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The Awarding of Royal Warrants: journal article

A State Aid Perspective on a Centuries-old National Practice

Marie-Louise Holle, Grith Skovgaard Ølykke

European State Aid Law Quarterly, Volume 22 (2023), Issue 1, Page 55 - 68

This article explores the tradition of awarding of royal warrants in monarchies in the EU. A royal warrant is an entitlement for an undertaking to utilise the fact that it is supplying a royal court with goods or services in its marketing, as a quality assurance. To determine the legality of awarding royal warrants under EU law, it is examined whether the EU State aid rules apply. To determine whether this is the case, it is decisive whether the monarch is the ‘State’ for the purpose of Article 107(1) TFEU. Therefore, EU law and national public law is analysed. The analysis shows that legal analysis of royal warrants rests on the public/private divide. It is analysed how the various national legal conceptualisations of the monarch fits in the EU concept of State, encompassing all entities which may reasonably be said to act on behalf or under influence of the State. No hard conclusion can be drawn, but it is found that the monarch’s resources are State resources and that the awarding of royal warrants arguably must be considered as imputable to the State. Further, royal warrants confer an economic advantage on beneficiaries, and the monarch does not (formally) receive any (market-like) remuneration. Thus, it is concluded that the award of a royal warrant grants State aid to the benefitting undertaking. Keywords: concept of State; royal warrants; monarch; State resources; economic advantage

Belgian Courts and the Enforcement of EU State Aid Law: journal article

Towards a Regulatory Framework?

Wout De Cock

European State Aid Law Quarterly, Volume 22 (2023), Issue 1, Page 69 - 77

It is well-established that national courts play a crucial role in terms of enforcement of EU State aid law. However, it also well-known that this role is undervelopped in many EU Member States. For example, Belgian State aid courts face all sorts of uncertainties and difficulties when enforcing EU State aid law. This contribution therefore argues that the Belgian State should take (regulatory) measures to ensure that Belgian courts can enforce EU State aid law. Kyewords: Belgian courts; enforcement; standstill obligation; unlawful State aid; obstacles and uncertainties; regulatory framework

On the Qualification of Municipal Authorities as Undertakings · Case C-656/20 P Hermann Albers eK v European Commission · Annotation by Anna Panarella journal article

Annotation on the Judgment of the Court (Seventh Chamber) of 24 March 2022 in Case C-656/20 P Hermann Albers eK v European Commission

Anna Panarella

European State Aid Law Quarterly, Volume 22 (2023), Issue 1, Page 101 - 106

On 24 March 2022 the Court of Justice of the European Union (CJEU) in Case C-656/20 P Hermann Albers v European Commission issued a ruling on whether the transfer of public funds between public authorities constitutes State aid within the meaning of Article 107(1) of the Treaty on the Functioning of the European Union. The main issue underpinning this case is the qualification of the municipal transport authorities receiving funds as ‘regulators’ or ‘undertakings’ in light of their ownership interests in local transport enterprises. The case provides an opportunity to investigate the boundaries of the notion of ‘undertaking’ under EU competition and State aid law. To this end, the analysis focuses, on the one hand, on the constitutive elements of the notion at issue, and, on the other hand, it takes into consideration the notion of ‘emanation of a State’ that can be used for the correct qualification of complex entities performing multiple activities at the same time. The analysis shows that State ownership alone has no bearing on whether a certain public entity qualifies as an undertaking or not.

Petra Flašker and the Notion of Doubts in the Context of Preliminary Investigations of Both New and Existing Measures · Case T-392/20 Flašker v Commission · Annotation by Marianne Clayton, Gaétan Roelants du Vivier and Matthieu Jamart journal article

Annotation on the Judgment of the General Court (Fourth Chamber) of 27 April 2022 in Case T-392/20 Flašker v Commission

Marianne Clayton, Gaétan Roelants du Vivier, Matthieu Jamart

European State Aid Law Quarterly, Volume 22 (2023), Issue 1, Page 89 - 94

The judgment of the General Court in Case T-392/20 Flašker v Commission addresses the procedural concept of serious difficulties and the scope of the Commission’s obligation, when investigating complaints, to carry out a thorough examination beyond the mere information provided by the complainants and the national authorities which is also applicable in the context of existing aid. In particular, the General Court reaffirmed the Commission’s responsibility to conduct a proper investigation when faced with serious allegations and insisted that the Commission cannot rely on the fact that the complaint may not be sufficiently substantiated as an argument for dismissing it. More novel, the General Court noted that the Commission had disregarded the existing procedural rules by adopting a decision finding that, assuming that a measure constitutes aid, it amounts to existing aid, but unfortunately did not draw any further conclusions.

