2.4.3 The Communications, Guidelines and Notices

The Commission has adopted numerous Communications. They go by different names (i.e. Communications, Guidelines or Notices), but there is no significant difference between these types of documents.1 The purpose of the Communications is to provide guidance. This guidance is intended to make the Commission’s reasoning transparent and to create predictability and legalcertainty.2 The legal status of the Communications can be characterised as ‘soft law’. In other words: they are not binding instruments. However, it is important to point out that by issuing Communications, the Commission is self- limiting its discretion.3 The legal status of the Communications will be discussed in more detail in section 3.4.3.

The Communications, Guidelines and Notices are published in the Official Journal. Furthermore, they can easily be found at the Commission website.4 On that website, the following categories can be found:

As the name indicates, sector-specific rules apply to a specific sector. Horizontal rules, on the other hand, apply (in principle) to all sectors. The specific aid instruments could be considered as a category on its own, or it could be considered as belonging to the category of horizontal rules.5

This PhD-study will not discuss all these Communications, Guidelines and Notices in detail.6 The only Communications that deserve an in-depth discussion are the Crisis Communications, which will be discussed in chapter 3. However, in the current section, some remarks can be made regarding the compatibility assessment. In that regard, two Commission initiatives are worth mentioning: in 2005, the Commission adopted the State Aid Action Plan (SAAP), followed by the State aid Modernisation (SAM) in 2012.7 In the context of first the SAAP and later the SAM, several Guidelines were revised.

In the context of the SAAP and SAM, the Commission set out a methodology for the compatibility-assessment. The SAAP formally introduced the balancing test. The balancing test entailed that the Commission would balance the positive impact of the aid measure against the potentially negative effects.8 In the SAM, the Commission called for identification of the common assessment principles.9 The common assessment principles are largely based on the balancing test. The guidelines that were adopted in the context of the SAM explicitly refer to the common assessment principles. A State aid measure will be considered compatible when the following criteria are met:

A State aid measure must aim at an objective of common interest in accordance with Article 107(3) TFEU. The exact objective depends on the type of aid. For instance, in the Guidelines on R&D&I-aid, the Commission recog nised that “R&D&I aid should contribute to the achievement of the Europe 2020 strategy of delivering smart, sustainable and inclusive growth”.10 State aid to the agriculture sector should be aimed at ensuring viable food production and at promoting the efficient and sustainable use of resources in order to achieve intelligent and sustainable growth.11

A State aid measure must be targeted towards a situation where aid can bring about a material improvement that the market cannot deliver itself. This refers to market failures.

The aid measure must be an appropriate policy instrument to address the policy objective concerned. In that regard, it should be noted, firstly, that State aid is not the only policy instrument and, secondly, that there are various types of aid instruments.

If other less distortive policy instruments make it possible to achieve the same goal, then the aid measure is not the most appropriate instrument. In the same vein, if there are other less distortive types of aid measures, then the aid measure is not the most appropriate instrument.

The aid measure must change the behaviour of the undertaking concerned. In other words: the aid measure must induce the undertaking to engage in additional activity which it would not carry out without the aid.

The proportionality of aid concerns the following question: could the same change in behaviour be obtained with less aid? For an aid measure to be considered proportional, its amount must be limited to the minimum needed for carrying out the aided activity.

For State aid to be compatible with the internal market, the negative effects of the aid measure in terms of distortions of competition and impact on trade between Member States must be limited and outweighed by the positive effects in terms of contribution to the objective of common interest.

Member States, the Commission, economic operators, and the public, must have easy access to all relevant acts and to pertinent information about the aid awarded thereunder.

In 1998, the Council adopted the Enabling Regulation.12 This Regulation enables the Commission to adopt block exemption regulations. In those regulations, the Commission can declare certain types of aid compatible with the common market. Those aid measures are exempted from the notification requirement of Article 108(3) TFEU.

The purpose of block exemptions is to relieve the Commission from an administrative burden.13 There are many State aid cases in which it is almost obvious that the compatibility conditions are satisfied. If the Commission would have to spend time on all those cases, then it would have less time to concentrate on the more distortive State aid cases. By providing that certain cases (that are clearly compatible) do not have to be notified to the Commission, block exemption regulations allow the Commission to concentrate on the more distortive State aid cases.14 Block exemptions also benefit the Member States, since they reduce the administrative costs.15 And since there is no standstill-obligation with respect to aid that falls under the block exemption, recipient undertakings will receive their aid more speedily.

The Commission has adopted several block exemption regulations on the basis of the Enabling Regulation.16 Those regulations concern areas17 in which the Commission has gained sufficient experience to define general compatibility criteria. In 2008, the Commission adopted the General Block Exemption Regulation (GBER). This is one single regulation that replaced the previous block exemption regulations.18 The range of exemptions was also broadened by this Regulation. The GBER should be seen against the background of the State aid Action Plan (SAAP), in which the Commission aimed at a better prioritisation through simplification and consolidation of the block exemptions.19 In 2014, as part of the State aid Modernisation (SAM), the Commission adopted a revised GBER.20 This revised GBER greatly extended the possibilities for Member States to grant “good aid” without prior Commission scrutiny.

The GBER should not be confused with the De minimis Regulation.21 Aid that falls under the scope of the De minimis Regulation is deemed not to meet all the criteria of Article 107(1) TFEU, whereas aid that falls under the scope of the GBER is considered compatible with the common market (in the sense of Article 107(3) TFEU). So in the first case, there is no aid, while in the second case, there is aid, but it is compatible (and therefore authorised). The effect of both regulations, however, is the same: namely the measure does not have to be notified.