Edited By Sofia Oliveira Pais
Part III. State Aid: New Regulations
Part III state aID: new regulatIons 197 The evolution of the “effects on trade” and “distortion of competition” requirements under the EU State aid regime Manuel Fontaine camPos1 Introduction The EU Court of Justice considers since Altmark that the effects of an aid consisting in the distortion or threat of distortion of competition and disturbance of trade between Member States are part of the State aid concept, under Article 107(1) of the TFEU. A State that wishes to grant aid will only be subject to the requirement of notification to the European Commission and to the obligation of non-implementation of the aid (pending a Commission decision) provided that the aid fulfils those re- quirements. Recently, a commentator considered that “the most funda- mental defect in the Commission’s State aid practice is that when it finds that a measure is selective, it assumes almost automatically that it distorts competition, although this assumption is not justified”.2 To realize the extent to which such situations may happen it is necessary to determine the exact content of those requirements. That is the object of this paper. 1. The meaning of “effects on trade” and “distortion of competition” according to the text and legislative context of Article 107(1) The Treaty establishing the European Coal and Steel Community did not condition the ban of subsidies and State aid to effects on trade and distortion of competition. The aid was prohibited – Article 4(c) – without the need to demonstrate the production of any effects.3...
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