The Lithuanian Supreme Administrative Court states that a municipality is not entitled to grant interest-free credits without applying State aid rules (Kedainiai District Municipality Council)

Factual background On 13 October 2000 the municipality council adopted decision No 187 “Concerning the Establishment of a Fund to Support Producers of Agriculture Products”. The decision provided for granting of interest-free credits to natural persons, undertakings, cooperatives, village communities, and credit unions. The Government representative claimed that the municipality council exceeded its legitimate powers by adopting the decision which enables one of municipalities in the State to grant preferential credits. According to the applicant, such provision of interest-free credits distorts the situation in the internal market and creates unjustified favourable business conditions for market players based in certain locations. The applicant claimed that a farmer who had received

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Irmantas Norkus, Ilona Janciauskaite, The Lithuanian Supreme Administrative Court states that a municipality is not entitled to grant interest-free credits without applying State aid rules (Kedainiai District Municipality Council), 7 November 2008, e-Competitions Bulletin November 2008, Art. N° 28789

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