European State Aid during COVID-19

Summary During the COVID-19 unexpected pandemic crisis, to minimalize socio-economic damages within the Member States, the European Commission has taken several steps to increase the flexibility of the support framework and include more diversified forms of aid and extended time-frames for granting them. Implementing urgent measures, in particular for the sectors that are mostly affected by the economic shock and unpredicted limitations pushed them to increase their resilience to be more stable for emergencies. In order to ensure the EU internal market is not fragmented and the level of playing field stays intact, as well as to avoid harmful subsidy races to the detriment of cohesion within the Union, the use of State Aid proved its necessity in various diversified forms of aid. The article discusses State Aid in the context of the global pandemic and tries to find out raised questions. © 2022 Turan Jafarli, published by Sciendo.

Pandemic and state aid measures: financially conditioned social rights implications

If the effective enjoyment of constitutionally enshrined and financially conditioned social rights depends above all on the spending limits imposed by the balanced-budget rule, they risk being sacrificed in the current macroeconomic landscape, characterized by the slack of public finance constraints due to the Covid-19 pandemic. State aid authorized by the European Commission with the Temporary Framework of 19 March 2020, although mainly intended for enterprises, could represent a precious opportunity to ensure the stability of the constitutional state and counter the progressive process of degradation of social rights. After a brief examination of the nature of the rights and incentive measures de quo, the present discussion intends to illustrate how the intention of financing the social welfare functions with such aid would remain a practicable way, provided, however, that effective implementation of the PNRR is given (pursuing the objectives of social justice, inclusion and economic and social cohesion) and that reforms focused on the spending review process and on the improvement of the public sector net borrowing are implemented. In fact, public administrations often do not have the possibility to provide welfare grants, beacuse they cannot take out loans of Recovery and Resilience Facility. © 2023, Societa Editoriale Federalismi s.r.l.. All rights reserved.

Neutrality and Equality Aspects in the EU State Aid Temporary Framework 2020: The Case of the Airline Industry

Following the declaration of the COVID-19 pandemic, the restrictions imposed by the Member States (MSs) of the European Union (EU) led the tourism and commercial air transport industry to face serious financial difficulties that required airlines to apply for state support. In March 2020, the European Commission adopted a State Aid Temporary Framework (TF) for the COVID-19 period to simplify the process of granting aid, allowing the MSs rapid economic interventions. Claims regarding the approval of State aid to certain airlines reached the EU General Court (EGC), on the grounds of violation of the fair competition principle. It became clear that the processes enabled by the TF dispensed unequal treatment to airline companies and that the flexibility of the TF created competition imbalances. In spite of these events, little attention has been given to the way its application ignores the requirements of EU State aid control and other procedural justice and fairness principles, by failing to ensure neutrality and equality. This article addresses the matter using a standard legal interpretive approach to explain the imbalances created by the regulation. It presents a systematic review of the current regime, identifies the TF inefficiencies affecting competition principles, and argues for specific adjustments that could enhance its transparency. These contributions are useful to improve the existing framework and help prepare for a better management of future crises. © 2022 Kevin Kasser et al., published by Sciendo.

The General Court's Decisions on State Aid Law in Times of COVID-19 Pandemic

The unprecedented crisis caused by the pandemic of Coronavirus disease 2019 (COVID-19) not only shattered the economics of the aviation industry, it also put to test long established legal rules, while Governments were desperately adopting emergency measures. Facing a very severe situation, caused by airspace closures and restrictions imposed to travellers, several European airlines received governmental support, while others did not. This led to criticisms from airlines, most notably from the low-cost carrier Ryanair, which transposed into legal actions undertaken in front of the General Court of the European Union. At the heart of this legal battle lay the rules governing State Aid, as the European Commission was criticized for not assessing thoroughly enough the measures that were notified by the Member States. The judgments of the General Court revealed that, irrespective of the exceptional situation faced in Europe, the correct application. of EU Law must prevail, which includes the judicial review of acts adopted by the European institutions. As two decisions of the Commission authorizing measures of governmental support were annulled, some lessons can be learnt for the future.

EU Competition Law: An Unaffordable Luxury in Times of Crisis?

The paper rejects arguments advanced in some quarters for a relaxation of EU competition policy to promote economic recovery. Economic theory and historical experience indicate that competition is likely to assist rather than impede recovery. While the Covid-19 induced recession necessitated increased State Aid, there is a serious risk that such aid will seriously distort competition within the internal market, given differences in the financial capacity of Member States to support businesses. The paper argues that policies designed to promote national champions and greater self-sufficiency are not justified and that action to secure reciprocal market access for EU exports is preferable to protectionist measures. An important lesson from the financial crisis is that actions based on immediate needs are a poor substitute for policy intervention based on sound economic analysis.