Skip to content
  • «
  • 1
  • »

The search returned 1 results.

The Limits of ‘Proportionate’ Discrimination journal article

Phedon Nicolaides

European State Aid Law Quarterly, Volume 20 (2021), Issue 3, Page 384 - 396

Challenges by Ryanair to Commission decisions that authorised Covid-19 related State aid have brought to the fore the important issue of discrimination in both individual aid measures and aid schemes. All State aid is to a certain extent discriminatory because it selectively favours certain undertakings over others which are in comparable situations. The question is how much discrimination is allowed under Article 107(2) and (3) TFEU, especially when Member States limit the number of eligible undertakings. The General Court has ruled that Member States are not obliged to grant State aid to any or all companies. They may limit the circle of beneficiaries. However, Member States may only grant aid that is appropriate for the objective it aims to achieve, necessary and proportionate for that purpose. This article argues that limiting the aid according to the extent of the links of the beneficiaries to the local economy appears to be a good proxy for the effectiveness of the aid, but it may also be disproportionately discriminatory because such links do not necessarily ensure that the beneficiaries actually contribute more to the local economy than non-beneficiaries or that they actually need the aid more than non-beneficiaries. Appropriately designed aid measures can reduce the degree of discrimination, by applying consistently and systematically objectively justified criteria, without compromising the effectiveness of the aid or forcing Member States to grant more aid than they can afford. The recent Court cases have exposed the hitherto unidentified conflict between the discretion of Member States to grant State aid only to a single or a few undertakings and the need to avoid disproportionate discrimination. Keywords: Article 107(2)(b); Article 107(3)(b); discrimination; proportionality; establishment; links with local economy.

  • «
  • 1
  • »