2. The concept of state aids
EF-STATSSTØTTE
Europarett – JUR 5300 vår 2007
Fredag 2. februar 2007
Catherine Banet
Stipendiat, Nordisk Institutt for Sjørett
Avdeling for Petroleums og Energirett catherine.banet@jus.uio.no
OVERVIEW
Europarett JUR 5300 - Vår 2007 – EF Statsstøtte – Catherine Banet 2
1. Overall objective of state aids control
2. The concept of state aids
Article 87 EC Treaty (ECT):
‘1. Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.’
Community State aid rules apply to measures that satisfy the 4 cumulative criteria listed in
Article 87.1 of the EC Treaty, and which are detailed below.
2.1. Transfer of State resources
Case law:
Steinike und Weinleg, C-78/76.
Kwekerij Gebroeders van der Kooy BV v. Commission (Joint cases C- 67, 68 and 70/85)
Syndicat Francais de l’Express (SFEI) v. La Poste
(C-39/94)
Case Study 1: PreussenElektra (C-379/98)
Conclusion:
Concerning the public origin of the aid, has been affirmed throughout case law a triple principle of indifference:
indifference to the form of the public resource;
indifference regarding the permanent or temporary character of the measure (See First
Instance, Ladbroke of 12 December 1996, approved by ECJ on May 16 2000);
Indifference to the nature of the resources. The fact that State controls them is sufficient.
2.2. Economic advantage
The aid should constitute an economic advantage that the undertaking would not have received in the normal course of business.
2.3. Selectivity
The State aid measure must be selective (i.e. favours certain goods or undertakings) and thus
Europarett JUR 5300 - Vår 2007 – EF Statsstøtte – Catherine Banet 3
affects the balance between certain firms and their competitors. ‘Selectivity’ should be differentiated from ‘ general measures’
.
Case Law: Greece v. Commission, C-57/86, and Tierce Ladbroke, T-67/94).
2.4. Effect on competition and trade
2 cumulative components: restriction to competition, and the effect on trade between Member
States.
2.4.1. Restriction to competition
Case Law: Vlaams Gewest v. Commission (T-214/95)
2.4.2. Effect on trade between Member States
Case Law: ENI Lanerossi, C-303/88; and Vlaams Gewest v. Commission, T-214/95.
2.4.3. De minimis aid rule a) Former de minimis rules: Regulation (EC) No 69/2001
See Notice from the European Commission on the de minimis rule for State aid (OJ, 1996, C-
68/9).
This approach has been given a first legal basis in Regulation (EEC) No 994/88. Later,
Regulation (EC) No 69/2001 (OJ, 2001, L 10, p.30) on the application of Articles 87 and 88 of the EC Treaty to de minimis aid, has made clear that should be excluded from the scope of application of the de minimis aid:
Article 1
‘ This Regulation applies to aid granted to enterprises in all sectors, with the exception of:
(a) the transport sector and the activities linked to the production, processing or marketing of products listed in Annex I to the Treaty;
(b) aid to export-related activities, namely aid directly linked to the quantities exported, to the establishment and operation of a distribution network or to other current expenditure linked to the export activity;
(c) aid contingent upon the use of domestic over imported goods.’
Basic rule for de minimis aid is less than 100,000 EUR in a period of three years for one beneficiary (Article 2, Regulation (EC) No 69/2001).
Regulation (EC) No 69/2001 expired on 31 December 2006.
Europarett JUR 5300 - Vår 2007 – EF Statsstøtte – Catherine Banet 4
b) New de minimis rules: Regulation (EC) No 1998/2006
Commission Regulation (EC) No 1998/2006 of 15 December 2006 on the application of Articles
87 and 88 of the Treaty to de minimis aid, OJ of 28 December 2006, L 379, p.5.
Under the new regulation, aid up to 200,000 EUR, granted over any period of three years will not be considered as State aid.
The new regulation will also apply to the transport sector, which was excluded from the scope of the former regulation.
Entry into force: 29 December 2006. Applicable from 1 January 2007 to 31 December 2013.
3. The different categories of State Aids and applicable exemptions
3.1. Prohibited State aids (Article 87.1)
3.2. State aids which shall be compatible (Art. 87.2)
Article 87.2 lays down the categories of aid that ‘shall be compatible with the common market’:
3.2.1. Aid of social character
Case Law: joined cases C-442/03P and C-471/03P P&O Ferries (Vizcaya) SV v. Commission.
3.2.2. Natural disasters and exceptional occurrences
3.2.3. Federal Republic of Germany
3.3. State aids which may be compatible (Art. 87.3)
3.3.1. Aid to certain severely depressed regions
3.3.2. Aid to promote the execution of an important project of European interest
3.3.3. Sectoral and regional aid which does not adversely affect trading conditions to an unacceptable degree
3.3.4. Cultural aid and aid for heritage conservation
See Article 151.1 of the ECT.
