Chapter 15: Procedural Aspects of EU State Aid Law and Practice
Michael Schütte I. INTRODUCTION According to Article 108 TFEU, any State aid measure must be notified beforehand to the European Commission, giving it the possibility to assess the measure under EU State aid rules. Member States are under an obligation not to implement the aid measure before the Commission has taken its position and either declared the measure compatible with the internal market under Article 107 TFEU, has not raised any objections or considers that the measure does not constitute aid. These basic rules, as simple as they may sound in principle, provide many pitfalls in practice. One of the main difficulties stems from the fact that Article 108 TFEU – and the Procedural Regulation that has been adopted to make the process more transparent and predictable1 – only apply to measures that constitute a State aid within the meaning of Article 107(1) TFEU. If a measure is not a State aid, then no notification to the European Commission is necessary, and the Member State is free to implement the measure without waiting for any reaction from the Commission. A measure that does constitute a State aid, and that has been implemented without prior notification to the European Commission, is considered an unlawful aid, even if it may be declared compatible with the internal market under Article 107 TFEU. The distinction between unlawful or illegal aid – aid that has not been duly notified – and incompatible aid – aid that is not compatible with the internal market under Article 107(2) TFEU...
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