The extent and limits to the Commission’s duty to assess the compatibility of State aid measures with other rules of EU internal market law, and public procurement rules in particular, continues to heat up (see earlier comment here). According to the Court’s press release, today’s Opinion of AG Medina in Austria v Commission (Centrale nucléaire Paks II), C-59/23 P is bound to push for further clarification — or give another opportunity to the Court to fudge the issue.
The dispute arose in the context of Hungarian aid for the renovation of a nuclear plant, which resulted in the direct award of a contract to a Russian supplier in accordance with an agreement between Russia and Hungary on cooperation on the peaceful use of nuclear energy—and in a context where Russia also agreed under that agreement to provide Hungary with a State loan in order to finance the new reactors.
So this is very much a case of a procurement offset and against a clearly sensitive geopolitical background, but the point of law at its core is of broad significance for more ‘run of the mill’ State aid + procurement cases.
As the press release stresses,
According to [AG Medina], … the Commission, when assessing the aid at issue, should have examined whether the direct award to [the Russian supplier] of the contract for the construction of the new reactors is compatible with the European Union’s provisions on public contracts.
That award was in fact an aspect of the aid which had an inextricable link with that aid. According to the Advocate General, an inextricable link of that kind exists with regard to factors or conditions which are necessary for the attainment of the object of the aid or for its functioning, without which the planned State intervention cannot achieve the objectives that it pursues. In such a situation, the Commission is required to take into account, in assessing the compatibility of State aid with the internal market, a possible infringement of provisions of EU law other than those relating to aid.
Let’s see what the Court makes of this, and how a circle is squared if it decides to move beyond the confused and confusing stance it has taken on the issue so far.