Europarett JUR 5300 - Vår 2007 – EF Statsstøtte – Catherine Banet 5
Particular case of aid to broadcasting sector.
3.3.5. Aids specified by decision of the Council
3.4. Block Exemption Regulations – Horizontal rules
Council Regulation (EC) No 994/98 of 7 May 1998 on the application of Articles 87 and
88 (formerly Articles 92 and 93) of the Treaty establishing the European Community to certain categories of horizontal State aid (OJ, L 142 of 14.05.1998).
Regulation No 994/98 of 7 May 1998, which enables the Commission to adopt so-called
Block Exemption Regulations for State aid .
4. Sectoral guidelines
Exemple: Community guidelines on State aid for environmental protection (2001/C 37/03) (OJ C
37 of 03.02.2001, p.3) – Currently under revision.
5. The control of State aids under EC law
Under Article 88, the European Commission is given the task to control State aid. This article also requires Member States to inform the Commission in advance of any plan to grant State aid.
Community State aid rules apply only to measures the ones which satisfy all the criteria listed in
Article 87(1).
5.1. Preliminary distinction between new and existing aids
Case Law:
Spain v. Commission (C-36/00)
Atzeni and Others, joint Cases C-346 and 529/03)
5.2. Notification and authorisation procedure
5.2.1. The general principle of ex ante authorisation
Community supervision of State aid is based on a system of ex ante authorisation . Under this system, Member States are required to preliminary inform the European Commission of any plan to grant or alter State aid. This procedure has a ‘suspensive effect’ on the implementation of the measure.
5.2.2. Exemptions to notification
‘Block exemption regulations’ for State aid and de minimis threshold.
Europarett JUR 5300 - Vår 2007 – EF Statsstøtte – Catherine Banet 6
5.2.3. Notification procedure a) Notification in practice
Standard notification forms for most types of aid. Notifications sent to the Secretariat General of the Commission through the Permanent Representation of the Member State concerned. b) Request for additional information
In case of incomplete notification, the Commission will request further information. c) Examination of the notification and decision from the Commission
Normally, the Commission has two months within which to examine the proposed aid. See
Commission v. Germany (Case 84/82)
Result of the examination: a ‘decision not to raise objections’ or a ‘decision to initiate Article
88(2) proceedings’. d) Formal investigation procedure
Published in the Official Journal and submitted to comments from interested parties.
Result of the inquiry: final Commission decision (positive, negative or positive, but subject to stated conditions).
5.2.4. Recovery of unlawful State Aids
Case Law:
Case 310/85, Deufil v. Commission, 1987
Commission v. Belgium, C-52/84, 1986
Commission v. Italy, C-349/93
ENI Lanerossi, C-303/88.
Commission v. Germany, C- 94/87, 1989
RSV Maschinefabrieken & Scheepswerven NV v. Commission, C-223/85)
TWD Textilwerke Deggendorf GmbH v Commission T-244 and 486/93
Siemens SA v. Commission, T-459/93, and Regulation 794/2004
See: Report State Aid Scoreboard - autumn 2006 update - COM(2006)761 final, 11.12.2006.
Another Scoreboard will be published in Spring 2007, focusing on unlawful aid.
Europarett JUR 5300 - Vår 2007 – EF Statsstøtte – Catherine Banet 7
6. The State Aids reform
6.1. Objectives of the reform
Provide Member States with a clear, comprehensive and predictable framework. Requires incorporating a refined economic approach into State aid control, to better targeting state aids: less and better targeted aid.
Adaptation to the enlargement of the European Union.
Need for clarification, after multiplication of guidance documents and applicable rules.
Contributes to a better enforcement by Member States.
Shared responsibility between the Commission and Member States
6.2. Main modifications proposed by the European Commission: SAAP
See scheme distributed to students.
6.3. Agenda of the reform
Since 2005, and until 2009, the European Commission is presenting proposals detailing the reform outlined in the SAAP for each area relating to State aid.
Proposals already adopted in the framework of the reform (till February 2, 2007):
de minimis Regulation (Commission Regulation (EC) No 1998/2006 of 15 December
2006 on the application of Articles 87 and 88 of the Treaty to de minimis aid, OJ of 28
December 2006, L 379, p.5)
New rules on State aid in agriculture (December 2006)
New State aid framework for Research, Development and Innovation
Guidelines on National Regional Aid for 2007-2013 (Germany)
Europarett JUR 5300 - Vår 2007 – EF Statsstøtte – Catherine Banet 8
