DG State Aid – Control and Regeneraton of Deprived Urban ... - REVIT

In cases where market forces alone do not result to a satisfactory provision of such
services, financial support from the State intended to cover some or all of the
specific costs resulting from the public service obligations may prove necessary, so
that the undertakings entrusted with SEIG can operate under conditions that enable
them to fulfil their missions.
In the judgement of the case Altmark Trans GmbH 36 the Court of Justice of the
European Communities held that public service compensation does not constitute
state aid within the meaning of Article 87 EC Treaty provided that four criteria are
met:
– The recipient undertaking is actually required to discharge public service
obligations, and those obligations must be clearly defined.
– The parameters on the basis of which the compensation is calculated must be
established in advance in an objective and transparent manner.
– The compensation cannot exceed what is necessary to cover all or part of the
costs incurred in the discharge of public service obligations, taking into account
the relevant receipts and a reasonable profit.
– Where the undertaking, which is to discharge public service obligations, is not
chosen pursuant to a public procurement procedure which would allow for the
selection of the tenderer capable of providing those services at the least cost to
the community, the level of compensation must be determined by a comparison
with an analysis of the costs which a typical well run and adequately equipped
undertaking would incur in discharging these obligations, taking into account the
relevant receipts and a reasonable profit for discharging the obligations.
Where these four criteria are met, public service compensation does not constitute
state aid, and therefore Articles 87 and 88 of the EC Treaty do not apply. However, if
these criteria are not respected and if the general criteria for the applicability of
Article 87(1) EC Treaty are met, public service compensation constitutes state aid
that is subject to Articles 73, 86, 87 and 88 of the EC Treaty. Such state aid may be
declared compatible with the EC Treaty under Article 86(2) if it is necessary to the
operation of the SGEIs and does not affect the development of trade to such an
extent as would be contrary to the interests of the Community.
The Commission’s Decision 37 (based on Article 86(3) of the EC Treaty) specifies the
conditions under which compensation to companies for the provision of public
services is compatible with state aid rules (a clearly defined public service mandate
and no over-compensation) and does not have to be notified to the Commission in
advance. The Decision is applicable to compensation of less than EUR 30 million per
year provided its beneficiaries have an annual turnover of less than EUR 100 million.
Compensation granted to social housing for services of general economic interest
also benefits from the Decision irrespective of the amounts involved: this will enable
36
Case C-280/00, Altmark Trans GmbH and Regierungspräsidium Magdeburg v Nahverkehrsgesellschaft
Altmark GmbH, ECR 2003 p. I-07747.
37 Commission Decision of 28 November2005 on the application of Article 86(2) of the Treaty to State aid in the
form of public service compensation granted to certain undertakings entrusted with the operation of services of
general economic interest, OJ L 312, 29.11.2005, p. 67-73:
http://www.europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2005/l_312/l_31220051129en00670073.pdf
9