Institut d’Etudes Européennes de l’Université libre de Bruxelles, 2005, 234 p.

Aides d’Etat

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The book that caught our attention is soberly entitled "State Aid". It is the result of an international colloquium organised on 13 October 2004 by the Institute of European Studies of the Université libre de Bruxelles in collaboration with the Permanent Representation of Belgium to the EU. This publication is welcome on an issue that remains sensitive. On this subject, the discrepancy between the importance of State aid control in competition policy and the still insufficient interest of the doctrine for this "branch" of competition law deserves to be underlined. This publication is all the more welcome in that there is no shortage of grey areas in state aid law. This is evidenced by the legal uncertainty, "as surprising as it is worrying" (p. 9), which still characterises the very notion of aid.

The book is structured around two general themes: the conditions of application of Article 87 para. 1 EC and the legal regime of State aid. Beyond this binary presentation, the reader will find in the various contributions an impressive source of legal information (Commission decisions and case law of the Court of Justice) and incisive comments on the mechanisms or solutions in force. The authors’ critical analysis focuses on the general balance of state aid law: the fundamental concepts (such as "state aid" or "advantage"), the criteria for assessing legal situations used by the Commission and the Court (criteria of distortion of competition and inter-state effect, use of public resources, market economy operator), the control and sanction procedures (the status of the complainant, exemption regulations) or the case of aid to the public sector (compensation for public service obligations, the example of the Post Office).

The different contributions develop the main significant points of the evolution and the stakes of the subject.

Massimo Merola traces and analyses the development of the Court’s case law and the Commission’s decisions on state aid. The author shows that the scope of Article 87(1) EC, which lays down the criteria for defining the concept of aid, has not always been clearly circumscribed. He also notes a narrowing of the scope of this concept. It observes that, until 1983, the Court favoured an alternative interpretation of the two parts of the second condition constituting aid. The Court accepted the public origin of aid when it was granted "by the State" or "through State resources". Since then, the interpretation given by the Court has evolved towards the requirement that the two elements be cumulative. It was in the Stardust judgment of 16 May 2002 that the Court definitively enshrined the cumulative approach to the condition of the public origin of the aid. The author welcomes the merits of this Stardust approach while at the same time warning of the problems that could arise from this case law. He concludes that this approach should be continued and improved in practice.

At the end of her precise and rich study, Catherine Smits considers that the criterion of the private operator in a market economy remains the only valid criterion for distinguishing State aid, which is in principle incompatible with the common market, from other public interventions, which are in principle lawful. However, she hopes that the Commission’s decisions will clarify this criterion. A cross-reading of the two articles by Denis Waelbroeck and Jean-François Bellis provides us with information on aid that falls within the scope of Article 87(1) EC. Three conditions must be met for this article to apply. Firstly, the measure must be selective and not general, secondly, the aid must distort competition and thirdly, the aid must have an effect on inter-State trade. The authors stress that the teleological and extensive interpretation of these conditions must be reconciled with the requirement of a reasonable application of Article 87(1) EC. In this respect, the control of the financing of general interest missions must be part of a delicate balance between the objective of protection of the service of general interest referred to in Article 16 EC and the objective of a free and competitive market. The need for compatibility between two objectives which are difficult to reconcile has given rise to palpable tension in Community case-law, as illustrated in particular by the Ferring, Altmark Trans and Chronopost judgments.

The reflection on the legal regime of State aid is deepened by three contributions in particular. Laure Levi focuses on the complexity of identifying the aid recipient and its obligation to repay the illegal aid (analysis of the Banks, Seleco and System Microelectronic Innovation cases) (p. 195). Berthold Bär-Bouyssière highlights the difficulties in applying the State aid exemption regulations. His study on the adoption of exemption regulations by the Commission leads him to propose decentralising the control of aid. Finally, Gerrit Schohe denounces the fragile situation of the complainant in the administrative procedure. This procedure takes place almost exclusively between the Commission and the Member State in which the beneficiary resides, thus reducing the companies concerned to the role of mere informers.

In the end, the contributions form a work of remarkable quality, likely to offer a working and knowledge tool on the fundamental questions relating to State aid law. Far from contradicting each other, the cross-examination and critical analysis of practitioners and academics are once again necessary to shed light on a law that is full of subtleties.

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Author

  • University of Paris I Panthéon-Sorbonne

Quotation

Beligh Nabli, Aides d’Etat, September 2005, Concurrences N° 3-2005, Art. N° 12660, pp. 160-161

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