When is State Aid Allowed?

Once it has been established that the four criteria of the definition of state aid are fulfilled and the measure therefore constitutes state aid in the meaning of state aid rules, the measure may not be implemented before the European Commission has analysed the compatibility of the measure with the Common Market.

State Aid may be compatible with the Common Market in certain circumstances. Certain measures are always compatible with the Common Market (such as aid to cover the damage caused by natural disasters or exceptional occurrences) and some measures are compatible with the Common Market provided that they fulfill the criteria set out in the many state aid regulations, guidelines and frameworks. The Commission has provided inter alia a de minimis regulation, a general block exemption regulation (enabling aid for e.g. SMEs, research, innovation, regional development, training, employment, risk capital, and environmental protection), guidelines on national regional aid, and a framework regulation for state aid in the form of public service compensation. This series of legislative acts provide a number of exemptions and rests exclusively with the Commission, which possesses the investigative and decision-making powers within the EU. It is only after the approval of the Commission that an aid measure can be enforced and implemented. Moreover, the Commission has the power to recover incompatible state aid.

When an aid granting authority deems a measure to be state aid subject to state aid rules, the measure must be notified to the Commission. The Ministry of Economic Affairs and Employment assists in matters of legal interpretation, but each authority is responsible for assessing the state aid compatibility of a measure. A state aid notification is made electronically and in a coordinated manner through the Ministry. During the notification process, the Ministry also acts as the contact link between the national authorities and the Commission. In preparing aid schemes, authorities should take into account that the first phase notification procedure takes around four to six months. There is, however, no need to make an aid notification if the case involves de minimis aid or is covered by a block exemption. A summary of block exemption aids must be submitted to the Commission to be published in the Official Journal of the European Union.