COMPETITION • EUROPEAN LAW STATE AID

Article 107(3) TFEU lists a number of aids that might be subject to facultative exemptions left to the Commission’s discretion:

– aid with a regional purpose;

– aid to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of a Member State;

– aid to facilitate the development of certain economic activities or of certain economic regions;

– aid to promote culture and heritage conservation.

Other categories of aid may also be deemed compatible by decision of the Council on a proposal from the Commission.

To facilitate individual assessment, the Commission has classified State aid by category – regional aid, sectoral aid, horizontal aid – and published guidelines specifying their conditions of compatibility with the internal market. Furthermore, it has adopted a general block exemption regulation which enables the Member States to grant aid without prior notification where the conditions laid down in the document are met. Regulation No 651/2014 covers 13 categories of aid: almost all economic sectors are concerned. The regulation applies to regional aid, aid to SMEs in the form of investment aid, operating aid and SMEs’ access to finance, aid for environmental protection, aid for research, development and innovation, training aid, aid for disadvantaged or disabled workers and aid for local infrastructures.  It covers new categories of aid such as aid to make good the damage caused by certain natural disasters, social aid for transport for residents of remote regions, aid for broadband infrastructures, aid for innovation, aid for culture and heritage conservation, aid for sport and multifunctional recreational infrastructures.

Aid schemes, individual aid and any ad hoc aid which fulfills all the conditions of the regulation are exempted, without prior notification, provided they contain an express reference to the regulation, by citing its title and publication reference in the Official Journal of the European Union (Regulation No 651/2014, Article 3). The conditions for exemption are divided into two categories: conditions common to all aid and conditions specific to various categories of aid. The exemption may be withdrawn by the Commission when the State has granted allegedly exempted aid that does not meet the requirements of Regulation No 651/2014 (Art. 10).

Outside those cases, aid may be subject to an individual exemption. In order to be compatible with the internal market within the meaning of Article 107(3) TFEU, State aid must both comply with one of the objectives referred to in that text and be necessary to achieve it. Only aid that is indispensable to these objectives is compatible. Aid is necessary when it has an incentive effect. It is proportionate when it is transparent, non-discriminatory and limited in time. It must be justified by a sufficient consideration. Compatibility is assessed not only in terms of the interests of the State granting the aid, but also in terms of the interests of the Union.