European state aid law / edited by Martin Heidenhain.
2010
KJE6437 .E929 2010 (Map It)
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Title
European state aid law / edited by Martin Heidenhain.
Published
München : Beck ; Portland, OR : Published in North America (US and Canada) by Hart Pub., 2010.
Call Number
KJE6437 .E929 2010
ISBN
9783406578847 (Beck)
3406578845 (Beck)
9781841139180 (Hart)
1841139181 (Hart)
3406578845 (Beck)
9781841139180 (Hart)
1841139181 (Hart)
Description
xlvi, 816 pages ; 25 cm
System Control No.
(OCoLC)589199059
Bibliography, etc. Note
Includes bibliographical references.
Record Appears in
Added Author
Table of Contents
ch. 1
General Principles
1
℗ʹ 1
Basic Outline of State Aid Law
1
A.
Prohibition of State Aid
1
I.
Basis for the Prohibition
1
II.
Authority of the Commission
3
III.
Authority of the Council
4
IV.
Authority of the Community Courts
4
V.
Goals of Aid Regulation
4
B.
Scope of State Aid Prohibition
5
I.
Substantive Scope
5
II.
Geographic Scope
5
III.
ECSC Treaty
6
IV.
Euratom Treaty
6
C.
Volume of Aid being Granted
6
℗ʹ 2
Development of State Aid Law
8
A.
General
8
B.
Acts of the Commission
9
I.
Communications, Guidelines, Frameworks, Regulations
9
1.
Procedure
9
2.
Block Exemption Regulations
9
3.
Horizontal aid
9
4.
Regional aid
10
5.
Sectoral aid
11
II.
Statistical Data
11
III.
Transparency of the Commission's Activities
11
C.
Acts of the Council
12
ch. 2
The Concept of State Aid
13
℗ʹ 3
General Principles
13
A.
Demarcation of Jurisdictions
13
B.
Elements of State Aid
14
C.
Interpreting the Elements
15
D.
Grantors of Aid
18
E.
Aid Recipients
19
F.
Types of Aid
19
G.
Compensation for the Discharge of Services of General Economic Interest
20
H.
De minimis aid
20
I.
Derogatory Provisions of the Treaty
21
℗ʹ 4
The Concept of State Aid
22
A.
Granting of an Economic Advantage
23
I.
Economic Advantages
23
1.
Principle of fair market value
23
2.
Proof of fair market value
26
II.
Relief from Economic Burdens
27
III.
Indirect Advantages
29
IV.
Parafiscal Duties
31
V.
Other State Measures
32
VI.
Date of Grant
33
B.
Transfer of State Resources
33
I.
General
33
II.
Requirement of State Resources
34
1.
State resources
34
2.
Attribution to the State
34
3.
State control
36
4.
Resources of private undertakings
37
5.
PreussenElektra
38
III.
Requirement of Transfer of Resources
40
C.
Favoring of Certain Undertakings or the Production of Certain Goods
43
I.
Undertakings
44
II.
The Production of Certain Goods
44
III.
Specific Measures
45
IV.
Advantages Inherent in the System
48
V.
Tax Law Measures
49
VI.
Broad Interpretation
49
D.
Distortion of Competition
49
I.
Distortion of Competition
50
II.
Relevant Market
53
1.
Concept of State aid
53
2.
Approval of State aid
53
E.
Adverse Effects on Trade between Member States
54
I.
Trade between Member States
55
II.
Adverse Effect on Trade
55
III.
Irrefutable Presumptions
56
IV.
Alignment of Competitive Conditions
57
V.
Trade with non-Member States
58
VI.
Local Matters
58
VII.
Perceptible Effect
59
℗ʹ 5
De Minimis Aid
61
A.
The Commission's de minimis Policy
61
B.
The de minimis Regulation
62
I.
Legal Basis of the de minimis Regulation
62
II.
Procedure to Adopt the de minimis Regulation
62
III.
Scope of the de minimis Regulation
62
1.
Substantive scope
62
2.
Sectoral Scope
63
3.
Temporal scope
64
IV.
Conditions for the Classification as de minimis Aid
66
V.
Monitoring
70
VI.
Legal Consequences of a Classification as de-minimis-Aid
70
℗ʹ 6
State Investments of Capital
73
A.
The "Private Investor Test" as Standard of Review for State Investments of Capital
73
I.
Basic Principles
73
II.
Commission Communications and Decisions
77
1.
Equity Holdings Communication
77
a.
First group of cases: Acquisition of all or part of the assets of an existing firm without the investment of additional capital
77
b.
Second group of cases: Capital investments not involving State aid
77
aa.
Founding of a new enterprise
78
bb.
Provision of fresh capital to public undertakings
78
cc.
Capital increases involving the simultaneous participation of the State and private shareholders
78
dd.
Strategic or high-risk investments
80
c.
Third group of cases: Capital investments constituting State aid
81
aa.
Unreasonably low profitability prospects; no adequate means of self-financing
81
bb.
Only temporary participation of the State
81
cc.
Founding of rescue companies for unprofitable businesses
81
dd.
Disproportionate State participation in a mixed public-private enterprise; investments exceeding the net asset value of the beneficiary enterprise
81
d.
Fourth group of cases: Other cases / grounds for a presumption of State aid
82
2.
Communication on public undertakings
82
a.
General principles of interpretation
83
aa.
Broad spectrum of approaches to evaluation
83
bb.
Relevant point in time for evaluation
83
cc.
Difference in the assessment of majority and minority stakes
83
dd.
Appropriate return on investment
84
ee.
Differentiation between first-time and repeated investments
87
ff.
Strategic investment motives
87
gg.
The investor's need for information
89
b.
Evaluation of particular types of investment
89
aa.
Equity investments
89
(1).
Earning power
90
(2).
Financial indicators
91
(3).
Market situation
91
(4).
Cost of restructuring compared to the cost of liquidation
93
bb.
Debt investments
94
3.
Summary
95
B.
Special Questions, Problem Cases
95
I.
The Appropriate Scope for the State's Economic Activity, Rationality of Private Investors' Market Behaviour
96
II.
