State Aids issues in the annual report 2020 of the Court of Justice of the European Union. JIRP

The text reproduces the content from the Summary The Year in Review, pages. 45 – 47. Multilingual versions accessible at page.

In 2020, the Court of Justice and the General Court gave judgment in a number of State aid cases relating to key sectors of the economy in the Member States. Those cases reflect the difficulties in applying State aid rules in areas such as taxation, energy policy, environmental protection or compulsory health insurance. 

With regard to the question raised by Austria whether the aid granted by the United Kingdom for the construction of Hinkley Point C nuclear power station could be approved by the Commission on the ground that it facilitated the development of certain activities or of certain areas, the Court of Justice answered in the affirmative. It also observed that, subject to compliance with the rules of EU law on environmental protection, the United Kingdom was free to determine the composition of its own energy mix. Î Judgment of 22 September 2020, Austria v Commission, C-594/18 P 

The Court of Justice was also called upon to review the lawfulness of the provision of State resources in favour of two health insurance bodies operating under Slovak State supervision in the context of a compulsory health insurance scheme. It found that, despite the existence of a certain amount of competition between public and private bodies in the context of the scheme, it pursued a social objective and applied the principle of solidarity. Consequently, it held, upholding the decision of the Commission, that the case of the two health insurance bodies in question did not fall within the rules of EU law on State aid. Î Judgment of 11 June 2020, Commission and Slovakia v Dôvera zdravotná poistʼovňa, C-262/18 P and Others

Similarly, the Court of Justice examined the nature of the subsidies that France had granted, in the form of a reduction in employees’ contributions, to fishermen and fish farmers affected by the wreck of the tanker Erika and by the violent storms in 1999. It found that the reduction related to charges covered by employees’ contributions not employers’ contributions. Consequently, the reduction conferred no advantage on fisheries undertakings and, therefore, EU State aid rules, which concern only undertakings, did not apply. The Court of Justice thus ruled that the Commission’s decision ordering France to recover the subsidies was invalid in part. Î Judgment of 17 September 2020, Ministre de l’Agriculture et de l’Alimentation v Compagnie des pêches de Saint-Malo, C-212/19 

By contrast, the Court of Justice ordered Italy to pay a lump sum of €7.5 million and a daily penalty payment of €80 000 for failing to recover aid – of a total amount of approximately €13.7 million – unlawfully granted to the hotel industry in Sardinia. Although, in 2008, the Commission ordered Italy to recover the aid and that, in 2012, the Court of Justice found that Italy had failed to fulfil its obligations in that regard, that Member State still did not comply with its obligation to recover the aid at issue. The Commission then brought a second action for failure to fulfil obligations to impose pecuniary penalties against Italy. That action was upheld by the Court of Justice. Î Judgment of 12 March 2020, Commission v Italy, C-576/18 

As for the General Court, it annulled the decision taken by the Commission finding that the Irish tax rulings in favour of Apple constituted State aid. According to the Commission, Ireland had granted Apple €13

billion in unlawful tax advantages, which therefore had to be recovered by the Member State from the recipient. However, the General Court considered that the Commission did not succeed in showing to the requisite legal standard that the tax rulings in question granted Apple a selective economic advantage and constituted State aid. Î Judgment of 15 July 2020, Ireland v Commission and Apple Sales International, T-778/16 and Others 

Similarly, the General Court annulled the Commission’s decision finding aid measures implemented by the Autonomous Community of Valencia (Spain) in favour of the Spanish football clubs Valencia CF and Elche CF to be unlawful. According to the Commission, the aid measures took the form of guarantees to associations linked to the football clubs in question intended to cover the bank loans taken out by those associations in order to participate in the increase in the capital of the club to which they were respectively linked. However, the General Court considered that the Commission’s decision was vitiated by a number of errors concerning, in particular, the existence of comparable guarantees on the market. Î Judgments of 12 March 2020, Valencia Club de Fútbol and Elche Club de Fútbol, T-732/16 and T-901/16 A | A look back at the most important judgments of the year 45 

By contrast, the General Court dismissed the action against the Commission decision declaring illegal the aid from the Autonomous Region of Sardinia to several airlines serving Sardinia. The aid at issue, seeking to improve the island’s air service and promote it as a touristic destination, was made available to beneficiaries through the operators of the main Sardinian airports. 

The General Court confirmed that the aid had not been granted to those operators, but to the airlines concerned, which must therefore repay it. Î Judgments of 13 May 2020, Volotea, Germanwings and easyJet, T-607/17, T-716/17 and T-8/18 The General Court also upheld the decision taken by the Commission according to which the Spanish tax system applicable to certain finance lease agreements entered into by shipyards with economic interest groupings (EIGs) constituted, as an investment vehicle for granting tax advantages, a State aid scheme in favour of members of the EIGs in question. According to the Commission, that scheme, under which a shipping company acquires a vessel not directly from a shipyard but through an EIG, was partially incompatible with the internal market, in so far as it also allowed shipping companies to benefit from a 20-30% price reduction when purchasing ships constructed by Spanish shipyards. Î Judgment of 23 September 2020, Spain v Commission, T-515/13 RENV and Others 

Lastly, the General Court upheld the Commission’s decision by which it found that the unlimited public guarantee granted by France to IFP Énergies nouvelles (IFPEN), a publicly owned establishment entrusted with research and development in the fields of energy, partially constituted State aid. The General Court considered that IFPEN and France were unable to rebut the presumption that the grant of such a guarantee conferred an economic advantage on IFPEN vis-à-vis its competitors. Î Judgment of 5 October 2020, France v Commission and Others, T-479/11 RENV and Others.

More details in the Judicial Activity Report 04/ra_jud_2020_en.pdf 

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