Keywords

Summary



Keywords

1. State aid – Planned aid – Examination by the Commission – Application of the substantive legal rules in force at the time when the Commission adopted the decision

(Art. 88(3) EC; Council Regulation No 659/1999, Art. 4)

2. State aid – Prohibition – Exceptions – Aid categories, set out in legislation, which can be regarded as compatible with the common market

(Arts 87(3) EC and 88(3) EC)

Summary

1. With regard to the temporal application of a rule of law, in the absence of transitional provisions, it is necessary to distinguish rules governing competence from substantive rules. With regard to the rules governing the competence of the European Union (‘EU’) institutions, the provision constituting the legal basis for a measure and empowering the EU institution to adopt the measure in question must be in force at the time when that measure is adopted. The substantive rules, on the other hand, govern, from their entry into force, all the future effects of situations which came about during the period of validity of the earlier legislation. Consequently, the substantive rules do not apply to the effects established prior to their entry into force, unless the exceptional conditions for retroactive application are satisfied.

With regard to aid which has been notified but not paid, under the EU system for the review of State aid, the date on which the effects of the planned aid becomes established is the same as that on which the Commission adopts the decision ruling on the compatibility of that aid with the common market. The rules, principles and criteria for assessing the compatibility of State aid which are in force at the date on which the Commission takes its decision may generally be regarded as those best adapted to the conditions of competition. That is because the aid in question would not create real advantages or disadvantages in the common market until, at the earliest, the date on which the Commission decides whether or not to authorise it. On the other hand, in the case of aid which has been paid unlawfully without prior notification, the applicable substantive rules are those in force at the time when the aid was paid, where the advantages and disadvantages created by such aid arose during the period in which the aid in question was paid.

Admittedly, the fact that – as regards aid which was notified but not paid – the date establishing the applicable substantive legal rules is the same as the date on which the Commission adopted a decision on the compatibility of that aid means that the Commission can, by varying the duration of the assessment of the aid measure notified, trigger the application of a substantive legal rule which has entered into force after that measure was notified to the Commission. In that regard, it should be noted that the possibility open to the Commission of choosing to apply either the new rule or the old rule is limited and offset, first, by the fact that the Member States have a discretion with regard to the date on which they notify the aid measures and, secondly, by the fact that Article 4 of Regulation No 659/1999 laying down detailed rules for the application of Article 88 EC enjoins the Commission, in accordance with the principle of sound administration, to act diligently.

(see paras 32-33, 35-37, 40-41)

2. Under Article 87(3) EC, certain categories of aid ‘may be considered to be compatible with the common market’. If a regulation is based on Article 87(3) EC and defines the aid which may be considered to be compatible with the common market it does not follow that it is necessarily so. It is for the Commission to establish, under Article 88(3) EC, whether that aid fulfils all the conditions governing compatibility with the common market.

(see paras 60-62)