Investments in Profitable Enterprises
97
III.
Definition of the Private Investor to be Used as a Standard of Comparison
98
IV.
Calculation of the Average Return in the Industry (Cost of Capital)
99
1.
Cost of equity
99
2.
Cost of debt
101
V.
Calculating the State Aid Component of State Capital Investments
101
1.
State aid component of an equity investment
101
2.
State aid component of a debt investment
101
VI.
Limited Judicial Review
102
℗ʹ 7
State Liabilities
104
A.
State Guarantees
104
I.
Outline of the Problem
104
II.
Compatibility of State Guarantees with Article 87 EC
105
1.
State guarantees as State aid
105
a.
Individual guarantees
105
b.
Individual guarantees for SMEs
108
c.
Guarantee schemes
108
d.
Guarantee schemes for SMEs
109
e.
Requirement of a case-by-case analysis
109
2.
Aid beneficiary
109
a.
Aid benefiting the borrower enterprise
109
b.
Aid benefiting the lender bank
109
3.
Calculating the element of State aid
111
a.
Ad hoc guarantees
111
b.
Guarantee schemes
111
c.
Guarantees and guarantee schemes for SMEs
112
III.
Legal Consequences of the Formal or Substantive Unlawfulness of State Guarantees pursuant to Community Law
112
1.
Formally unlawful State guarantees (Article 88(3) third sentence EC)
112
a.
Decision-making powers of the Commission
113
b.
Decision-making powers of the national courts
113
c.
Competitors
115
2.
Substantively unlawful State guarantees (Article 87(1) EC)
115
B.
Liabilities with Respect to the Obligations of Public Credit Institutions
116
℗ʹ 8
Taxes and Duties
118
A.
Introduction
118
B.
Economic Benefit
120
C.
By the State or Through State Resources
120
D.
Selectivity
122
I.
General Provisions and Exceptions
123
1.
Exceptions
123
2.
Examples
123
3.
Geographic selections
126
II.
Justification through the Nature or Internal Structure of the Tax System
127
1.
Concept
127
2.
Individual cases
129
E.
Distortion of Competition
130
℗ʹ 9
Public Funding of Infrastructure, Sales of Public Land and Buildings
131
A.
Public Funding of Infrastructure
131
I.
State Managed Infrastructures
131
II.
Public or Private Operators
132
III.
Public Private Partnerships
133
IV.
Obligations of General Economic Interest
134
V.
Development of Real Estate
134
B.
Sales of Public Land and Buildings
134
I.
Commission Communication
134
1.
General area of application
134
2.
Sale through an unconditional bidding procedure
135
3.
Sale without an unconditional bidding procedure
136
4.
Notification, complaints
137
5.
Conditions of sale
137
II.
Practice of the Commission
138
1.
Freedom of the participants
138
2.
Unconditional bidding procedure
138
3.
Independent evaluation
138
4.
Principles of appraisal
140
5.
Special sale conditions
141
6.
Distortion of competition, adverse effect on intra-Community trade
141
ch. 3
Compatibility of State Aid with the Common Market pursuant to Article 87(2) EC
143
℗ʹ 10
Significance of Exemptions
143
℗ʹ 11
State Aids of a Social Character to Individual Consumers - Article 87(2)(a) EC
145
℗ʹ 12
State Aids for Natural Disasters and Exceptional Occurrencies-Article 87(2)(b) EC
147
℗ʹ 13
State Aid Based on the Division of Germany-Article 87(2)(c) EC
150
ch. 4
Compatibility of State Aid pursuant to Article 87(3) EC
151
℗ʹ 14
General Principles
151
A.
Introduction
152
I.
Prohibition of State Aid Applies neither Absolutely nor Unconditionally
152
II.
Discretion of and Limitations on the Commission in the Approval of Aid
152
III.
The Nuts and Bolts of the Approval Procedure: The Commission's Publications
155
B.
Community Frameworks, Guidelines and Communications
155
I.
Introduction
155
1.
Inventory of Commission publications
155
2.
Substantive contents of the Commission's publications
158
3.
Lack of clear basis in Community law
159
4.
Systematization of the Commission's publications
160
II.
Force of Law
161
III.
Basis of Authority
164
IV.
Binding Effect
166
V.
Promulgation and Interpretation
169
VI.
Legal Remedies
170
C.
Block Exemption Regulations (BERs)
171
I.
Authority of the Commission
171
II.
Force of Law and Binding Effect
172
III.
Effect of Exemption
174
IV.
Basis of Authority
175
V.
Promulgation Procedure
175
VI.
Oversight Procedure
176
VII.
Qualification Risk and Right to ad hoc Notification
176
VIII.
Requirements for the Substantive Content of BERs
177
IX.
Principles for the Interpretation of BERs
178
X.
Legal Remedies against BERs
179
XI.
Changes Introduced by the General Block Exemption Regulation
179
D.
The Commission's ad hoc Rulings
180
℗ʹ 15
State Aid pursuant to Article 87(3)(a) and (c) EC - Promotion of Areas with Abnormally Low Standard of Living or Serious Underemployment, Promotion of Certain Economic Areas - Regional Aid
183
A.
Background
183
I.
Introduction
183
II.
Guidelines and Frameworks
184
III.
Relation to European Regional Promotion
185
B.
Guidelines on National Regional Aid
186
I.
Scope of Application
186
II.
Forms of Aid
186
1.
Fundamental principle: Investment aid
186
2.
Operating aid
188
3.
Aid for newly created small enterprises
188
III.
Assisted Regions, Population Ceilings, Regional Aid Maps
189
1.
Determination of a Community assisted regions population ceiling
189
2.
Determination of eligible national population coverage
190
3.
Determination of the assisted regions, regional aid maps
191
IV.
Maximum Permissible Aid Intensity
191
1.
General principles
191
2.
"Theoretical" maximum limits in regions pursuant to Article 87(3)(a) EC
192
3.
"Theoretical" maximum limits in regions pursuant to Article 87(3)(c) EC
192
4.
