The General Court of the European Union rejected the appeal of the airline Wizz Air Hungary against the decision of the European Commission to authorise public rescue aid for the Romanian company TAROM (a reimbursable loan of 36.6 million euros) under the Guidelines on State aid to undertakings in difficulty, in a judgment delivered on Wednesday 4 May (Case T-718/20).
In its judgment, the Court clarifies the examination of the compatibility of rescue aid with the internal market with regard to the condition that such aid must contribute to an objective of common interest.
According to the European judge, the Member State concerned must demonstrate that the public aid is intended to prevent social hardship or address significant market failure, but it is not required to establish that, in the absence of the aid, certain negative consequences would necessarily occur, but only that they would be likely to occur.
Thus, in the Court’s view, given the poor state of the Romanian road and rail infrastructure, the Commission was entitled to consider that the regional connectivity by means of the domestic air routes and the international connectivity provided by TAROM constituted a service whose interruption was likely to cause serious social hardship or to constitute a market failure within the meaning of the Guidelines (point 44).
‘One time, last time’ condition. For the first time, the Court analyses the ‘one time, last time’ condition of aid for rescuing companies in difficulty.
In particular, the Guidelines provide that, where an undertaking has already received such aid, the Commission will authorise new aid only if at least 10 years have elapsed (1) since the previous aid was granted, (2) since the previous restructuring period ended, or (3) since implementation of the previous restructuring plan has ceased.
TAROM had benefited until 2019 from the implementation of restructuring aid in the form of a loan and several guarantees for other loans taken out. This aid was granted between 1997 and 2003 and the loan guarantees were all called immediately after they were granted. Since the actual transfer of resources is not decisive for determining the date which the aid was granted, the Court is of the opinion that assumption (1) was established.
As regards assumptions (1) and (2), the Court notes that the concept of “restructuring period” refers to the period during which restructuring measures are taken, which is, in principle, distinct from the period during which a State aid measure accompanying those measures is implemented. According to the Court, Wizz Air Hungary has not provided evidence that the previous restructuring period ended less than 10 years before the granting of the notified aid measure.
See the judgment: https://aeur.eu/f/1hm (Original version in French by Mathieu Bion)