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State Aid Tools to Tackle the Impact of COVID-19: journal article

What Is the Role of Economic and Financial Analysis?

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


How to Estimate the COVID-19 Damages? journal article

Economic Considerations for State Aid During a Time of Crisis

Victor Ahlqvist, Adina Claici, Stephanie Tizik

European State Aid Law Quarterly, Volume 19 (2020), Issue 2, Page 150 - 160

The unprecedented volume of State aid applications during the COVID-19 crisis presents new economic challenges and policy considerations related to the need for aid and the extent of the damages suffered by undertakings. In light of the current situation, this article presents the foundation for State aid during the outbreak of COVID-19, discusses the methodology for determining the damages using a counterfactual analysis and addresses some of the important factors that policy makers must balance in order to ensure that firms receive the necessary support while minimising the distortions on competition. Keywords: damage estimation, counterfactual analysis, COVID-19


Private Enforcement of EU State Aid Law Through Damages Claims journal article

Achieving Effective Redress

Alvaro Ummen Almeida

European State Aid Law Quarterly, Volume 18 (2019), Issue 2, Page 169 - 179

A new enabling framework for damages claims based on competition law infringements has arisen in light of the European Damages Directive coming into force and its implementation across EU Member States. Hitherto, one of the reasons why damages awards derived from State aid infringements have been rare is the absence of EU cause of action in claims against the aid beneficiary and on the standards of proof in causality analysis. These obstacles can be surpassed by amplifying the scope of the Damages Directive and through a broader interpretation of the goals of Articles 107 and 108 TFEU with further instruments such as compensation. Aligned with the expectation of initiatives at the EU level, five steps are suggested: amplifying the scope of the Damages Directive to State aid infringements; joint and several liability between Member States and aid recipients; presumption of harm to reduce causal uncertainty; counterfactuals for quantifying damages; and a right of recourse from contractual liability by the aid recipient. A more economic approach in line with the overarching principle of effectiveness will enable an active role by competitors, promoting equivalence between antitrust and State aid harm redress, while also functioning as a complementary deterrence mechanism of enforcement by strengthening the recovery procedure. Keywords: Damages; Enforcement; Framework Equivalence; Effective Redress.


Can an ICSID Award be State Aid? · Cases T-624/15, T-694/15 and T-704/15 Micula · Annotation by Marija Momic journal article

Annotation on the Judgment of the General Court (Second Chamber, Extended Composition) of 18 June 2019 in Cases T-624/15, T-694/15 and T-704/15 European Food SA and Others v European Commission (Micula)

Marija Momic

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 346 - 351

On June 18, 2019, the General Court rendered the judgment in the Micula Case, trying to put an end to the more-than-a-decade-long Micula saga. The judgment was expected to clarify the question of when an arbitral award for the compensation of damages can be regarded as State aid. The Case, however, was decided on a rationae temporis issue, and the General Court did not provide a more detailed guidance on that question. Since all the events relating to the State aid took place before Romania’s accession to the EU, the General Court concluded the Commission did not have the jurisdiction to review the legality of the State aid granted to Romanian investors. Considering that part of the compensation awarded to the applicants included the period after Romania’s accession, the General Court left open the possibility for the Commission to re-assess the compatibility of the compensation for the post-accession period. The Commission, however, has decided to challenge the ruling before the Court of Justice. Keywords: Award of Damages; Investor-State Arbitration; New Aid; Compensation.


The Never Ending ‘Saga’ of the Fallimento Traghetti del Mediterraneo · Case C-387/17 Traghetti del Mediterraneo · Annotation by Alessandra Franchi journal article

Annotation of the judgment of the Court of Justice (First Chamber) of 23 January 2019 in Case C-387/17 Presidenza del Consiglio dei Ministri v Fallimento Traghetti del Mediterraneo

Alessandra Franchi

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 391 - 397

This judgment continues the ‘saga’ related to the litigation between Fallimento Traghetti del Mediterraneo and the Italian State concerning the unlawful State aid granted to Tirrenia di Navigazione SpA as compensation for public service obligations from 1976 to 1980 and shows the complexity of the assessments by national courts on damages related to the granting of unlawful State aid. The CJ provides guidance on the notion of existing aid, clarifying that State aid measures which were granted in a period when the maritime cabotage market was not yet liberalized at Union level cannot be classified as existing aid because of the merely formal absence of liberalisation of that market, to the extent that those subsidies were liable to affect trade between Member States and distorted or threatened to distort competition. The CJ also emphasises the cooperation obligation of the national courts and their role in awarding damages related to the distortion of competition created by unlawful State aid. Member State cannot invoke the principle of legitimate expectation in case of breach of the notification obligation set in Article 108 (3) TFEU. Finally, the CJ clarifies that the ten-year limitation period set out in Article 15, paragraph 1, of Regulation 659/1999 (repealed by Regulation 2015/1589), only applies to Commission investigation under Article 108, paragraph 3, TFEU and only refers to the Commission’s power and time limit for recovery of illegal aid, but does not apply in damages proceedings before the national jurisdictions. Keywords: Existing aid; Recovery; National enforcement; Prescription; Damages.


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.



Italian Court Awards Damages to Beneficiaries for Unlawful Implementation of Aid  ∙ Court of Appeal of Cagliari of 13 June 2017 ∙ Annotation  by Francesco Maria Salerno and Federico Macchi journal article

Annotation on the Judgment of the Court of Appeal of Cagliari of 13 June 2017

Francesco Maria Salerno, Federico Macchi

European State Aid Law Quarterly, Volume 17 (2018), Issue 2, Page 311 - 315

The case in comment illustrates the application of State aid rules by a national court. Moreover, the case deserves to be brought to the attention of a wide readership because it concerns a rare case of award for damages to the beneficiary of the aid. By adjudicating in favour of the beneficiary, the Italian court recognized the peculiarities of the case at issue. At the same time, the ruling raises general questions of consistency with EU law, which are likely to become even more salient as the cooperation between Commission and national courts in the enforcement of State aid rules increases. Keywords: National courts; Damages; State liability; Legitimate expectations.