Bonuses for small and medium-sized enterprises
193
5.
Cumulated ceilings
193
V.
Additional Requirements
193
C.
General Block Exemption Regulation
194
D.
Special Provisions for Large Investment Projects
195
I.
History
195
II.
Provisions for Large Investment Projects pursuant to the Guidelines for 2007-2013
195
1.
Scope of application
195
2.
Maximum aid intensity, aid ceilings
195
3.
Notification
197
4.
In-depth assessment under Article 88(2) EC
197
℗ʹ 16
State Aid pursuant to Article 87(3)(b) EC-Aid to Promote the Execution of an Important Project of Common European Interest or to Remedy a Serious Disturbance in the Economy of a Member State
199
A.
Introduction
199
B.
Aid to Promote the Execution of an Important Project of Common European Interest
200
I.
Principles
200
II.
Practical Application
200
C.
Aid to Remedy a Serious Disturbance in the Economy of a Member State
202
I.
Principles
202
II.
Practical Application prior to the Financial Markets Crisis
203
III.
The Financial Markets Crisis 2008/2009
203
1.
The beginning: Application of rescuing and restructuring guidelines
203
2.
Application of Article 87(3)(b) EC
204
3.
State aid to financial institutions
205
a.
Authorisation of aid measures under the Commission's communications
205
b.
The Member States' schemes and ad-hoc measures in support of financial institutions
207
c.
Distinction between fundamentally sound banks and banks suffering from endogenous problems
207
4.
State aid to the real economy
207
℗ʹ 17
State Aid pursuant to Article 87(3)(c) EC - Aid to Facilitate the Development of Certain Economie Activitis or Certain Economie Areas - Horizontal Aid
209
A.
Rescue and Restructuring Aid
211
I.
Community Guidelines on State Aid for Rescuing and Restructuring Firms in Difficulty - Self-binding Regulations of the Commission
212
II.
Scope of Application
214
1.
Substantive scope of application
214
a.
Objective of the aid
214
b.
Form of the aid
215
2.
Scope of application with respect to economic sectors
215
3.
Period of effect
216
III.
Definition of Terms and General Requirements for Approval
216
1.
Firm in difficulty
216
a.
Operational criteria
217
b.
Symptoms
217
c.
Enterprises in insolvency
218
d.
Newly founded enterprises
218
e.
Firms tied into larger business groups
218
f.
Private investor test for firms in difficulty
219
2.
Principle of "one time, last time"
219
3.
Recipients of previous unlawful aids
221
4.
Other Treaty provisions
221
IV.
Rescue Aid
221
1.
Definition of terms
221
2.
Conditions for the authorization of rescue aid
222
a.
Form
222
b.
Objective
222
c.
Terms and conditions
222
aa.
Maximum amount
222
bb.
Interest rate
223
cc.
Reporting obligation
223
dd.
Duration
223
d.
Approval on the grounds of serious social difficulties
224
e.
Avoidance of spill-over effects
224
3.
Procedure
224
a.
Information required in connection with the notification of rescue aid
224
b.
Simplified procedure
224
4.
Monitoring and sanctions
224
V.
Restructuring Aid
225
1.
Definition of terms
225
2.
Conditions for the authorization of restructuring aid
226
a.
Restructuring plan
226
aa.
Objective of the restructuring plan
226
bb.
Content of the restructuring plan
227
cc.
Form
228
dd.
Prematurely disbursed restructuring aid
229
ee.
SMEs
229
b.
Avoidance of undue distortions of competition
229
aa.
Reduction of market presence
229
bb.
Exceptions
232
cc.
Basis for review
233
c.
Limitation of aid to the minimum
234
aa.
Avoidance of surplus cash
234
bb.
Subsidiarity
234
cc.
Proof
236
3.
Information required in connection with the notification of restructuring aid
236
4.
Conditions and requirements
236
5.
Implementation of and amendments to the restructuring plan
237
6.
Monitoring and annual report
238
VI.
Aid to Cover the Social Costs of Restructuring
238
1.
Definition
239
2.
Requirements for approval
239
B.
Research, Development, and Innovation Aid
240
I.
General Principles
240
II.
Community Framework on State Aid for Research, Development, and Innovation
242
III.
Compatibility of Research and Development Aid pursuant to Article 87(3)(c) EC
243
1.
Research categories
243
2.
Aid intensity, eligible costs and form of the aid
245
3.
Supplements
248
IV.
Compatibility of Innovation Aid pursuant to Article 87(3)(c) EC
249
1.
Aid for young, innovative enterprises
250
2.
Aid for process and operational innovation in the service sector
252
3.
Aid for innovation advisory and innovation support services
252
4.
Aid for the secondment of highly qualified personnel
253
5.
Aid for innovation clusters
254
V.
Incentive Effect and Necessity of the Aid
255
VI.
Detailed Assessment of the Compatibility of Aid
257
1.
Measures requiring detailed assessment
257
2.
Balancing test
257
3.
Opening of a formal investigation procedure
260
VII.
Compatibility of Aid pursuant to Article 87(3)(b) EC
261
VIII.
Inclusion of Research Institutions and Innovation Intermediaries
262
1.
Research institutions and innovation intermediaries as recipients of State aid
263
2.
Indirect State aid to enterprises through State-financed public research institutions
264
IX.
Notification, Reporting and Monitoring of R&D&I Aids
266
X.
Cumulation
268
C.
Aid for Environmental Protection
268
I.
General Principles
269
II.
Community Guidelines on State Aid for Environmental Protection
270
III.
Compatibility of Aid pursuant to Article 87(3)(c) EC
271
1.
Overview of aid eligible for approval
271
2.
Investment aid
273
a.
Factual preconditions of aid
273
b.
Supplements
275
c.
Investments and costs eligible for aid
276
3.
Operating aid
278
4.
Aid for remediation of contaminated sites
279
5.
Aid for the relocation of undertakings
280
6.
Aid involved in tradable environmental certificates
281
IV.
Incentive Effect and Necessity of Aid
285
V.
Aid in the Form of Reductions of or Exemptions from Environmental Taxes
285
VI.
