Phedon Nicolaides

European State Aid Law Quarterly, Volume 22 (2023), Issue 4, Page 371 - 380

State aid that compensates for damage caused by natural disasters or exceptional occurrences can run into many millions. It has the potential to cause a serious distortion to competition in the internal EU market. Yet, Article 107(2)(b) declares that aid compatible with the internal market without any prior assessment of its positive and negative effects by the Commission. This immediately raises the question - why is that aid considered by the TFEU to be compatible with the internal market? A corollary question is whether compensatory aid can be granted only to some of the undertakings harmed by a natural disaster or exceptional occurrence. The Court of Justice has recently answered the latter question by ruling that compensatory aid for a limited number of beneficiaries is not excluded by Article 107(2)(b). This paper argues that the latter question cannot be answered without deriving a plausible answer to the former question. Given the structure and overall objective of Article 107, a plausible answer is that compensatory aid tends to restore rather than distort competition. Therefore, compensatory aid that is granted to a limited number of beneficiaries is likely to be discriminatory beyond the extent that is inherent in any State aid measure and to cause excessive distortion of competition. Keywords: Article 107(2)(b) TFEU, compensation for damage, selectivity, discrimination.

Nicole Robins, Laura Puglisi, Ling Yang

European State Aid Law Quarterly, Volume 19 (2020), Issue 2, Page 137 - 149

In response to the COVID-19 pandemic, the European Commission quickly provided guidance on how Member States can support companies during the crisis in a manner that is in line with State aid rules. With the Commission having approved €2.6 trillion of aid notified by Member States since the start of the pandemic, State aid rules have come under the spotlight more than ever before. Some argue that the different approaches adopted by Member States to deal with the crisis create significant competitive distortions between Member States, while others argue that State aid rules should be made more lenient. This article discusses the State aid tools that Member States can use to deal with the effects of the pandemic, focusing on the role of economic and financial analysis to support the application of these tools. The article examines how Member States can provide liquidity support to companies in compliance with State aid rules, before looking at how Member States could provide more longer-term funding solutions to companies to deal with the effects of the pandemic without breaching State aid rules. Keywords: COVID-19, liquidity support, compensation for damages, rescue aid, restructuring aid, economic and financial analysis, recapitalisations