Approval of aid to the Øresund Link to be investigated again

The General Court's judgment of 19 September 2018 in case T-68/15 (concerning the European Commission's decisions in cases SA.36558, SA.38371 and SA.36662)

By assistant attorney Simon Christensen

Background

In 1991, the Danish and Swedish governments entered into an agreement on the Øresund Link between Denmark and Sweden. The Øresund Link is owned by the consortium Øresundsbro Konsortiet (the "Consortium"), which again is owned by a Danish company and a Swedish company. The Consortium owns, planned, financed, constructed and operates the Øresund Link. 

In connection with the financing of the Øresund Link, the Danish and Swedish governments issued state guarantees covering the financing. In addition, the Consortium benefits from various tax advantages in Denmark, including the carrying forward of losses, depreciation of assets, and a joint taxation scheme. 

The European Commission was informed of the state guarantees in 1995 and concluded that they did not constitute state aid because they were attached to an infrastructure project of public interest. According to the Commission, the Øresund Link would improve the countries' infrastructure and was therefore a public asset.

The European Commission’s decision

In 2013, HH Ferries lodged a complaint with the Commission alleging that the state guarantees constituted state aid that was unlawful and therefore incompatible with the internal market. 

The Commission concluded, however, that the tax aid (apart from the Danish joint taxation scheme, which in the opinion of the Commission did not constitute state aid) and the guarantees granted by Denmark were compatible with the internal market. However, the aid granted by Sweden was existing aid, because it was granted before Sweden joined the European Union. Consequently, it was not necessary to investigate the aid any further.

The decision was made without initiating a formal investigation procedure.

The General Court's annulment of the European Commission's decision

The case was then brought before the General Court in 2015. HH Ferries argued that the Commission's examination of the compatibility of the state aid with the internal market was insufficient and incomplete.

The General Court found that various issues had not been properly examined by the Commission. According to the General Court, the failure to investigate was due to the fact that the Commission had encountered difficulties in qualifying:

• when the guarantees were granted;
• the number of guarantees granted;
• whether the guarantees constituted new aid or existing aid; 
• whether the state aid was compatible with the internal market. 

Therefore, the Commission ought to have initiated a formal investigation procedure to examine above issues.

However, since the Commission did not initiate such procedure, the General Court annulled the Commission's decision and referred the case back to the Commission for further consideration.

Read the judgment.