Detailed Assessment of the Compatibility of Aid
290
1.
Measures subject to detailed assessment
290
2.
Balancing test
291
3.
Opening of a formal investigation procedure
292
VII.
Compatibility of Aid pursuant to Article 87(3)(b) EC
292
VIII.
Notification, Reporting, and Monitoring of Environmental Aid
293
IX.
Cumulation
294
X.
"Stranded Costs" in the Electricity Sector
294
D.
Export Aid
296
I.
Overview
296
II.
Export Aid
297
III.
Internationalisation Aid
298
IV.
Aid in the Field of Export-Credit Insurances
299
E.
State Aid and Risk Capital Measures
302
I.
Introduction
302
II.
Main Legal Instruments
303
1.
General Block Exemption Regulation
303
a.
Introduction
303
b.
Scope, definitions, individual thresholds and the essential rules regarding risk capital
304
aa.
Scope
304
bb.
Definitions
304
cc.
Conditions for exemption
305
c.
Cumulation
306
2.
Guidelines on Risk Capital Investments 2006
306
a.
Scope
306
b.
Definitions
307
c.
Structure of the Guidelines
308
d.
Assessment of the compatibility under Article 87(I) EC
308
aa.
Aid to investors
308
bb.
Aid to an investment fund, investment vehicle or manager
309
cc.
Aid to the enterprises
309
dd.
De minimis amounts
309
e.
Assessment of the compatibility under Article 87(3) EC
310
aa.
Form of aid
310
bb.
Conditions for compatibility
310
1.
Section 4.3.1 Maximum; level of investment tranches
311
2.
Section 4.3.2 Restriction to seed, start-up and expansion financing
311
3.
Section 4.3.3 Prevalence of equity and quasi-equity investment instruments
311
4.
Section 4.3.4 Participation by private investors
311
5.
Section 4.3.5 Profit-driven character of investment decisions
311
6.
Section 4.3.6 Commercial management
311
f.
Compatibility of risk capital aid measures subject to a detailed assessment
312
g.
Cumulation
312
h.
Reporting and monitoring
313
3.
Debt investment instruments
313
℗ʹ 18
State Aid pursuant to Article 87(3) EC - Support of Certain Economie Activities or Economie Areas - Sectoral Aid
314
A.
General
316
I.
Objectives of Sectoral Aid - Principles and Criteria
317
1.
General principles for the review of planned aid grants
318
2.
Objectives of sectoral aid
320
II.
Sectors Subject to Special Regulations
320
1.
Sensitive sectors
320
2.
Other sectors with special regulations
321
III.
Commission Practice and Communications in Sectors without Special Regulations
323
IV.
Regulatory Instruments Governing Sectoral Aid
326
1.
Guidelines and Community frameworks
326
2.
Regulations and directives
330
V.
Administrative Discretion in Decision Making
331
VI.
Sector Reports
333
VII.
State Aid Action Plan and Horizontal Aid Policies
333
B.
Aid in the Transport Sector
335
I.
General
335
II.
Inland Transport (Transportation of Goods or Passengers by Rail, Road or Inland Waterway)
337
1.
General principles
337
2.
Applicable provisions
338
a.
General provisions - Regulations 1370 /2007 and 1192 /69 concerning State aid in rail, road, and inland waterway transport
338
b.
Road transport
339
c.
Rail transport
340
aa.
Directive 91/440/EEC
340
bb.
First Railway Package
341
cc.
Second Railway Package
341
dd.
Third Railway Package
342
d.
Inland waterway transport
342
e.
Intermodal transport
344
3.
Application in practice
344
a.
Requirements for compatibility under Article 73 EC
344
b.
Road Transport
345
c.
Rail transport
346
d.
Inland waterway transport
347
e.
Intermodal transport
347
4.
Current and future developments
348
III.
Maritime Transport
348
1.
General principles
348
2.
Community guidelines on State aid to maritime transport 2004
350
a.
Scope
350
b.
Objectives
350
c.
Guidelines for evaluation
351
d.
Monitoring
354
3.
Application in practice
355
4.
Future developments
356
a.
The "Marco Polo" Program
356
b.
The "Naianes" Program
357
c.
Seaports
357
IV.
Air Transport
358
1.
General Principles
358
2.
Applicable provisions - Guidelines for the air transport sector 1994 and Guidelines for the development of regional airports 2005
359
a.
Scope of application
360
b.
Instructions and guidelines for evaluation
361
3.
Application in practice
363
a.
Restructuring measures for State airlines
364
b.
Subsidization of low-cost airlines
365
c.
Rescue aid
366
d.
Effects of the attacks of 11 September 2001
366
e.
Airports
366
C.
Aid in the Automotive Sector
367
I.
Applicable Sectoral Regulations
367
II.
Legal Framework through 31 December 2001
368
III.
Legal Framework since 1 January 2003
370
1.
Multisectoral regional aid framework for large investment projects
370
a.
Period of validity
371
b.
Scope of application
371
c.
Aid levels
373
d.
List of sectors
374
2.
Guidelines on national regional aid for 2007 -2013
374
a.
Scope of application
374
b.
Form of aid
375
c.
Maximum aid intensity
375
d.
Large investment projects
376
e.
Notification and assessment
377
f.
In-depth assessment
378
3.
Other aid
380
4.
European automotive industry framework of 25 February 2009
380
D.
Aid in the Shipbuilding Sector
382
I.
Framework on SUte Aid to Shipbuilding
382
1.
Scope of application
382
2.
Sectoral aid provisions
383
a.
Operating aid
383
b.
Export credits
384
c.
Development aid
384
d.
Aid for innovation
385
e.
Regional aid
385
f.
Closure aid
386
3.
Application of horizontal aid provisions
386
4.
Notification obligation and monitoring
386
II.
Application of Block Exemption Regulations
387
III.
Ship-Financing Guarantee Schemes
387
Iv.
New Member States and Candidates for Accession
387
E.
Aid to the Steel Industry
388
I.
Introduction
388
II.
