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Selected Online Reading on State Aid

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Selected e-articles

New challenges of EU state aid law: the impact of the pandemic on competition between member states. Széles, Krisztina. Juridical Current. 2022, Vol. 25 Issue 1, p49-73. 25p.

Abstract: The Covid-19 pandemic has generated an unprecedented economic and health crisis. Economic activity has decreased significantly in all Member States of the European Union. In order to avoid serious damage, the Commission has also relaxed the strict rules of state aid law. The State aid Temporary Framework was adopted on 19th March 2020 to mitigate negative economic effects of the pandemic situation. Although action by the Commission was needed, the wide and prolonged application of this measure is likely to distort competition in the internal market. The aim of this study is to explore the early effects of these preferential rules on the internal market and competition between Member States.

 

Getting State Aid Approved by the European Commission: Explaining the Duration of Preliminary Investigations in the State Aid Notification Procedure. Druenen, Ruud van; Zwaan, P.J; Mastenbroek, E. Journal of common market studies, 2022, Vol.60 (3), p.545-561

Abstract: This article aims to explain the variation in duration of preliminary investigations in the state aid notification procedure. While this procedure is guided by objective standards, preliminary investigations result in an overwhelming majority of cases being approved in combination with a large
variation in duration. This study explores the explanatory power of political and managerial factors at the member state and state aid case level to account for this variation. Based on multilevel regression analysis of a newly created dataset, results show that both political and managerial factors
at the state aid case level affect the duration of preliminary investigations. No evidence was found for member state level factors having an effect.

 

State Aid for New Nuclear Power Plants under the Plethora of EU Environmental Regulations. Sebastian J. Kasper. European State Aid Law Quarterly, Volume 21 (2022), Issue 3,pp. 251-265.

Abstract: Climate change has become one of the critical matters of European Union (EU) Law. Hence, the EU Member States are about to transform their respective energy supplies from mainly fossil fuels to climate-neutral sources. This transformation process requires time, as the security of energy supply must be ensured (see Article 194(1)(b) of the Treaty on the Functioning of the European Union). An approach favoured mainly by France and argued by several parties across Europe is to rely heavily on nuclear power and to invest in (new) nuclear reactors until 2050. Against this background, the question arises whether the EU Member States can support the transformation process by granting State aid for nuclear power plants despite the commonly known risks. Since the European Commission’s recently published Guidelines on State aid for climate, environmental protection and energy 2022 exclude nuclear energy from its scope, a broader review of the European Treaties, including the Euratom Treaty, as well as secondary and tertiary instruments, must be conducted to answer this question. Considering that nuclear energy has, following the Joint Research Centre’s risk assessment, recently been included in the Taxonomy Regulation for a transitionary period, granting State aid for nuclear reactors is likely to be still compatible with EU law upon the European Commission’s discretion, but not for long.

 

State aids connection with tax competition regarding the principle of subsidiarity in the European tax law. Erdős, Éva & Gergely, Beáta. Juridical Current. 2017, Vol. 20 Issue 3, p107-117.

Abstract: This study examines the connection between the State aids and tax competition and what functions in this link: the prevalence or the subsidiarity of the EU? We analyse the incompatible State aids, the elements of the definition with introducing the newest notice of the Commission (2016) and the case of the Court of Justice of the EU. This Study analyses the condition of the harmful tax competition. The State aids and harmful tax measures are closely related to each other, but the problem is, that the regulation of State Aids is in the primary competence of the EU, while the tax measures are under the competence of the Member States and in this case the EU' competence is based on the principle of subsidiarity. The Commission's Notice 2016 helps in order to terminate the tax measures and State aid with collection of Court cases of the EU and with the interpretation of concepts relating to tax measures and Sate aid.

 

The Interaction Between the EU’s Climate Change Objectives and Its State Aid Regulation in the Area of Renewable Energy. Davor Vuletić. (2020) 16 CYELP 319.

Abstract: This paper analyses the interaction between the EU’s climate change objectives and its state aid regulation in the area of renewable energy through the chronology of the adoption of the EU’s key policy documents and related legislation. The EU’s state aid rules impose certain restrictions on the public financing of renewable energy, which is crucial for reaching the EU’s climate change objectives in due time. The paper identifies four challenges in this respect. The ultimate challenge for the EU is how to reconcile science, the market economy and energy politics. Another challenge for the EU was the diverging national energy policies before the ‘energy title’ was introduced in the Lisbon Treaty. The third challenge for the Commission is how to move the climate change issues up to the top decision-making level. The final challenge is the state aid framework that supports climate change mitigation, whose upcoming changes should address the gap between ambition and reality. The paper aims to assess the policy consistency of the EU’s climate change legislation in order to determine whether the EU’s credibility as a ‘green leader’ is just nominal. The notion of ‘nominal green leader’ is related to the consistency of the EU’s climate change legislation which seems not to have had the expected effect determined by the Kyoto Protocol and Paris Agreement. The paper brings the ambitious policies face to face with the data on state aid provided for climate and energy targets and compares them with the technological expectations in renewable energy deployment. The question that arises is whether it is time for the EU to balance the understanding of ‘common interest’ more towards climate change mitigation at the expense of certain elements of competition policy.

 

EU fiscal state aid rules and COVID-19: Will one survive the other? Luja, Raymond. EC tax review, 2020, Vol.29 (4), p.147-157

Abstract: In order to facilitate tax relief to deal with the ramifications of the Corona virus, the European Commission temporarily eased the EU’s state aid framework. This contribution will provide a first glance of some of the tax-related measures taken both within and outside of the scope of state aid rules. Their range is wide, from tax filing and payment deferrals to changes to personal and corporate income taxes, VAT and property taxes. Some Member States still struggle with the remaining requirements not to provide tax advantages (other than deferrals) to companies already in financial difficulty before the COVID-19 lockdowns and with recently added restrictions on financial institutions and on handling fiscal years ending after 2020. As for umbrella aid schemes that do not yet specify which measures will be taken but just serve to get approval based on a certain budget, the author suggests to provide a block exemption to reduce the need for prior notification to the Commission. Once government efforts to deal with sudden income loss, liquidity and solvency issues move to stimulating economic recovery, other policy objectives (like the Green Deal) might also enter the equation when companies apply for financial support.

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