State Aid (EU)
State Aid (EU) : Article 87, TEC (new Article III-56) states that "any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favoring certain undertakings or the production of certain goods shall, insofar as it affects trade between Member States, be incompatible with the common market". The European Commission and the Court of Justice have placed a very broad interpretation on the concept of "aid" as regards the body granting it, which may range from the State itself to a regional or local authority, from a body over which the State directly or indirectly exerts a decisive influence to a private-sector enterprise or a public corporation, etc. Accordingly, any advantage conferred by the State is regarded as state aid where it: (1) confers an economic advantage on the recipient; (2) is granted selectively to certain enterprises or products; (3) may distort competition; (4) Affects trade between Member States. The prohibition applies to a whole panoply of aid measures, whether direct (grants) or indirect (e.g. measures that relieve an enterprise of financial charges) and regardless of their basis or purpose. However, an absolute prohibition of state aid is impossible and Article 87.2 and 87.3, TEC, provides for a number of exemptions for aid that is compatible with the common market and for aid that may be compatible under certain conditions. On the basis of Article 88, TEC (new Article III-56), the procedural Regulation on state aid stipulates that any aid or any aid scheme must be notified to the Commission and approved by it before being implemented. However, the prior notification requirement is relaxed by the Regulation on horizontal state aid, which authorizes the Commission to exempt by way of regulation certain categories of aid including training aid, employment aid, aid for small and medium-sized enterprises, and aid of minor importance. By drafting new Community guidelines and frameworks, the Commission has clarified the conditions under which other forms of state aid pursuing horizontal objectives such as regional development aid, environmental aid and research aid may be granted
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