Aid Granted on or after 24 July 2002
388
1.
Substantive law
388
a.
Regional investment aid
388
b.
Rescue and restructuring aid
388
c.
Closure aid
389
d.
Other aid
390
2.
Procedure
390
III.
Aid Granted prior to 24 July 2002
390
1.
ECSC
391
2.
The Steel Aid Codes
391
3.
Individual decisions
393
4.
General State aid measures with effects in the steel sector
394
F.
Aid to the Coal Industry
395
I.
Introduction
395
II.
Rules on Aid Granted on or after 24 July 2002 Council Regulation 1407/ 2002 ("Coal Regulation")
395
1.
Substantive rules
395
a.
Scope of applicability - Definition of "Coal"
395
b.
Aid for the reduction of activity- Article 4 Coal Regulation
396
c.
Aid for accessing coal reserves - Article 5 Coal Regulation
397
d.
Operating aid - Article 5(3) Coal Regulation
397
e.
Inherited liabilities - Article 7 Coal Regulation
397
2.
Procedure
398
3.
Expiration
398
III.
Aid Granted prior to 24 July 2002
398
G.
Aid in the Agricultural Sector
398
I.
Definition of the Agricultural Sector
398
II.
Specific Features of State Aid in the Agricultural Sector
399
1.
State aid as an instrument to achieve the agricultural policy goals
399
2.
No direct application of Articles 87 to 89 EC
401
3.
Important role of the Council
401
4.
Specific structure of the market
402
II.
The specific aid instruments applicable to the agricultural sector
402
1.
Regulation 1535 /2007 - Agricultural de minimis
403
2.
The Agricultural Block Exemption Regulation
404
a.
Purpose and scope
404
b.
Procedure
404
c.
Categories of aid covered by the Block Exemption Regulation
405
3.
The Community Guidelines for State Aid in the Agriculture and Forestry Sector 2007 -2013
405
a.
Purpose and scope
405
b.
Procedure
405
c.
General principles
406
d.
Categories of aid covered by the agricultural guidelines
406
4.
Overview of the different types of aid and reference to the adequate legal basis
406
a.
Aid for rural development
406
b.
Risk and crisis management
406
c.
Other types of aid
407
d.
Aid to forestry
408
e.
Table with an overview of the different types of aid
408
℗ʹ 19
State of Aid pursuant to Article 87(3)(d) EC
410
℗ʹ 20
Council Authority pursuant to Article 87(3)(e) EC and Article 88(2) EC
414
A.
Council's Authority to Amend the Treaty
414
B.
Aid Approval by the Council pursuant to Article 88(2) sub-paras (3) and (4) EC
415
ch. 5
Block Exemption Regulation
419
℗ʹ 21
General Block Exemption Regulation
419
A.
General Background
420
B.
The General Block Exemption Regulation
421
I.
Legal Basis of the General Block Exemption Regulation
421
II.
Procedure to Adopt the General Block Exemption Regulation
421
III.
Substantive Requirements of Reg 94/1998
422
C.
Presence of State Aid pursuant to Article 87(1) EC
422
D.
Common Conditions for Exemption under the GBER
422
I.
Scope of the GBER
422
II.
Definitions
424
1.
General definitions
424
2.
Specific conditions applicable to investment aid
424
III.
Formal Conditions for Exemption
425
IV.
Aid Intensity and Eligible Costs
426
V.
Concept of Transparent Aid
426
VI.
Individual Notification Thresholds
427
VII.
Cumulation
428
VIII.
Incentive Effect
429
IX.
Transparency, Monitoring and Annual Reporting
430
1.
Transparency
430
2.
Monitoring and annual reporting
431
E.
Specific Conditions for Exemption for the Different Categories of Aid
432
I.
Regional Aid
432
1.
Regional investment aid
432
2.
Aid for newly created small enterprises
433
II.
SME Aid
433
1.
Introduction
433
2.
SME definition
433
3.
Compatibility criteria of SME aid
434
a.
SME investment aid
434
b.
Aid for female entrepreneurship
434
c.
SME aid for consultancy services and participation in fairs
435
aa.
Aid for consultancy in favour of SMEs
435
bb.
Aid for SME participation in fairs
436
d.
Risk capital aid
436
III.
Aid for Environmental Protection
437
1.
Introduction
437
2.
Definitions
437
3.
Compatibility criteria for aid for environmental protection
437
a.
Aid for environmental protection except in the form of tax reductions
437
b.
Aid in the form of reductions in environmental taxes
438
IV.
Aid for Research and Development and Innovation
439
1.
Introduction
439
2.
Definition of R&D&I aid
439
3.
Compatibility criteria of R&D&I aid
439
a.
R&D project aid
439
b.
Innovation aid
439
V.
Training Aid
439
2.
General and specific training
440
3.
Compatibility criteria of training aid
441
a.
Permissible aid intensities and bonuses
441
b.
Eligible costs
441
VI.
Aid for Employment
442
1.
Introduction
442
2.
Compatibility criteria of employment aid
443
a.
Employment aid for job creation
443
b.
Aid for disadvantaged and disabled workers
443
aa.
Aid for the recruitment of disadvantaged workers in the form of wage subsidies
443
bb.
Aid for the employment of disabled workers in the form of wage subsidies
443
cc.
Aid for compensating the additional costs of employing disabled workers
444
E.
Final and Transitional Provisions of the GBER
444
F.
Notification of Aid under the GBER
445
ch. 6
Public Undertakings
447
℗ʹ 22
General Principles
447
A.
The Concept of a Public Undertaking
447
B.
Community Law Framework
449
C.
Public Undertakings and EC State Aid Control
450
℗ʹ 23
Transparency Directive
453
A.
Purpose and Development
453
B.
Member States' Duties under the Transparency Directive
455
I.
Transparency Requirements of Public Undertakings
455
II.
Transparency Requirements of Public Undertakings in the Manufacturing Sector
456
III.
Public or Private Undertakings Required to Maintain Separate Accounts
457
℗ʹ 24
Financing Public Undertakings
459
A.
Presentation of the Problem
459
B.
