2.4 The compatibility of State aid

Documentgegevens:

mr. drs. R.E. van Lambalgen, datum 01-12-2017

Datum: 01-12-2017
Auteur: mr. drs. R.E. van Lambalgen
JCDI: JCDI:ADS588204:1
Vakgebied(en): Financieel recht / Europees financieel recht
Mededingingsrecht / EU-mededingingsrecht

In principle, State aid is prohibited. This follows from Article 107(1) TFEU. However, it is a prohibition with several exemptions. Those exemptions are listed in paragraphs 2 and 3 of Article 107 TFEU. Paragraph 2 lists the situations in which the aid is compatible with the internal market. Paragraph 3 lists the situations in which the aid may be compatible with the internal market. In other words: the situations of paragraph 2 are automatically compatible with the internal market; with respect to the situations under paragraph 3, the Commission has discretion.1

Besides the exemptions under Article 107(2) and (3), there are also two other provisions which are relevant: Article 93 TFEU and Article 106(2) TFEU.2 Article 93 TFEU applies to State aid to transport, but this provision will not be discussed in this PhD-study. Article 106(2) TFEU concerns services of general economic interest (SGEI). SGEI are services that are not provided by market forces alone. However, they are in the interest of society as a whole. Certain services are so essential that they must be guaranteed to all citizens on affordable conditions.3 The postal services are a classic example of SGEI.4

According to Article 106(2) TFEU, services of general economic interest fall under the scope of the competition rules, but they can be exempted.5

2.4.1 Article 107 (2) TFEU 2.4.2 Article 107 (3) TFEU 2.4.3 The Communications, Guidelines and Notices 2.4.4 Concluding remarks

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Voetnoten

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The fact that Article 107(3) TFEU gives the Commission discretion was confirmed by the Court in Case 730/73 (Philip Morris), para. 17.

Nicolaides, Kekelekis & Kleis 2008, p. 66.

Sutton 2008, p. 191.

Dekker & Van der Wal 2008, p. 41.

Article 106 (2) TFEU provides that: “Undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly shall be subject to the rules contained in the Treaties, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them. The development of trade must not be affected to such an extent as would be contrary to the interests of the Union.”