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State Aid Legal Action

Significant victories for České aerolinie, a.s. (Czech airline). The European Commission has found that the restructuring aid of CZK 2.5 billion is in line with EU state aid rules. Following an in-depth examination, the Commission found that the restructuring plans of the airline, including capacity reduction, efficient cost and revenue management and asset disposal, should ensure the airline`s viability. On 26 October 2022, the General Court of the European Union delivered a judgment in case T-668/21 (Sicilia Regionale Marittima SpA – Siremar v European Commission). It dismisses the action brought by the Italian shipping company Siremar, one of the six companies of the public undertaking Tirrenia (…) Following the 2008 financial crisis, we advised a large number of financial sector players on the crisis and post-crisis state aid regime, which has a number of similarities with the European Commission`s current approach to state aid. An event that causes damage for which the State is responsible is different from the act that confers the right to compensation. In its advisory capacity, the Council of State found that a provision of the draft law on the acceleration of renewable energies contained illegal state aid. On 8 August 2022, the Council received a request for an opinion on a bill adopted by the government on 26 August 2022. September (…) State aid: measures taken by a public authority (national, regional or local) which uses public funds to favour certain undertakings or the production of certain goods. An undertaking benefiting from such aid thus enjoys an advantage over its competitors. Payment orders issued by the French administration, as the most common method of recovering illegal state aid declared incompatible by the Commission, can be reviewed by the French administrative courts, as shown by the growing number of such actions.

Legal proceedings against these (…) The Fútbol Club Barcelona case concerned the tax advantages granted to certain football clubs in Spain. Paragraph 61 of Fútbol Club Barcelona refers to Case C-81/10 France Télécom v Commission, paragraph 17. This case concerned special tax treatment for France Telecom. That judgment again refers to Case C-409/00 Spain v Commission, paragraph 46. The latter case concerned subsidies for the purchase of commercial vehicles. It is apparent from the case-law that all the cases in which the Court has held that the objective of the contested measure is irrelevant to the concept of advantage concern measures of public policy in respect of which the State has acted as a public authority. In the present case, the situation is somewhat different. The State does not act as an authority pursuing a public policy objective, but as a party to its contractual obligations. Under Article 108 TFEU, the European Commission has the task of examining planned or existing state aid granted by EU countries to ensure that it does not distort competition. We regularly advise banks on the state aid aspects of financing operations and are already working on aid cases under the new COVID-19 Temporary Framework, notably in France. In its crusade against state aid to airlines to deal with the consequences of the Covid-19 pandemic, led by several complaints against Covid-19 decisions taken by the Commission, Ryanair suffered another setback in a Croatian case. With regard to the (…) The concept of State aid covers all resources controlled by the State, irrespective of the reason for which those resources may be transferred to or made available to an undertaking.

In addition, and perhaps more importantly, the advantage is one that is not available to businesses under “normal” market conditions. “Normal” means the state of the market prior to government intervention. But when the state is liable for damages, any payment is not unusual, as a private company in the same situation would also have to provide the same compensation. Successfully represented a number of Greek casinos before the General Court of the EU in an appeal against a European Commission state aid decision. We represent aid recipients or potential beneficiaries, complainants (competitors of companies to which aid has been granted) and national authorities in investigation procedures before the European Commission and national or European courts. We guided many beneficiaries and national authorities through the process and obtained approvals for restructuring, research and development, financial crisis measures and closure of coal-fired power plants, as well as “non-aid” decisions. We also provide legal advice in negotiations with the public sector, for example by drafting or issuing opinions on privatisation agreements, which may contain elements of state aid. We provide high-quality, personalized legal services to every client we serve. We also focus on legal work with a broader scope that targets systemic changes that help more people achieve a decent quality of life. The basic principles for the control of State subsidies and other aid to avoid distortions of competition are set out in Articles 107 to 109 of the Treaty on the Functioning of the European Union. The Commission determines whether aid is contrary to the EC Treaty standard and may order the Member State to terminate it and order the beneficiary of unlawful aid to repay it.

The political motivation for State aid control in the original Treaties was to prevent national favouritism, thereby promoting commercial and competitive opportunities between Member States. DG Competition manages the notification and approval system and deals with State aid policy and decisions in most sectors. Other Directorates-General apply the rules in the areas of transport, coal, agriculture and fisheries. The substantive test is whether the aid distorts or threatens to distort competition by favouring certain products or undertakings (and affecting trade between Member States). On the basis of this text, the defining elements of State aid are State resources, advantages for companies or industries, selectivity, distortions of competition and effects on trade. Correct classification has practical consequences. A measure falling under the formal category of “State aid” must be notified and approved in advance by the Commission. It is therefore first necessary to determine whether a programme or measure constitutes aid. Next, in order to assess whether aid is compatible with the common market, the Treaty describes the authorised uses of aid.

Aid is allowed to eliminate underdevelopment and unemployment and to deal with serious economic disruptions and important projects of common European interest. Aid for other regional development and cultural and heritage conservation activities shall be authorised only if it does not adversely affect trading conditions to an extent contrary to the common interest. © OECD The Court of Justice annuls the two judgments of the General Court dismissing the actions brought by Volotea and easyJet against the Commission`s decision on State aid granted by Italy to Sardinian airports* This decision is also annulled in so far as it concerns Volotea (…) `[T]he combination of State aid expertise and sectoral knowledge sets the company apart.` The Legal 500 EMEA 2019 Another difference with the notified aid procedure is the deadlines set for the Commission to assess it.