State aid to banks (IVOR nr. 109) 2018/2.5.1:2.5.1 New aid

State aid to banks (IVOR nr. 109) 2018/2.5.1

2.5.1 New aid

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In case of new aid1, the Member State has two obligations. Firstly, it has to notify the aid measure to the Commission.2 Secondly, the Member State is subject to a standstill clause: it may not put the aid measure into effect until the Commission has authorised the aid measure.3

The State aid procedure with respect to new aid consists of two phases: a pre-liminary investigation procedure and a formal investigation procedure. The pro-cedure always starts with the preliminary investigation. The formal investigation is only initiated when there are doubts as to the compatibility of the notified aid measure with the common market.

The preliminary investigation procedure

When new aid has been notified, the Commission will launch the preliminary investigation procedure. According to settled case-law, the preliminary stage of the procedure for reviewing aid under Article 108(3) is intended merely to allow the Commission to form a prima facie opinion of the partial or complete conformity with the Treaty of the aid schemes notified to it.4 On the basis of Article 4 of the Procedural Regulation, the Commission can take the following decisions:

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Article 4(2): The Commission finds that the notified measure does not constitute aid. In this case, it shall record that finding by way of a decision.

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Article 4(3): The Commission finds that no doubts are raised as to the compatibility of the notified measure with the common market. In this case, it shall decide that the aid measure is compatible with the common market. This decision is referred to as a ‘decision not to raise objections’.

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Article 4(4): The Commission finds that doubts are raised as to the compatibility of the notified measure with the common market. In this case, the Commission shall initiate the formal investigation procedure. This decision is referred to as an ‘opening decision’.

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Article 4(6): The Commission does not take a decision within two months. In this case, the aid shall be deemed to have been authorised by the Commission.

The formal investigation procedure

The formal investigation procedure is laid down in Article 108(2) TFEU and Article 6 of the Procedural Regulation. The formal investigation procedure is only initiated if the Commission has doubts as to the compatibility of the notified aid measure with the common market.

The Court has held that the formal investigation procedure is “essential whenever the Commission has serious difficulties in determining whether anaid is compatible with the common market. The Commission may thus restrict itself to the preliminary examination under Article 108(3) when taking a decision in favour of an aid only if it is able to satisfy itself after an initial examination that the aid is compatible with the Treaty. If, on the other hand, an initial examination leads the Commission to the opposite conclusion, or does not enable it to overcome all the difficulties involved in determining whether the aid is compatible with the common market, the Commission is under a duty to carry out all the requisite consultations and for that purpose to initiate the procedure under Article 108(2).”5

On the basis of Article 9 of the Procedural Regulation6, the Commission can take the following decisions:

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Article 9(2): The Commission finds that, where appropriate following modification by the Member State concerned, the notified measure does not constitute aid.

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Article 9(3): The Commission finds that the doubts as to the compatibility of the notified measure have been removed. This decision is referred to as a ‘positive decision’.

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Article 9(4): The Commission attaches conditions to a positive decision. This decision is referred to as a ‘conditional decision’.

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Article 9(5): The Commission finds that the notified aid is not compatible with the common market. This decision is referred to as a ‘negative deci-sion’.

A key feature of the formal investigation procedure is the possibility to attach conditions to the authorisation of the aid measure. The Commission can only take a conditional decision in the formal investigation stage.

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