‘Naked Economic Nationalism’ · Case T-111/21 Croatia Airlines - COVID-19 · Annotation by Marijana Liszt journal article

Annotation of the Judgment of the General Court of 9 November 2022 in Case T-111/21 Croatia Airlines - COVID-19

Marijana Liszt

European State Aid Law Quarterly, Volume 22 (2023), Issue 2, Page 199 - 204

This case note concerns one of many European Commission decisions approving State aid as damage compensation to airlines due to extraordinary occurrences (COVID-19 outbreak), on the basis of Article 107(2)(b) TFEU, considered to be an ‘automatic exemption’, meaning that the discretionary powers of the Commission are confined to verifying the fulfilment of the required conditions. This Commission decision has been challenged by the tireless Ryanair DAC, which has been challenging many State aid measures granted to airlines by the Member states simultaneously, on the basis of Article 107(2)(b) TFEU as well as other applicable grounds (Article 107(3)(b); the COVID-19 Temporary Framework). This judgment has been chosen as it refers to Croatia Airlines, the Croatian national air carrier, presenting the first ever General Court decision referring to State aid granted to a Croatian undertaking by the Republic of Croatia. The case raises several peculiar legal questions concerning the notions of discrimination and the difference in treatment. It is also worth mentioning the Court’s argument regarding Croatia Airlines’ essential role in Croatia’s air transport connectivity.

Incentive Effect of State Aid: journal article

Necessity and Counterfactual

Phedon Nicolaides

European State Aid Law Quarterly, Volume 22 (2023), Issue 2, Page 132 - 149

A fundamental criterion of the compatibility of State aid with the internal market is the presence of incentive effect. State aid must be able to change the behaviour of the recipient undertakings. The purpose of this article is threefold. First, it reviews recent case law and Commission decisions on the presence or absence of incentive effect. Second, it argues that this simple, yet fundamental criterion of compatibility suffers from a serious weakness. Third, it proposes an alternative method for establishing the existence of an incentive effect. Even when the aid is granted before the start of work, it does not necessarily follow that it induces the recipient to do something extra. A savvy company that knows how State aid rules work can adjust its investment plans in such a way as to qualify for aid, even when it does not really need it. Therefore, the new approach proposed in this article goes beyond the current test of the existence of incentive effect, asking not just whether a specific investment or project would not be carried out without the aid, but also whether the project is ‘discretionary’, in the sense that it is not indispensable for the continued operation of the recipient company. Keywords: incentive effect; necessity of State aid; indispensable expenditure; discretionary expenditure

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 Analogous Application of State Aid Law to Asymmetric Taxes journal article

Can the Imposition of a Special Charge Be State Aid Within the Meaning of Article 107(1) TFEU?

Lars Mörmel

European State Aid Law Quarterly, Volume 22 (2023), Issue 3, Page 267 - 275

Narrow-scoped special charges imposed by Member States on certain undertakings can have an effect that is as distorting on competition as tax exemptions. However, the wording of Article 107(1) of the Treaty on the Functioning of the European Union (TFEU) does not allow for a direct application of State aid rules in these cases; neither is it possible to treat special charges as a form of far-reaching tax exemption for unaffected undertakings. Despite its practical significance, the Court of Justice of the European Union (CJEU) has failed so far to address the issue appropriately. This article critically examines the relevant case-law and calls for a methodological re-orientation. In the absence of other legal instruments to deal with the problem and in light of the potential for Member States to circumvent State aid rules through special charges, Article 107(1) TFEU should, in extension of its literal scope of application, be applied to special charges by way of analogy. This would lead to more legal clarity and certainty for both lawmakers and affected undertakings. Keywords: special charges; asymmetrical taxes; negative State aid; analogous application