EU LAW, STATE AID

Question 1

(1) DGcomp description of state aid

Answer 1

An advantage, in any form whatsoever, conferred upon a selective basis, to undertakings, by national public authority.

Question 2

(1) Relevance of “Poor Farmers” to the concept

Answer 2

Concept enjoys very broad definition, however as per “Poor Farmers” does not encompass MEESA (Measure having equivalent effect to state aid).

Question 3

(1) What is the relevant quote on state aid

Answer 3

“State aid is a central instrument of EU economic law, seeking to level the playing field and reflecting the Union’s commitment to undistorted competition.

Question 4

(2) Describe the criteria surrounding state aid

Answer 4

1- Requirement of state intervention.
2- Requirement of selectivity.
3- Requirement of actual or potential distortion of market.
4- Requirement of actual or potential effect on inter-state trade

Question 5

(2) Describe the exceptions, and possible exceptions, to state intervention.

Answer 5

Outlined under ART.107
Actual: Germany (East), Natural Disaster
Possible: Abnormally low S.O.L, high unemployment, correction of drastic economic failing.

Question 6

(3) With regard to state intervention, who does it apply to

Answer 6

Undertakings and not individuals

Question 7

(3) What did the case of “Risparimo” dictate

Answer 7

That not all beneficiaries need to be undertakings

Question 8

(3) What did the case of “Low Carbon” dictate

Answer 8

That is it only a presumption that measure that solely apply to individuals do not benefit undertakings, and this can be rebutted

Question 9

(3) What did the case of “Van Der Kooy” imply

Answer 9

That only state intervention received under regular economic circumstances, and not financial crashes or health crises, may qualify as state aid

Question 10

(3) What did the case of “Altmark” establish

Answer 10

The four principles governing state investment or intervention into the public services

Question 11

(3) What were the four principles established under “Altmark”

Answer 11

1. There must be clearly defined public service obligations.
2. There must be an objective analysis of cost and general economic benefit
3. There must be an avoidance of overcompensation (Commission v. Germany established wide margin of appreciation here)
4. Assessment of overall efficiency and cost must be based on an efficient comparator

Question 12

(3) What was the evolution witnessed between “Tiggle” and “Slom”

Answer 12

CJEU moved from a requirement that state intervention must have an affect on the “expenditure or revenue of the state” to it must be “imputable on the state”

Question 13

(3) What factors were listed under “Stardust Marine” and “Poor Farmers” and how did they help

Answer 13

Factors such as degree of integration of undertaking in public administration, the legal status of the undertaking and public oversight of it are to be considered in deterring whether it can be imputed upon the state.

Question 14

(4) What is the relevance of “Commission v, Italy” with regard to the criteria

Answer 14

Reinforced the fact that market must be distorted or potentially distorted, and the need for potential actual impact on inter-state trade

Question 15

(4) What did Bacon QC have to say about ‘potential’ under criteria 3 and 4

Answer 15

That the incorporation of “potential risk”, and not just the use of “actual impact”, broadened the scope of ART.107. The chance of something having a potential risk is far higher than the actual affects it would have.

Question 16

(4) What is the relevance of “Philip Morris” to the criteria in 3 and 4

Answer 16

CJEU listed a plethora of state interventions that could distort the market and affect interstate trade, such as grants, rebates, discounts, moratoriums, bettering of financial position etc.

Question 17

(4) What was the key presumption established in “Deutsche Alpoverien”

Answer 17

If the identified undertaking or industry exports goods or services, it is axiomatic that criteria 3 and 4 have been fulfilled

Question 18

(4) What was dictated in “Air Liquide Belgium”

Answer 18

Subsidising certain industries with regard to the expense of their exports may qualify as state aid

Question 19

(4) What did Bacon QC have to say about “Deutsche Alpoverein” and “Air Liquide Belgium”

Answer 19

Cases further lower the threshold of criteria 3 and 4, increasing the scope of ART.107

Question 20

(5) What did AG Jacobs have to say about the concept of selectivity

Answer 20

To prescribe a true definition to it is a difficult exercise, with an uncertain outcome

Question 21

(5) What is the general idea behind selectivity

Answer 21

That if a measure is exclusively available, to certain undertakings or industries, then it is by definition selective

Question 22

(5) What did the case of “Adria Wien” establish

Answer 22

The ‘Relative Comparison Test’

Question 23

(5) What is required under the RCT

Answer 23

That the undertaking or industry accused of breaching state aid rules must be evaluated objectively, proportionately, and to a relevant comparative undertaking in a legal and factual situation that reflects the intention of the alleged state aid

Question 24

(5) What did “Italy v. Commission” do to the RCT test

Answer 24

Emphasised a need for broad interpretation, and a wide margin of appreciation with regard to other ‘relevant’ undertakings or industries

Question 25

(5) What did “British Aggregates” establish under the RCT

Answer 25

Potential, as opposed to actual, links to relevant industries and undertakings can be claimed

Question 26

(6) What are the benefits of the concept of selectivity in EU law

Answer 26

Targeted control of distortion, consistency across the Union, flexibility for legitimate and legal climate, environmental, social or historical goals

Question 27

(6) What are the criticisms of the concept of selectivity in EU law

Answer 27

Legal uncertainty, overreaching, favouritism (Howitzer)

Question 28

(6) What do Barnard and Howitzer have to say about selectivity

Answer 28

Barnard; Praiseful, “crucial for distinguishing between general economic and social measures and distortive aid”
Howitzer; Critical, “Concept is misshaped, enriching upon areas of national autonomy such as taxation whilst blissfully ignoring structural measures by wealthy member states that provide state aid discreetly

Question 29

(7) Give a brief synopsis of the “Apple” case

Answer 29

Fax: 1991-2007, Ireland gave effective tax rate of 1-0.005% to Apple, EU pushed by US Senate and Levin, investigated.
Issue: Did the scenario fulfil the criteria of state aid
Ruling: Yes, all four criteria fulfilled, Altmark not relevant, “Phillip Morris” established that betterment of financial position is state aid, “Deutsche Alpoverein” concerned exports

Question 30

(7) What cases are similar to “Apple”

Answer 30

“Amazon Luxembourg”, “World Duty Free”

Question 31

(7) What was the famous quote by Levin?

Answer 31

“Apple have a well earned reputation for creativity… crystallised in their engineering of a highly developed tax avoidance scheme”