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The search returned 3 results.

Demystifying the Balancing of the Positive and Negative Effects of State Aid journal article

Phedon Nicolaides

European State Aid Law Quarterly, Volume 23 (2024), Issue 2, Page 136 - 142

A recent judgment has confirmed that the European Commission’s consideration of the positive and negative effects of State aid, in the context of its assessment of the compatibility of aid with the internal market, may be “succinct”. The meaning of “succinct” consideration is unclear. Also unclear is how the Commission performs the broader “balancing” of the diverse and often non-comparable effects of State aid. Therefore, this paper proposes that, for the sake of clarity and transparency, the Commission adopts a conceptually simpler approach which in fact corresponds to its current practice. It should state explicitly that compatible State aid must satisfy certain positive criteria without having any manifest negative effects. Such an approach would also be consonant with the case law of the European Court of Justice. Keywords: Assessment of State aid, weighing, balancing, positive effects, negative effects.

The EU Foreign Subsidies Regulation: journal article

Substantive Assessment Issues and Open Questions

Morris Schonberg

European State Aid Law Quarterly, Volume 21 (2022), Issue 2, Page 143 - 152

The EU Institutions have now reached political agreement in relation to the Foreign Subsidies Regulation, a potentially far-reaching instrument that effectively creates a new subsidy control regime for non-EU subsidies affecting the EU's internal market. This article addresses the key substantive assessments that the European Commission will need to consider when investigating foreign subsidies under the Regulation, namely: (i) the existence of a ‘foreign subsidy’; (ii) whether the subsidy causes a ‘distortion’ in the internal market; (iii) whether the negative effects in the internal market may be balanced by any positive effects of the subsidy; and (iv) the determination of redressive measures or commitments required to address the distortions. It identifies a number of significant open issues and questions that could have a substantial effect on how the Regulation operates and ultimately, its impact in practice on competitive conditions within the internal market. Keywords: foreign subsidies; WTO; distortion; balancing; redressive measures

The Balancing Test for Operating Aid for Airports under the Aviation Guidelines 2014 journal article

The Role of Economic and Financial Analysis and Evidence

Kristina Schattat, Natalia Budzynska

European State Aid Law Quarterly, Volume 17 (2018), Issue 3, Page 399 - 411

The compatibility assessment of a State aid measure is about balancing its negative effects on trade and competition in the common market with its positive effects in terms of a contribution to the achievement of well-defined objectives of common interest. One key element for the Commission’s so-called ‘balancing test’ of operating aid under the 2014 Aviation Guidelines is an ex-ante business plan ensuring that the company managing the airport will be able to cover all operational costs as of 2024 at the latest. Another key element for the assessment is the analysis of the catchment area of concerned airports. This article discusses the role of financial and economic analysis and evidence in this balancing test. The Commission Decisions published so far on this type of aid have not included many technical details about the economic and financial analysis of the Commission’s assessment. Neither has the Commission published specific guidance for the Member States on these elements. This article aims to shed light on these aspects by not only reviewing the decisional practice of the Commission but by sharing the practical experience of the authors with helping Member States to receive the Commission’s approval for granting operating aid to regional airports. Keywords: Balancing Test; Compatibility Assessment; Economic and Financial Analysis; Operating Aid; Airport; Infrastructure; Aviation Guidelines 2014; Notification; Business Plan; Operating Funding Gap; Cost of Capital; Catchment Area.

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