State Aid

April 1st, 2019

Case C-405/16P, Germany v Commission, CJEU Judgment on 28 March 2019, is concerned with aid supporting renewable energy. The CJEU said:-

“48. It must be noted that, for it to be possible to classify advantages as ‘aid’ within the meaning of Article 107(1) TFEU, they must be granted directly or indirectly through State resources and be attributable to the State …

49. In the first place, in order to assess whether a measure is attributable to the State, it is necessary to examine whether the public authorities were involved in the adoption of that measure …”

“52. In the second place, it follows from the settled case-law of the Court of Justice that the prohibition laid down in Article 107(1) TFEU covers both aid granted directly by the State or through State resources and aid granted by public or private bodies established or designated by the State with a view to administering the aid …

53. The distinction made in that provision between “aid granted by a Member State” and aid granted “through State resources” does not signify that all advantages granted by a State, whether financed through State resources or not, constitute aid but is intended merely to bring within that definition both advantages which are granted directly by the State and those granted by a public or private body designated or established by the State …

54. EU law cannot permit the rules on State aid to be circumvented merely through the creation of autonomous institutions charged with allocating aid …

55. It also follows from the case-law of the Court of Justice that it is not necessary to establish in every case that there has been a transfer of State resources for the advantage conferred on one or more undertakings to be capable of being regarded as State aid, within the meaning of Article 107(1) TFEU …

56. Thus, the Court of Justice has held that a measure consisting, inter alia, in an obligation to purchase energy may fall within the definition of aid” even though it does not involve a transfer of State resources …

57. Article 107(1) TFEU covers all the financial means by which public authorities may actually support undertakings, irrespective of whether or not those means are permanent assets of the public sector. Even if the sums corresponding to the aid measure concerned are not permanently held by the Treasury, the fact that they constantly remain under public control, and therefore available to the competent national authorities, is sufficient for them to be categorised as “State resources” …

58. The Court of Justice has, more specifically, held that funds financed through compulsory charges imposed by the legislation of the Member State, managed and apportioned in accordance with the provisions of that legislation, may be regarded as State resources within the meaning of Article 107(1) TFEU even if they are managed by entities separate from the public authorities …

59. The decisive factor, in that regard, consists of the fact that such entities are appointed by the State to manage a State resource and are not merely bound by an obligation to purchase by means of their own financial resources …

60. It must, however, also be noted that, for the purposes of establishing whether the advantage given to the beneficiary is a burden on the State budget, it is necessary to determine whether there exists a sufficiently direct link between, on the one hand, that advantage and, on the other hand, a reduction of that budget, or a sufficiently concrete economic risk of burdens on that budget …”

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