CJEU Dismisses Case Contesting Paks II State Aid

EU

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The Court of Justice of the European Union (CJEU) on Wednesday dismissed an action by Austria contesting the European Commission's approval of investment aid for an upgrade of Hungary's Paks nuclear power plant, according to a report by state news wire MTI.

Austria had argued that Hungary's direct award of the project to a Russian contractor in the framework of an agreement involving EUR 10 billion of credit from Russia violated European Union rules on public procurement. The EC had cleared the aid, subject to conditions, citing a provision in the Treaties that allows aid for certain economic activities as long as it "does not adversely affect trading conditions to an extent contrary to the common interest".

"Assuming that a tender procedure may have had an influence on the amount of the aid, which Austria has not proven, such a factor would not by itself have had any effect on the advantage which that aid constituted for its recipient," the CJEU said in a statement on the decision.

CJEU also rejected allegations of "disproportionate distortions of competition and unequal treatment", resulting in the exclusion of producers of renewable energy from the deregulated internal electricity market, noting that member states are free to decide the composition of their own energy mix, while the EC cannot require that state financing be allocated to alternative energy sources.

EC cleared the aid for the construction of two blocks at the Paks plant, Hungary's sole commercial source of nuclear energy, in the spring of 2017.

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