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State aid Law / Subsidy Law (EU-anti-trust law)

The EU-State Aid Law

The European state aid law or the subsidy law constitutes a sub-section of the European antitrust law. European antitrust law, on the other hand, covers rules regarding the administration of companies. Companies must observe certain rules, such as the ban on cartels or the prohibition of an abusive behavior from a dominant position.

The rules on granting State aids provided by Articles 107 to 109 of the TFEU of the economic intervention in favor of the Member States set certain limits that will demonstrate in this guideline. The rules of the European aid law limit the freedom of the Member States to participate in economic life as established by Article 345 TFEU.

This limit is consider exceeded when a Member State is operating in favor of certain traders and benefits economic advantages that they would not have received in marketing environments.

In accordance with the consolidated practice of the Commission and the European courts (the European Court of Justice and the European Court of First Instance), the concept of State aid within the meaning of Article 107 (1) TFEU would be very broadly interpreted. Many governmental measures, which appear at first glance "unsuspicious", might contain aid elements. The Commission is responsible for monitoring the correct application of the State aid rules in the Member States. In accordance with Art. 17 TEU in conjunction with Article 107 et seq. TFEU, it is the only supervisory authority to deal with questions of the aid right, which can make a binding decision on the permission competence of aid.

With the new element of a more refined economic approach, aid for assessment compatibility needs to be subjected to a three-step audit; the main features of those are described in the following list:

  • the purpose of implementing a common interest;
  • the suitability of the aid in achieving this goal and the incentive effect and commensurability;
  • limitation of the extent of the distortion of competition and trading corruption overbalancing the positive aspects.

This examination scheme has been included, for example, in the Community Guidelines on State aid for environmental protection. As far as concerned the prohibition of implementation, Article 108 (3) TFEU is of great practical relevance. According to this provision, the Member States are prohibited from granting aid until the Commission has finally decided on its legality. This process requires an early examination of aid questions and the introduction of necessary steps from the affected authorities. If it does not happen, there is high risk that the legal measures will fail or be significantly delayed, due to technical reasons. For businesses in disadvantaged regions, timely clarification of aid issues is essential.

In case of aid-relevant projects, the “Länder” (States) must come to an agreement with the commission at an early stage, with the collaboration of the responsible federal authorities. This is necessary because, in contrast to the European Union, the Confederation is responsible for the correct application of European aid law. If the decision takes are considered unconstitutional, the Confederation must justify them to the European Union.

Our anti-trusting activities in State Aid Law and Subsidy Law

We advise private and public companies and public corporations in state aid law, subsidy law, as well as anti-trust law and procurement law.

We are actively involved in legal aid procedures before national and European courts and authorities. In order to deal with these issues with professional expertise, in our praxis, we also advise in various areas of national and international commercial law. We are in contact with the Directorate-General for Competition of the European commission. Following, a detailed list of the legal topics we can cover:

  • Procedures for the granting / approval of aid or subsidies;
  • Representation in recovery proceedings in reclamation of aids matters;
  • Competitors law suit against aids;
  • Representation in proceedings against national authorities and the European Commission;
  • Process management before national courts and the Luxembourg courts;
  • State Aid monitoring of privatizations, PPP / PPP and remunicipalization;
  • Subsidiary advice to companies in crisis;
  • Advice and support for participation in funding programs.

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