Need for Public Authorities and Public Undertakings to Have a Wide Discretion in Their Investment Decisions
460
C.
Conclusion
461
℗ʹ 25
Cross-Subsidisation
462
A.
Introduction
462
B.
Cross-Subsidy Analysis from an Economic Perspective
464
C.
Cross-Subsidisation and State Aid
466
I.
Application of Article 87 EC to Internal Transactions
466
II.
Cross-Subsidisation Analysis in a Group of Companies and the Limits to the Application of the MEIP
467
III.
Cross-Subsidisation and Overcompensation of Public Services
470
℗ʹ 26
Privatisation
471
A.
Introduction
471
B.
State Aid in die Context of Privatisation
473
I.
Privatisations not Involving Aid
474
1.
Stock exchange flotation
474
2.
Competitive tender
475
a.
Open, transparent and non-discriminatory tender
475
b.
Unconditional tender
478
c.
Highest bid
482
d.
Sufficient time and information
484
e.
Consequences of procedural flaws
485
II.
Privatisations that Require Notification
486
1.
List of indicators provided for in the report
486
2.
Privatisations Following an Expert Evaluation
487
III.
Negative Purchase Price
490
℗ʹ 27
Relation to Article 295 EC
493
A.
The Principle of Neutrality as Laid Down in Article 295 EC
493
B.
State Aid Law as a Trigger for Privatisation
494
I.
Inciting Privatisations through a Rigid Interpretation of the MEIP
494
II.
Conditioning Approval under Article 87(3)(c) EC upon the Privatisation of the Aid Recipient
495
III.
Concluding Remarks
498
ch. 7
Services of General Economic Interest
499
℗ʹ 28
Services of General Economic Interest
499
A.
Introduction and Overview of the Community Acquis
500
B.
Services of General Economic Interest in the EC Treaty
505
C.
Services of General Interest Outside the Scope of the Competition Rules
506
I.
Economic versus Non-Economic Services of General Interest
507
II.
SGEIs without Effect on Trade between Member States
509
D.
The Discharging of Public Service Obligations: Article 87(1) EC and the Altmark Jurisprudence
511
I.
The Judicature Prior to Altmark
512
II.
The Altmark Judgement
515
The Practical Application of the Aiimarfc Criteria
517
1.
The ECJ judicature following Altmark
517
2.
CFI and Commission practice
519
3.
The BUPA judgement
522
IV.
The Relationship between Altmark and Article 86(2) EC
526
V.
Establishing the Right Amount of Compensation
527
1.
Public procurement procedure
527
2.
Amount of compensation in the absence of a tendering procedure: Analysis of the cost of a typical undertaking
529
VI.
Inter-Temporal Application of the Altmark Test
532
E.
The Derogation Provided for in Article 86(2) EC
533
I.
The Commission's SGEI Package
534
1.
The SGEI decision
535
a.
Scope of application and thresholds
535
b.
Conditions for exemption
536
2.
The SGEI Framework
537
a.
Scope of application
537
b.
Conditions for exemption
538
II.
The Conditions of Article 86(2) EC in the Case Law
539
1.
Defining a general economic interest
540
2.
Entrustment
543
3.
Proportionality
545
a.
Proportionality and obstruction test
545
b.
Community interest
548
℗ʹ 29
Sector Specific Rules
549
A.
Introduction
550
B.
Telecommunications Services
550
C.
Postal Services
551
D.
Energy
552
E.
Transport
554
I.
Public Service Obligations in Inland Transport
554
II.
Public Service Obligations in Maritime Transport
556
III.
Public Service Obligations in Air Transport
558
F.
Public Service Broadcasting
559
I.
Introduction
559
II.
Broadcasting Communication of the Commission
562
1.
The State aid character of funding of public service broadcasters
562
2.
Distinction between existing and new State aid
564
3.
Assessment of State funding of public service broadcasters under Article 86(2) EC
566
a.
Public service remit
567
b.
Entrustment
568
c.
Proportionality of the funding
569
aa.
Choice of funding
569
bb.
Transparency requirements
569
cc.
Amount of compensation permissible and proportionality
570
4.
Diversification of public broadcasting services and new services
571
5.
Assessment of State funding of public service broadcasters under Article 87(3)(d) EC
572
III.
Outlook
572
ch. 8
Procedures before the Commission, Council Regulation 659/1999
573
℗ʹ 30
General Principles
573
A.
Basics of the Procedure
574
B.
Procedural Principles up until the Promulgation of br/Council Regulation 659/ 1999, and their ongoing Validity br/after the Regulation's Entry into Force
576
C.
Council Regulation 659/1999
578
I.
Legislative History of Regulation 659/1999
578
II.
Scope of Application of Regulation 659/1999
579
III.
Implementing Rules for Regulation 659/1999
580
IV.
Structure of Regulation 659/1999
581
V.
Definitions
581
1.
Aid
581
2.
Existingaid
582
3.
Newaid
586
4.
Aid scheme and individual aid
587
5.
Unlawfulaid
588
6.
Misuse of aid
588
7.
Interested parties
589
D.
Internal Administrative Organization of the Commission in the Area-of State Aid Control
589
℗ʹ 31
Procedure regarding Notified Aid
591
A.
Notification and Standstill Requirement
591
I.
Content
591
II.
Exceptions
595
III.
Special Notification Obligations
597
TV.
Formal Requirements
598
V.
Withdrawal of a Notification
600
VI.
Standstill Requirement
601
B.
Preliminary Examination Procedure
602
I.
Purpose and Subject of the Preliminary Examinations Procedure
602
II.
Duration of the Preliminary Examination Procedure
604
III.
Consequences of Expiry of the Two-Month Period
607
IV.
Decisions after the Preliminary Examination Prosedure
610
C. Formal Investigation Procedure
614
I.
Purpose and Subject of the Formal Investigation Procedure
614
II.
Duration of the Formal Investigation Procedure
620
III.
Decisions after the Formal Investigation Procedure
622
D.
Revocation of a Decision
625
℗ʹ 32
Procedure regarding Unlawful Aid
628
A.
