Transcript Document
EU STATE AID LAW
AND THE CREDIT CRISIS
CONOR QUIGLEY QC
IIEA, DUBLIN
3 FEBRUARY 2010
State Aid: Article 107(1) TFEU
State aid within Article 107(1) TFEU
Aid entails a financial advantage from
State resources
Selective advantage favouring certain
undertakings
Distortion of competition
Effect on trade between Member
States
State Aid: Article 107(3) TFEU
Exemptions: Article 107(3)(c) TFEU
Permissible aid
Regional aid
Aid for SMEs
R&D&I aid
Environmental aid
Training/employment aid
Rescue & restructuring aid
Article 108(2) TFEU: Council
approval in exceptional
circumstances
Supervisory Procedures
Supervisory regime
Block exemption
Individual exemption
Duty to notify: Article 108(3) TFEU
Procedural Regulation 659/1999/EC
Preliminary assessment: Article 4
No aid
Aid compatible with common market
Doubts as to compatibility
Formal assessment: Article 7
No aid
Aid compatible
Conditional decision
Negative decision
Initial reaction to the credit
crisis
Rescue and restructuring guidelines
Bank in difficulty
Rescue aid
6 months
Loan/guarantee for liquidity purposes
Restructuring aid
Restructuring plan for long-term viability
Avoidance of undue distortions of
competition
Divestment of assets, capacity reduction
Credit crisis measures
Systemic banking crisis: Article
87(3)(b) EC / Article 107(3)(b) TFEU
Commission communications
Rescue operations
Recapitalisation
Treatment of impaired assets
Temporary framework
Restructuring measures
Issues in State aid and the
credit crisis
Definitions
Market operator test: NAMA
Sale of bank assets: LloydsTSB
Bonus taxes: Bank payroll tax
State Aid definition
Intervention by the State resulting in an advantage
for an undertaking by mitigating the charges which
are normally included in its budget: Case 30/59,
Steenkolenmijnen v High Authority [1961] ECR 1,
p. 19.
Recipient receives an economic advantage which
it would not have obtained under normal market
conditions: Case C-39/94, SFEI v La Poste [1996]
ECR I-3547, para 60
Departure from a benchmark set of rules, or from a
normal burden, which confers an advantage: Case
C-66/02, Italy v Commission [2005] ECR I-10901,
per Advocate General Stix-Hackl at para 48.
State Aid and the Market
Operator Test – principles (1)
Would a private operator, in
possession of the same information
as the public authority, conduct the
same commercial transaction on the
same terms: Case C-457/00,
Belgium v Commission [2003] ECR
I-6931, para 47.
State Aid and the Market
Operator Test – principles (2)
All the relevant features of the measures
and their context must be examined,
including those relating to the situation of
the authority responsible for granting the
measures: Case T-196/04, Ryanair Ltd v
Commission [2008] ECR II-nyr, para 59.
always necessary to assess properly any
commercial reasons underlying the
transaction in question, especially where
there is a change from previous
commercial arrangements involving the
same parties, see, for example, Case T98/00, Linde v Commission [2002] ECR II3961.
State Aid and the Market
Operator Test – principles (3)
Comparison between the conduct of
public and private investors must be made
by reference to the attitude which a private
investor would have had at the time of the
transaction in question, having regard to
the available information and foreseeable
developments at that time: Cases
T-228/99 & T-233/99, Westdeutsche
Landesbank Girozentrale v Commission
[2003] ECR II-435, paras 244-246; Case
T-20/03, Kahla/Thüringen Porzellan
GmbH v Commission [2008] ECR II-nyr,
para 238.
Restructuring: sale of assets
Restructuring guidelines
Long term viability
Compensatory measures to avoid
distortions of competition
Significant own contribution
Ensuring competitive banking sector
State aid and Taxation
Selectivity: Where measure constitutes an
advantage for certain undertakings in
comparison with others which are in a
comparable legal and factual situation:
Cases C-182/03 & C-217/03, Belgium and
Forum 187 v Commission [2006] ECR I5479, para 119
Reference framework must be
determined: Case C-88/03, Portugal v
Commission [2006] ECR I-7115, para 56
Differentiation may be justified by the
nature of the general system: Case C143/99, Adria-Wien Pipeline [20-01] ECR
I-8365, para 42