EU COMMISSION NOTICE OF NOTION OF STATE AID

On 19 May 2016, the EU Commission (EC) published its final Notice on the notion of State Aid further to its State Aid Modernisation launched in 2012. The Notice updates the EC’s Notice on the application of the State aid rules to various measures in particular rules to facilitate public investment. It sets out  the EC’s view on how State aid applies and also how the EC interprets the CJEU’s case law.

As part of its State Aid Modernisation, the Commission has already updated all major State aid guidelines and simplified the rules so that unproblematic aid measures can be implemented without prior  Commission scrutiny. The overall purpose is to provide legal certainty and reduce administrative formalities for public authorities and companies, and focus the Commission’s resources on enforcing  State aid rules in cases with the biggest impact on the Single Market.

This Notice clarify the different elements of the notion of State aid : the existence of an undertaking, the imputability of the measure to the State, its financing through State resources, the granting of an advantage, the selectivity of the measure and its effect on competition and trade between Member States. The main part of the Notice highlights these cumulative conditions stated in article 107 (1) of TFUE with the most recent case-law of the EU Courts. The Notice gives general guidance on all aspects of the definition of State aid. It does so by systematically summarising the case law of the EU courts and the Commission’s decision-making practice.

In addition, given the need for specific guidance expressed by Member States, this Notice provides specific clarification with respect to public funding of infrastructure. The Notice should facilitate public investment in the European Union by helping Member States and companies to design public funding in ways which do not distort competition. It gives clear guidance on when public investments do not involve State aid, notably because they do not risk distorting the level playing field in the Single Market or risk crowding out private investment.

Marc Picat

25-05-2016
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