Unclear Legal Position of the Standstill Obligation in Light of Legal Certainty and the Protection of Legitimate Expectations

Sammanfattning

This thesis examines the intersection of EU procedural law and EU State aid law, focusing on the systemic friction between the enforcement of the Standstill obligation and the principles of legal certainty and the protection of legitimate expectations. The first purpose is to identify the legal implications regarding the Standstill obligation under Article 108(3) TFEU when the procedure set out in Article 108 TFEU has been followed, and pursuant to this, the Member State has implemented the measure, but the positive authorization decision by the European Commission is subsequently annulled by the EU Courts. The thesis concludes that the annulment by the EU Courts has a retroactive effect on the positive authorization decision. Subsequently, the already implemented State aid pursuant to the positive authorization decision is deemed to have been unlawfully implemented, and the beneficiary is thus obligated to repay the aid with interest from the date of implementation. This raises concerns about legal certainty and legitimate expectations. The second purpose of this thesis is to assess whether the beneficiary of an already implemented State aid measure, which was authorized through a positive European Commission decision in which the Member State followed the correct procedure set out in Article 108 TFEU, but the positive authorization decision is subsequently annulled by the EU Courts, can plead the principles of legal certainty and the protection of legitimate expectations in order to prevent the recovery of such aid. In order to answer this question, the thesis deploys the assessment developed by Xavier Groussot and concludes that the beneficiary of the implemented State aid measure cannot rely on these principles, as a plea in law, to prevent recovery. The main reason for this conclusion is that the beneficiary's competitors would not have adequate judicial protection, and in particular, their right to an effective remedy would be rendered non-existent. These findings raise critical questions regarding the efficacy of the EU State aid framework. In circumstances requiring immediate liquidity, particularly during periods of crisis, the current framework appears insufficient to handle the expeditious response necessary for aid measures to achieve their intended impact. One suggestion for reform is for the Commission to inform beneficiaries, when authorizing a proposed measure by a Member State, that the wording of the Standstill obligation in reality implies that the final decision needs to become definitive. This would not resolve the issue of circumstances requiring immediate liquidity, but it would at least eliminate any legitimate expectations on the part of the beneficiary.