Netherlands: EC approval of COVID-19 related State aid annulled (CJEU General Court judgment)
CJEU General Court judgment annulled EC approval of COVID-19 related State aid
CJEU General Court judgment annulled EC approval of COVID-19 related State aid
The General Court of the Court of Justice of the European Union (CJEU) today annulled the approval by the European Commission (EC) of State aid in the context of the coronavirus (COVID-19) pandemic from the Netherlands to the taxpayer, an airline, amounting to €3.4 billion.
The case identifying information is: Ryanair v. Commission (KLM II; COVID-19) (T-146/22)
Background
As explained in a release [PDF 122 KB] from the CJEU:
- In 2020, the EC approved Netherlands State aid to the taxpayer consisting of a guarantee for a bank loan and a loan, amounting to €3.4 billion of aid. The objective was to provide the taxpayer with temporary liquidity in the context of the COVID-19 pandemic.
- However, in 2021, the General Court annulled the EC’s decision for failure to state reasons for the determination of the beneficiary of the aid.
- In July 2021, the EC adopted a new decision, in which it found that the aid was compatible with the internal market and that the taxpayer and its subsidiaries were the sole beneficiaries of the aid, to the exclusion of the other companies in the taxpayer’s broader multinational group.
General Court judgment
In the action brought before it by another airline, the General Court again annulled the approval of the aid, finding that the EC erred in excluding as beneficiaries of the aid other companies in the taxpayer’s broader multinational group.
The court examined the capital, organic, functional, and economic links between the companies in the taxpayer’s broader multinational group, the contractual framework on the basis of which the aid was granted, as well as the type of aid granted and the context in which it was granted, and ultimate concluded that other companies in the taxpayer’s broader multinational group were capable of benefiting, at least indirectly, from the advantage granted by the aid.
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