General
628
B.
Initiation of a Procedure
629
C.
Preliminary Examination Procedure
630
I.
Injunctions
630
1.
General principles
630
2.
Information injunction
631
3.
Suspension injunction
632
4.
Provisional recovery injunction
633
II.
No Time Limits
636
III.
Decisions after the Preliminary Examination Procedure
637
D.
Formal Investigation Procedure
638
I.
General Principles
638
II.
Recovery
641
1.
Principle of recovery for all negative decisions with respect to unlawful aid
641
2.
Exceptions
642
a.
General principles of Community law
642
b.
Limitation period
647
3.
Determination of the amount to be recovered
650
4.
Determination of the aid beneficiary, i. e. of the enterprise from which aid is to be recovered
655
5.
Implementation of the recovery decision
660
℗ʹ 33
Procedure regarding Misuse of Aid
669
℗ʹ 34
Procedure regarding Existing Aid Schemes
672
A.
Scope of Application of the Procedure pursuant to Article 88(1) EC
672
B.
Cooperation pursuant to Article 88(1) EC (Article 17 Reg 659/1999)
675
C.
Proposal for Appropriate Measures (Article 18 Reg 659/1999)
676
D.
Legal Consequences of a Proposal for Appropriate Measures (Article 19 Reg 659 1999)
678
℗ʹ 35
Rights of Interested Parties
682
A.
General Principles
682
B.
Participation in the Formal Investigation Procedure (Article 20(1) Reg 65-659/1999
683
C.
Right to File a Complaint (Article 20(2) Reg 659/1999)
684
D.
Rights to Information (Article 20(3) Reg 659/1999)
689
℗ʹ 36
Monitoring be the Commission
691
A.
General Monitoring Powers of the Commission
691
B.
Annual Reports (Article 21 Reg 659/1999)
692
C.
On-site Monitoring Visits (Article 22 Reg 659/1999)
694
D.
Non-compliance with Decisions and Judgments (Article 23 Reg 659/1999)
696
℗ʹ 37
Common Provisions
699
A.
Professional Secrecy (Article 24 Reg 659/1999)
699
B.
Addressee of Decisions (Article 25 Reg 659/1999)
700
C.
Publication of Decisions (Article 26 Reg 659/1999)
701
D.
Implementing Provisions (Arts. 27-29 Reg 659/1999)
704
E.
Entry into Force (Article 30 Reg 659/1999)
704
ch. 9
Procedures before Community Courts
707
℗ʹ 38
Introduction
707
A.
General
707
B.
Legal Basis
708
C.
Scope of the Present Summary
708
℗ʹ 39
Legal Remedies for the Member State Granting Aid and other State Bodies
709
A.
Legal Remedies to Challenge Decisions Closing the Formal Investigation Procedure
709
I.
The Member State Granting Aid
709
II.
Other State Bodies
710
1.
Legal entity
710
2.
Locus standi
710
a.
Direct concern
710
b.
Individual concern
710
c.
Regional government agency's immanent concern in judicial review
711
B.
Legal Remedies against Decisions to Open a Formal Investigation Procedure
712
I.
Is the Decision to Open a Formal Investigation Procedure exempt from Judicial Review?
712
1.
Principle: Decision unreviewable, because merely a preliminary measure
712
2.
Exception: Classification as new aid (to which the standstill clause is applicable)
712
II.
Standing (locus standi)
714
C.
Legal Remedies against Provisional Orders pursuant to Article 11 of Reg 659/1999 and Orders for Disclosure pursuant to Article 10(3) Reg 659/1999
714
D.
Legal Remedies against Measures Concerning "Existing Aid"
715
I.
Opening of a Procedure and Appropriate Measures
715
II.
Formal Investigation Procedure
715
E.
Action for Failure to Act
716
℗ʹ 40
Legal Remedies for Aid Recipients
717
A.
Legal Remedies against Final Decisions at the Conclusion of a Formal Investigation Procedure
717
I.
Locus Standi
717
1.
Direct concern
718
a.
Decision on individual aid
718
b.
Decision on a general aid scheme
718
2.
Individual concern
719
a.
Decision on individual aid
719
b.
Decision on a general aid scheme
719
II.
Sufficient Legal Interest
722
B.
Legal Remedies against Decisions to open a Formal Investigation Procedure
723
I.
Legal Consequences of the Decision to Open a Formal Investigation Procedure
723
II.
Locus Standi and Sufficient Legal Interest
724
C.
Legal Remedies against Provisional Orders pursuant to Article 11 Reg 659/1999
724
D.
Legal Remedies concerning Measures on "Existing Aid"
724
I.
Proposal of Appropriate Measures
724
II.
Agreement to Appropriate Measures
724
III.
Formal Investigation Procedure and Final Decisions
725
E.
Action for Failure to Act
725
F.
Claims for Damages pursuant to Article 288(2) EC
725
℗ʹ 41
Legal Remedies for Competitors of the Aid Recipient
727
A.
General
728
B.
Legal Remedies against Decisions Concluding a Preliminary Investigation
728
I.
Contestable Legal Act
728
1.
Decision that no aid is present or that aid is compatible under Article 87(3) EC
728
2.
Fiction of approval upon expiration of time limit pursuant to Article 4 Par. 6 Reg 659/1999
729
3.
Classification as existing aid
729
II.
Standing
730
1.
Direct Concern
730
a.
Decision concerning individual aid
730
b.
Decision concerning a general aid scheme
730
2.
Individual concern
731
III.
Sufficient Legal Interest
733
C.
Legal Remedies against a Decision Made at the Conclusion of the Formal Investigation Procedure
734
I.
Contestable Legal Act
734
II.
Standing
734
1.
Direct concern
734
2.
Individual concern
735
a.
The double test: "procedural innlvement" and "substantive effect on market position"
735
b.
Procedural involvement necessary?
735
c.
"Substantive impact"
737
III.
Sufficient Legal Interest
738
D.
Action for Failure to Act
738
I.
Significance
738
II.
Admissibility and Standing
739
III.
