By the Member State or through State Resources : The First Criterion of the Notion of State Aid pursuant to Article 107(1) TFEU

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Title: By the Member State or through State Resources : The First Criterion of the Notion of State Aid pursuant to Article 107(1) TFEU
Author: Laulajainen, Anette
Other contributor: Helsingin yliopisto, Oikeustieteellinen tiedekunta
University of Helsinki, Faculty of Law
Helsingfors universitet, Juridiska fakulteten
Publisher: Helsingfors universitet
Date: 2016
Language: eng
Thesis level: master's thesis
Discipline: Eurooppaoikeus
European law
Abstract: The aim of this Master's thesis is to assess how the first criterion of the notion of State aid laid down in Article 107(1) TFEU, that of aid having been granted by the Member State or through State resources, is interpreted. The purpose is to assess what the basic rules governing the interpretation and application of the criterion are, how the criterion has been interpreted and applied in practice, and what problematic aspects and challenges the application of the criterion has brought about. Instead of attempting to identify an exhaustive list of aid schemes in which the assessment of the criterion has been relevant, the focus of this thesis is on its interpretation through a series of interesting categories of aid schemes and recent examples of cases. The analysis of the research question relies primarily on the jurisprudence of the Court of Justice of the European Union. The main rule guiding the interpretation of the criterion is simple: it consists of two cumulative subconditions. In order to fulfil the public origin criterion, a measure must be imputable to the State and granted through State resources. The concept of State is interpreted broadly. Nevertheless, case law shows that the application of this test in practice is not necessarily as clear as it may seem. Although the Court of Justice of the European Union has rendered a number of significant judgments on the matter in recent years, what the first criterion of Article 107(1) TFEU actually means remains unclear. Aid schemes can be very complex in one way or another. For example, they might involve intermediary bodies or areas previously uncontested from the point of view of State intervention in terms of State aid control. Sometimes it can prove challenging to apply principles already laid down in case law to other schemes in a consistent manner. The difficulty of assessing public undertakings' actions in terms of the fulfilment of the criterion lies in the necessity of case-by-case assessments of whether the State has influenced an undertakings' actions. Applying the indicators for imputability in a clear, consistent and detailed way may prove challenging. It is evident that the issue of forgone revenue can be relevant in more creative schemes than one would think. The issue of private bodies and private resources involved in aid schemes is particularly problematic due to the fluctuating results it has led to and the seemingly illogical outcomes of cases with very similar circumstances and effects. One of the challenges regarding the interpretation of the criterion is finding a balance between the influence of the organisational model chosen by the State for the execution of an aid scheme and the influence of the effects of the measure on its categorisation as State aid. Another important issue surrounding the interpretation of the criterion is whether its second leg, the requirement of the use of State resources, should be abandoned. Nevertheless, no clear signs of a permanent shift towards this approach have been witnessed. For the moment, the general principles surrounding the interpretation of the criterion are not so clear as to remove the need for a detailed case-by-case analysis of whether measures fulfil the criterion or eliminate the risk of surprising results for stakeholders and Member States. Clearer guidance on the interpretation of the criterion would be more than welcome in order to improve legal certainty.

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