European Union law week 5
Problem 8
State aid art. 107 TFEU
Financial aid given by the State to private undertakings is State aid. The State will aid
these undertakings to rescue jobs or to stabilise an economic sector. The costs of State aid
are financed by taxpayers. Moreover, other companies could get disadvantaged if the State
aid helps a certain undertaking. There could also be some unemployment in a ‘poorer' State
because of a rich State. Shortened, an unfair advantage which damages competition and
distorts trade is prohibited.
Art. 107 TFEU decides when a public intervention constitutes a State aid which is
incompatible with the internal market.
Art. 108 TFEU provides the procedure for the control of State aid. The Commission
has to prevent State aid. It’s allowed when it’s in the wider public interest and it supports
benefits society or the economy as a whole. EU governments inform the Commission about
planned subsidies and other support before granting. The plans will be made public, so
interested parties can comment. After the comments, the Commission makes a final
decision.
Art. 109 TFEU gives the Council regulatory competence to make any appropriate
regulations for the application of art. 107 and 108.
Art. 107 TFEU
The general prohibition of State aid can be found in this article. Competition may not
be distorted and trade within the internal market cannot be affected by State aid. Almost all
State aid gets treated as per se competitive distortion (Heiser p. 32). Even aid to an
undertaking that only operates within its State might have an effect on trade between
Member States.
Heiser (page 382) — The Court considered whether small amounts of aid to medical
practitioners in Austria could affect competition and trade. There are some conditions which
Problem 8
State aid art. 107 TFEU
Financial aid given by the State to private undertakings is State aid. The State will aid
these undertakings to rescue jobs or to stabilise an economic sector. The costs of State aid
are financed by taxpayers. Moreover, other companies could get disadvantaged if the State
aid helps a certain undertaking. There could also be some unemployment in a ‘poorer' State
because of a rich State. Shortened, an unfair advantage which damages competition and
distorts trade is prohibited.
Art. 107 TFEU decides when a public intervention constitutes a State aid which is
incompatible with the internal market.
Art. 108 TFEU provides the procedure for the control of State aid. The Commission
has to prevent State aid. It’s allowed when it’s in the wider public interest and it supports
benefits society or the economy as a whole. EU governments inform the Commission about
planned subsidies and other support before granting. The plans will be made public, so
interested parties can comment. After the comments, the Commission makes a final
decision.
Art. 109 TFEU gives the Council regulatory competence to make any appropriate
regulations for the application of art. 107 and 108.
Art. 107 TFEU
The general prohibition of State aid can be found in this article. Competition may not
be distorted and trade within the internal market cannot be affected by State aid. Almost all
State aid gets treated as per se competitive distortion (Heiser p. 32). Even aid to an
undertaking that only operates within its State might have an effect on trade between
Member States.
Heiser (page 382) — The Court considered whether small amounts of aid to medical
practitioners in Austria could affect competition and trade. There are some conditions which
