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A Critical Analysis of Rescue and Restructuring Aid journal article

Giulia Sonderegger

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 264 - 273

Rescuing and restructuring aid (R&R aid) is one of the most controversially debated categories of State aid and perceived very critically by the Commission. In the course of the State aid modernisation programme in 2014, the Commission has tightened the requirements to grant such aid by introducing a non-exhaustive list of balancing criteria. This counterfactual analysis increasingly shifts the focus to the economic effects of R&R aid and the incentives it creates. The modernised R&R aid therefore primarily aims at promoting a more reliable assessment of all the effects of an intervention whilst enhancing the predictability of decisions. Despite the efforts the Commission has put into improving R&R rules, this article asserts that due to R&R aid’s pervasive and distortive nature, it can hardly ever be justified and should consequently be replaced with other, less distortive market instruments, such as harmonised insolvency proceedings. Considering the fact that the EU consists of 28 countries with various national interests, the currently very restrictive practice of R&R aid could, however, be seen as a temporary compromise solution between Member States and the Commission. Keywords: Rescue and Restructuring Aid; State aid Modernisation; Justifiability of Rescue and Restructuring Aid

The Interest in Bringing Annulment Proceedings · Case C-544/17 P BPC Lux 2 Sàrl and Others v European Commission · Annotation by Federica Maldari journal article

Annotation on the Judgment of the Court of Justice (First Chamber) of 7 November 2018 in Case C-544/17 P BPC Lux 2 Sàrl and Others v European Commission

Federica Maldari

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 398 - 403

The Case deals with the decision of Portuguese authorities to put Banco Espirito Santo SA (BES) into resolution and to immediately create a ‘Bridge Bank’. The Portuguese authorities notified to the EC the proposal to grant €4.899 million of State aid to the ‘Bridge Bank’ by way of initial share capital. The EC concluded that the State aid at issue was compatible with the internal market. BPC Lux 2 Sàrl and the other subordinated creditors of BES initiated proceedings before national courts and ultimately to the Court of the Justice of the European Union. On 7 November 2018, the Court of Justice rejected the General Court’s Order to dismiss the action as inadmissible due to lack of interest. Consequently, the Court of Justice confirmed the principle that an interest in bringing annulment proceedings may arise where the annulment might benefit the applicant in pending proceedings before national courts. Keywords: State aid; Financial crisis; Subordinated creditors; Damages; Annulment proceedings; National legal basis.

How to Determine the Existence of a Tax Advantage · Case T-865/16 F.C. Barcelona · Annotation by Begoña Pérez Bernabeu journal article

Annotation on the Judgment of the General Court (Fourth Chamber) of 26 February 2019 in Case T-865/16 F.C. Barcelona v European Commission

Begoña Pérez Bernabeu

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 377 - 381

Without ruling on the merits of the Case, the General Court annulled the Commission’s Decision qualifying as State aid a tax regimen granted by Spain to the major Spanish professional football clubs Real Madrid, F.C. Barcelona, Athletic Club de Bilbao and Club Atlético Osasuna. Following the action for annulment from F.C. Barcelona, the General Court took the view that the Commission had not sufficiently proven that the tax regime had the effect of conferring an actual economic advantage on these four clubs. Keywords: State aid; Burden of proof; Standard of proof; tax advantage; tax rate.

Port of Izola: An Appreciable Twist in State Aid Law? · Case T-728/17 Marinvest-Porting · Annotation by Edwin Schotanus journal article

Annotation on the Judgment of the General Court (Second Chamber) of 14 May 2019 in Case T-728/17 Marinvest d.o.o. and Porting d.o.o. v European Commission

Edwin Schotanus

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 359 - 365

Under the Case law of the Court of Justice (CJ), aid measures are very quickly considered to affect competition and trade between Member States (inter-State trade). Nonetheless, in certain clear, specific situations, this will not seem to be the case. The European Commission is constantly seeking ways to dispose of such issues fast, in order to focus on more harmful types of State aid. This pragmatic approach by the Commission is at odds with the CJ’s principled application of the criteria ‘effect on competition’ and ‘effect on inter‑State trade’, and may sometimes result in inconsistent Decisions. Legal certainty would be furthered by a CJ ruling about the Commission’s pragmatic approach. Keywords: effect on inter-State trade; effect on competition; appreciability; State aid.

