Recent CJEU and GC views on the "economic advantage" element in State aid cases (C-559/12 and T-150/12)

In two recent cases, the Court of Justice of the EU (CJEU) and the General Court (GC) have reassessed the element of "economic advantage" required in the prohibition of State aid in Art 107(1) TFEU in connection with State guarantees in France and Greece. The element of advantage has ranked rather high in the list of issues recently submitted to public consultation by the European Commission as part of the forthcoming new Notice on the concept of State aid. Hence, it seems interesting to have a look at these cases.

Firstly, in its Judgment of 3 April 2014 in case
C-559/12 France v Commission (La Poste), the CJEU assessed the Commission's previous findings regarding the existence of an unlimited guarantee granted by the French State to its postal operator (La Poste) as part of its status as an establishment of an industrial and commercial character (établissement public à caractère industriel et commercial, ‘EPIC’)--which entails a number of legal consequences, including the inapplicability of insolvency and bankruptcy procedures under ordinary law--and which ultimately constituted State aid within the meaning of Article 107(1) TFEU. The Commission's assessment had been endorsed by the GC (see comment here). The CJEU concurs with the substantive assessment of both the Commission and the GC in an interesting reasoning (and after having addressed a number of issues concerning the burden of proof that, in the end, remain largely marginal in view of the consolidation of a presumption of advantage in the case of unlimited State guarantees):
94 [...] it must be borne in mind that the concept of aid embraces [...] measures which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which, therefore, without being subsidies in the strict sense of the word, are similar in character and have the same effect [...] Also, State measures which, whatever their form, are likely directly or indirectly to favour certain undertakings or are to be regarded as an economic advantage which the recipient undertaking would not have obtained under normal market conditions, are regarded as aid [...].
95 Since State measures take diverse forms and must be analysed in terms of their effects, it cannot be ruled out that advantages given in the form of a State guarantee can entail an additional burden on the State
96 As the Court has already held, a borrower who has subscribed to a loan guaranteed by the public authorities of a Member State normally obtains an advantage inasmuch as the financial cost that it bears is less than that which it would have borne if it had had to obtain that same financing and that same guarantee at market prices
97 From that point of view, moreover, the Commission Notice on the application of Articles 
[107 and 108 TFEU] to State aid in the form of guarantees specifically provides[...]
that an unlimited State guarantee in favour of an undertaking whose legal form rules out bankruptcy or other insolvency procedures grants an immediate advantage to that undertaking and constitutes State aid, in that it is granted without the recipient thereof paying the appropriate fee for taking the risk supported by the State and also allows better financial terms for a loan to be obtained than those normally available on the financial markets.
98 It is apparent,
a simple presumption exists that the grant of an implied and unlimited State guarantee in favour of an undertaking which is not subject to the ordinary compulsory administration and winding-up procedures results in an improvement in its financial position through a reduction of charges which would normally encumber its budget.
99 Consequently, in the context of the procedure relating to existing schemes of aid, to prove the advantage obtained by such a guarantee to the recipient undertaking,
it is sufficient for the Commission to establish the mere existence of that guarantee, without having to show the actual effects produced by it from the time that it is granted (C-559/12 at paras 94 to 99, emphasis added).
Secondly, in its Judgment of 9 April 2014 in case T-150/12 Greece v Commission (aid to cereal production), the GC has also assessed a Greek guarantee scheme to cereal producers and has upheld the Commission's view whereby the conditions attached to such guarantee--i.e. initially, the acceptance of crops as collateral (although the existence of the guarantee rights and the conditions for their execution were not automatic) and later the potential charge of a 2% premium (again, which charge was not automatic)--did not dissipate the existence of an economic advantage for the beneficiaries of the guarantee scheme. The reasoning of the GC (in French) in paras 82 to 97 is interesting to grasp the unconditionality required of any measures intended to eliminate the (presumed) advantage that State guarantee schemes provide.
In my view, both Judgments are in line with the content of the Commission's Draft Notice on the concept of State aid (and, in particular, paras 111 to 117) and it seems now clear that unlimited State guarantees or State guarantees without actual (automatic) conditions (such as collateral and premia to be paid by the beneficiaries) will be ruled as being against Art 107(1) TFEU as a result of the iuris et de iure presumption of their conferral of an advantage.

CJEU follows AG Jääskinen in revisiting PreussenElektra and minimising Doux Elevages' requirements for State imputability of aid measures (C-262/12)

In its Judgment of 19 December 2013 in case C-262/12 Vent De Colère and Others, the Court of Justice of the EU has largely followed AG Jääskinen's Opinion (commented here) and confirmed that, under Article 107(1) TFEU, a mechanism for offsetting in full the additional costs imposed on undertakings because of an obligation to purchase wind-generated electricity at a price higher than the market price that is financed by all final consumers of electricity in the national territory constitutes an intervention through State resources and, consequently, is under the general prohibition of State aid.
This Judgment must be welcomed, particularly because the CJEU follows the submission made by the AG, who considered that consumer contributions amounted to the existence of 'State resources', due to 'the fact that these resources constantly remain under public control and, therefore, are available to the competent national authorities, [which] suffices to qualify them as State funds to finance the measure, which then falls within the scope of Article 107(1) TFEU' (para 34 of his Opinion, own translation from Spanish).
Indeed, the CJEU has reviewed the characteristics of the body administering the funds paid by consumers (a public body under effective State supervision) and has stressed that
33 […] the sums thus managed by the Caisse des dépôts et consignations must be regarded as remaining under public control.
34 All those factors taken together serve to distinguish the present case from that which gave rise to the judgment in PreussenElektra, in which the Court held that an obligation imposed on private electricity supply undertakings to purchase electricity produced from renewable sources at fixed minimum prices could not be regarded as an intervention through State resources where it does not lead to any direct or indirect transfer of State resources to the undertakings producing that type of electricity (see, to that effect, PreussenElektra, paragraph 59).
35 As the Court has already had occasion to point out – in paragraph 74 of the judgment in Essent Netwerk Noord and Others – in the case which gave rise to the judgment in PreussenElektra, the private undertakings had not been appointed by the Member State concerned to manage a State resource, but were bound by an obligation to purchase by means of their own financial resources.
36 Consequently, the funds at issue [in PreussenElektra] could not be considered a State resource since they were not at any time under public control and there was no mechanism, such as the one at issue in the main proceedings in the present case, established and regulated by the Member State, for offsetting the additional costs arising from that obligation to purchase and through which the State offered those private operators the certain prospect that the additional costs would be covered in full.
37 Accordingly, Article 107(1) TFEU must be interpreted as meaning that a mechanism for offsetting in full the additional costs imposed on undertakings because of an obligation to purchase wind-generated electricity at a price higher than the market price that is financed by all final consumers of electricity in the national territory, such as that resulting from Law No 2000-108, constitutes an intervention through State resources (C-262/12 at paras 33 to 37, emphasis added).
In my view, the Vent De Colère Judgment advances in the functional approach to State aid and consolidates a general criterion of State control that should reduce the uncertainty surrounding the imputability to the State of (indirect) support measures through consumer contributions. The distinction with PreussenElektra is also rather clear now.
The only hurdle that remains in the way of such truly functional approach is the issue of imputability as addressed in Doux Élevages particularly in relation with (pseudo)fiscal measures (something that AG Jääskinen had addressed in  paras 50-54 of his Opinion but the CJEU felt no need to discuss in Vent De Colère). Hopefully, the CJEU will also minimise Vent De Colère on that point some time soon.