Demand for Action
739
IV.
Time Period
739
1.
General
739
2.
Action by the Commission
740
3.
Practical advice on procedure
740
V.
Special Case: Mooting of the Law Suit through Action by the Commission
740
1.
Commission action before the filing of suit
740
2.
Commission action after the filing of suit
741
VI.
Substantiation
741
1.
Obligation to issue a decision concluding the preliminary investigation
741
2.
Obligation to issue a decision concluding the formal investigation procedure
742
3.
Obligation to open a formal investigation procedure with a view to the repeal of a decision pursuant to Article 9 Reg 659/1999
742
4.
Obligation to make a decision on the issuance of a provisional order pursuant to Article 11 Reg 659/1999
743
VII.
The Decision
743
E.
Legal Remedies against a Member State's Failure to Demand Repayment of Aid
743
F.
Legal Remedies concerning Measures on "Existing Aid"
744
I.
Proposal of Appropriate Measures
744
II.
Agreement to Appropriate Measures
744
III.
Formal Investigation Procedure
744
FV.
Conclusions
744
G.
Claims for Damages pursuant to Article 288(2) EC
745
℗ʹ 42
Legal Remedies for Other Third Parties
746
A.
General
746
I.
Importance
746
II.
Case law on the Standing of Trade Associations
746
1.
The association as advocate for the concerns of its members
747
2.
Association representing its own concerns
747
B.
Individual Cases
748
I.
Industry and Trade Associations
749
1.
Associations of aid recipients
749
a.
The association as advocate of the concerns of its members
749
b.
Individual concern of an association
750
2.
Associations of competitors
750
a.
The association as advocate for the concerns of its members
750
b.
Independent concern of the association
750
III.
Miscellaneous
750
℗ʹ 43
Scope of Judicial Review
752
A.
Relevant Point in Time for Assessment of the Factual and Legal Circumstances
752
B.
Substantive Allegations: Violation of the EC Treaty or of a Legal Provision to be Applied in its Implementation
752
I.
Legal Standards Applicable to Review
752
II.
Limitations on the Scope of Judicial Review in the Case Law
753
1.
Limited review
753
2.
The Commission's scope of discretion and judgment in approving State aid pursuant to Article 87(3) EC
753
3.
Does the Commission enjoy discretionary authority in determining that a State measure qualifies as State aid
755
B.
Procedural Grounds
758
1.
Participation and hearing rights
758
a.
Violation of the Member State's right to participation and a fair hearing
759
b.
Violation of the procedural rights of other parties
760
2.
Inadequate statement of reasons
761
ch. 10
Proceedings before the National Courts
767
℗ʹ 44
Proceedings before National Courts
767
A.
Introduction
768
I.
The Role of National Courts
768
II.
Commission Policy and Guidance to National Courts
768
B.
The Standstill Obligation (Article 88(3) last sentence EC) in National Court Proceedings
770
I.
Situations Caught by the Standstill Obligation
770
1.
State aid within the meaning of Article 87(1) EC
770
2.
Notification requirement
771
3.
Specific situations
772
a.
Retroactive implementation of State aid
772
b.
Subsequent annulment of Commission approval
773
II.
The Concept of Illegality
773
1.
Illegality and incompatibility with the common market
773
2.
Illegality and nullity of aid measures
774
III.
Remedies
774
1.
Preventing the payment
775
2.
Recovery of State aid
775
3.
Recovery of interests
776
4.
Damages
777
5.
Interim measures
778
6.
Avoidance; Reimbursement of financial burden
778
IV.
Standing to Invoke Article 88(3) Last Sentence EC
779
1.
Legal standing
779
2.
Standing issues in tax cases
780
3.
Standing of the Member State granting the alleged aid?
781
C.
Enforcement of Commission Recovery Decisions by National Courts
781
D.
Incidental Challenges to Decisions Authorizing Aid
782
ch. 11
Relation between State Aid Law and other Provisions of the Treaty
785
℗ʹ 45
Relationship of Articles 87, 88 EC to other Provisions of the Treaty
785
A.
General
785
B.
Relationship to Article 12 EC
787
C.
Relationship to Article 28 EC
787
D.
Relationship to Article 31 EC
788
E.
Relationship to Article 43, 48 EC
788
F.
Relationship to Article 81, 82 EC
788
G.
Relationship to Article 90 EC
789
H.
Relationship to Article 132 EC
789
I.
Relationship to Council Regulation 139/2004
789
ch. 12
State Aid and Public Procurement Law
791
℗ʹ 46
State Aid and Public Procurement
791
[§] 46 Points of Contact between State Aid Law and Public Procurement Law
792
A.
The Award of Public Contracts as State Aid
793
I.
A Selective Advantage through the Award of Public Contracts
793
1.
Excessive price
794
2.
Other non-market contract terms
795
3.
Consideration of irrelevant award criteria
795
4.
De facto awards of public contracts
798
5.
In-house awards
799
6.
Positive discrimination
799
7.
Public contract for unnecessary services
800
8.
Granting of exclusive rights or concessions
802
II.
Avoidance of State Aid through the Awarding of Contracts in Open Competition
804
1.
Requirements for a non-discriminatory bidding procedure
805
2.
Effect under State aid law of awarding a contract in compliance with the procurement directives
806
III.
Consequences of a Public Contract Qualifying as State Aid
808
1.
Standstill obligation
808
2.
Recovery of State aid
809
3.
Legitimate expectations and counterclaims by the unlawfully advantaged contractor
810
B.
The Treatment ofState Aid in Public Procuresment Procedures
811
I.
Exempt or Approved State Aid
812
II.
Unlawful State Aid
812
1.
Review of the bidders' suitability
812
a.
Personal situation of the bidder
812
b.
Economic and financial soundness of the bidder
813
2.
Abnormally low tenders
813
a.
Formally and substantively unlawful State aid
814
b.
"Neutralization" of unlawful aids through an increase in the offer submitted
814
III.
Subsequently Approved Aids
815
IV.
Appropriate Measures
815
V.
The Contracting Authorities' Duty to Investigate
815