Puzzles of the State Aid Rules on RDI journal article

Caroline Buts, Phedon Nicolaides, Hans Pirlet

European State Aid Law Quarterly, Volume 18 (2019), Issue 4, Page 489 - 509

Despite the improvement of the State aid rules on Research, Development and Innovation (RDI) during the past decade, stakeholders have claimed that the current rules are at points ambiguous, which results in a negative impact on innovation. By means of an exploratory case study and participatory action research, this article aims to identify the ambiguities in the RDI rules. While the rules are detailed and overall well explained, we detect three themes where ambiguities arise, ie non-economic activities, price calculation of goods or services provided by research organisations, and ancillary activities of research organisations together with the 20% threshold. For each of these categories, we discuss what constitutes a ‘safe’ interpretation of the concepts involved. This entails an interpretation that is in line with the case law as well as with the spirit of State aid control. Where appropriate and possible, we provide examples as well as suggestions for their practical implementation. Next to providing guidance regarding the detected ambiguities, this article aspires a contribution to the forthcoming revision of the State aid rules for RDI. Keywords: State aid policy; Research, Development and Innovation; GBER; RDI Framework.

Special Charges, Free Movement and State Aid journal article

The Negative State Aid Approach

Guilherme Galdino

European State Aid Law Quarterly, Volume 18 (2019), Issue 4, Page 510 - 518

Given that special charges have not been addressed properly, one intends to answer whether it is better to consider the aid as the non-imposition or the tax exemption, or as the tax itself. To address this issue, the cumulative application of free movement of rights and State aid rules is examined, mainly, in light of the possible consequences. Not only is the concept of negative State aid discussed, but also the legal reasoning and consequences appropriate to its application are analysed. The author argues that State aid rules should, by analogy, be applied to special charges, considering the tax itself the aid because: the selective analysis is maintained; it is possible to define an appropriate remedy; and it can be applied to situations involving also free movement rights. Keywords: Special Charges; Negative State aid; Asymmetrical taxes.

The Transformation of State Aid Control in Serbia and EU Conditionality journal article

Challenges of Integration Uncertainty and Reform Prospects

Marko Milenkovic

European State Aid Law Quarterly, Volume 17 (2018), Issue 1, Page 66 - 79

Serbia’s EU integration process has only commenced after the political change in 2000. The cornerstone of the relations between the country and the EU is the Stabilisation and Association Agreement, which mandates the full alignment of State aid measures with the EU standards. Since 2006, subsequent governments have been working on aligning the substantive rules for the granting of State aid with the (ever-changing) EU framework, with a growing number of State aid measures and schemes being notified to and approved by the Commission for State Aid Control (CSAC). However, this period was also characterised by a severe economic crisis. By examining the legal framework, institutional structure for State aid control and overall experiences of the first phase of the implementation of the Law on State aid, this paper draws conclusions on the major challenges and obstacles encountered introducing the new regulatory regime in the context of a deep economic crisis, on-going enlargement fatigue and conflicting political legacies. Keywords: Serbia; Institutional Transformation; EU Conditionality; Enlargement Fatigue.

Passing-On and Recoverable Unlawful State Aid under European Union Law journal article

Édouard Louis Jean-Baptiste Bruc

European State Aid Law Quarterly, Volume 17 (2018), Issue 1, Page 54 - 65

The willingness to encourage private parties to seek compensation has emphasised the necessity to push forward economic analysis regarding antitrust cases. The question concerning a passing-on defence thus entered the sphere of public enforcement of EU State aid law via a judgment which highlighted the possibility to take a passing-on defence regarding the ‘undercharge’ passed on to the consumer through the entrustment (lowering prices). However, the ECJ quashed the judgment, preferring a more deterrent approach, implicitly stressing that it can only be a‘Pyrrhic victory’ because it would require predictions as regards the behaviour of the benefiting undertaking and its results. In the author’s view, this rollover is an opportunity to underline the difference between public and private enforcement aims, and to understand the role of private enforcement under State aid law which in fact requires a passing-on analysis. Keywords: Passing-on, Private Enforcement; Unlawful State aid; Recovery.