Is national financial development a violation of EU laws?

By K. Damaskou

The ECJ of EUropa.S 2016 started with a slight irritation from the President’s side, since some of the judges arrived late in the courtroom. The applicance’s expert was absent during the whole session, but the trial, began nevertheless.

The commission claimed that due to the financial aid and tax policy that the the Spanish government offered to Air Andaluz these last 30 years, several articles of the TEU were violated and led to the serious economic damage of the Italic airline company Air Albino.

Mrs Kavalieratou, the first applicant, started by claiming that Spain definitely violated the EU law,  in particular article 107 (2a) TEU, and led to the monopoly of the Spanish airline company.  “Spain’s actions are an offense to the EU laws” is what the applicant claimed.  The commission highlighted the fact that since Spain joined the EU, the country has to comply with the Union’s rules and not promote national companies so eagerly, “eliminating” other airline companies. Of course, the Air Andaluz “accident” was one of the applicance’s strongest arguments and was thoroughly mentioned by their witness, Mrs Rouvali.  

The main and most discussed argument of the defendance, concerned the financial aid that was offered to Air Andaluz by the Spanish government, which was under the ground of the country’s economic crisis. The country’s need of a financial boost made the support of the national airline by the government necessary. However, the defendance strongly opposed to the claims that there are “strong ties between the company and the government”. Nevertheless, the judges were rather skeptical about these statement.

The defendance insisted that since the Commission did nothing these last 30 years and because all these actions that could be characterized as “harmful” for the Competition european law, took place in order to revitalize national economy therefore they were not by any means illegal. Then Mr Karanikas, the Advocate General asked a quite heated question as to whether the Commission didn’t detect the violation, was there no violation at all?  The defendance also brought up the example of Tenerife, which, as their witness the mayor of Tenerife claimed, “thrived” financially after the dominance of the Spanish airline.

Many questions, and even more objections were raised. The judges went quite hard on both the defendance and the applicance. The main dilemma that was most focused on, was whether a Member state’s national economy welfare can justify a few EU laws’ violations. So we all wait to see… Will there be a crisis?   

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