The yearly review has been written by the French Regulatory team of McDermott Will & Emery – led by Sabine Naugès and Laurent Ayache – and published in one of the most prestigious publications in France, the European Union Law Review. The review focuses on developments in state aid law through the last 12 months and is invaluable to those interested in the case law surrounding State aid, as well as the applicability and legality of such State aid.
The review comments on legal decisions laid down in both European (73) and French (17) jurisdictions regarding EU State aid law throughout 2018.
In 2018, several interesting decisions were handed down regarding the qualification of a tax regime as a State aid, the application of the “Market Economy Operator test” and the compatibility of the State aid financing public infrastructure.
Furthermore, the review comments on the very first decisions recognizing in the responsibility of Member States towards the competitors of illegal State aids beneficiaries.
EU law strictly limits the scope by which Member States can give aid to companies.
This aid may either take the form of subsidies (aid for the establishment of a business, aid for innovation, aid for the restructuring of a company in difficulty, etc.), tax exemption or reduction, and more broadly any intervention by a Member State (as well as any bodies controlled by a Member State) on a market (as a buyer, a seller, a lender, a company shareholder, etc.) which do not match the behaviour of a private company acting in accordance with free-market conditions.
Within the EU, the principle is the general prohibition of State aid, except if the European Commission has authorized it beforehand, after assessing the compatibility of the aid with the internal market. As a result, each Member State has to notify all State aid projects.
If the first objective pursued by EU State aid law is to ensure fair competition on the European market, it currently tends to hold an indirect budgetary control over the public expenditures of each Member State.