the assumptions put forward by Hungary. Keywords: State aid; MEIP; Nuclear power; Hungary.


The Rise of an (Autonomous) Arm’s Length Principle in EU State Aid Rules? journal article

Fausta Todhe

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 249 - 263

In its recent State aid Decisions, the Commission claimed that an (autonomous) arm’s length principle, independent from the one originating in the OECD framework, is embedded in Article 107(1) TFEU as a tool to ensure the protection of the principle of equality. Considered a novelty, the Commission’s approach has been challenged not only by the appeals submitted from the interested parties but also from a number of practitioners and academics. Although the last words remain still with the Courts, the purpose of this article is to join the debate and bring a personal view on the matter. It therefore reviews the recent State aid Decisions on individual aid in order to determine the potential embedding of an (autonomous) arm’s length principle in European State aid law. Keywords: Fiscal State aid; Arm’s length principle; Tax rulings


Multi-rate Turnover Taxes and State Aid journal article

A Prelude to Taxes on Company Size?

Phedon Nicolaides

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 226 - 238

In order to determine whether a tax measure is selective, it is necessary to determine first the reference tax system. The General Court has recently ruled that the reference system is that which is defined by Member States and includes such components as the tax base, the tax rates, and the various bands of taxable income, profit, or revenue. The Commission may not identify a hypothetical or artificial reference system. The General Court has also ruled that differentiation of tax payers is not necessarily selective as long as it follows from the objective of the system and that the progressivity of tax rates is a form of differentiation that is not necessarily selective. In this connection, progressive tax rates on profit can be justified according to the ability to pay. This article argues, however, that progressive taxes on turnover are unlikely to correspond to ability to pay. It also warns that Member States may be tempted to target company size under the pretext of levying progressive taxation. Keywords: State aid; Turnover; Taxation; Progressive rates; Selectivity


The National Transparency Registers in Action journal article

Katrine Lillerud

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 239 - 248

National registers on individual aid grants above €500 000 became mandatory from 1 July 2016. The European Commission hopes the registers will promote compliance, raise awareness on aid granted and function as a disciplinary measure. They count on the registers to ensure better control at the national level, by incentivising beneficiaries to comply and by providing enough information for competitors to check whether aid was lawfully granted. This article provides a case study of how the national registers function in Norway, Iceland and Liechtenstein. The three European Economic Area States are an interesting case study as they are the only countries that have opted for their own national transparency registers, whilst the EU Member States all use the Commission’s portal. The findings show that the transparency registers currently do not provide the information required for competitors to assess the compatibility of an aid measure with the internal market. Almost all the published aid measures lack a link to the national legal basis or the granting authorities’ decision on the individual aid measure. These shortcomings are easily corrected. However, if left unattended, they arguably render block exempted aid unlawful. Currently, the effect of the national registers appears to be that they induce competitors to apply for aid rather than litigate on it. Keywords: Ex post evaluation; Block exemptions; National transparency registers; Individual aid; Privatization of State aid enforcement; Transparency communication