The Gordian Knot of State Aid: When State Aid Is Inextricably Linked

Abstract

When State aid decisions are contested before the Court of Justice of the European Union, the beneficiary may face the risk of having to reimburse the aid to the State. Legal certainty in the area of State aid is crucial – not only for the recipient, but also for the broader EU economy, particularly given the increasingly competitive and complex global environment. This article analyses the CJEU’s approach to interpreting Article 108 TFEU, especially in light of its obligation to avoid outcomes that conflict with the specific provisions of the Treaty. The analysis is prompted by the landmark judgment in Case C-594/18 P, Republic of Austria v European Commission, in which the Court appeared to dismiss the need for an inextricable link when assessing State aid in relation to environmental matters. This raises the question of whether similar reasoning could apply to other areas of EU law. While the Hinkley Point C case introduces further ambiguity, the principal aim of this article is to examine various dimensions of the issue of inextricable links between State aid and different provisions of EU law.