In her Opinion on Case C-59/23 P, which was published on Thursday, 27 February, Advocate General Laila Medina of the Court of Justice of the European Union (CJEU) proposed setting aside the General Court’s judgment in Case T-101/18 confirming the European Commission’s decision to approve €12.5 billion in Hungarian State aid for the construction of two new nuclear reactors in the town of Paks (‘Paks II’ project).
The construction contract had been awarded to the Russian company Nizhny Novgorod Engineering, without a call for tenders, as part of a bilateral agreement between Budapest and Moscow, which provided for a Russian state loan worth €10 billion to finance the project.
Approved by the European Commission in 2017 (see EUROPE 11739/21), the Hungarian aid had been contested by Austria, which considered that it distorted the principle of fair competition by strengthening the dominant position of MVM Hungarian Electricity, operator of the Paks power plant, on the electricity market. Vienna also noted disapprovingly that the absence of a public procurement procedure infringes EU rules. After an initial dismissal by the General Court in 2022 (see EUROPE 13074/36), Vienna had appealed to the CJEU.
However, according to [a press release for] the Opinion presented by Advocate General Laila Medina, the European Commission should have examined whether directly awarding the contract was “compatible with the European Union’s provisions on public contracts”. In fact, she explained that choosing Nizhny Novgorod Engineering as the company responsible for the construction work “was an integral part of the intergovernmental agreement” and that the loan that Russia granted Hungary “was linked to such a choice”—stressing that the European Commission could not ignore this aspect when examining the matter.
Laila Medina also took the view that the General Court did not adequately review the European Commission’s assessment of the proportionality of the Hungarian State aid. [The European Commission] only included a simple reference to previous proceedings without providing a detailed justification as to why it considered that no infringement of the rules on public contracts had occurred. “That decision did not provide a sufficient statement of reasons on that issue”, found the advocate general.
See Laila Medina’s Opinion: https://aeur.eu/f/fov (Original version in French by Justine Manaud)