Proposal: European Court of Justice should annul ECʼs state aid decision

Issues

The European Court of Justice should annul a 2008 decision by the European Commission which declares that state aid – in contravention of single market rules – has been awarded by Hungary to a local power station, Dunamenti Hőeromű, in central Hungary, through long-term power purchase agreements with Hungarian state-owned wholesaler MVM, advocate general of the Court Melchior Wathelet proposed in his opinion delivered today.

Wathelet also proposed to set aside a first instant ruling last year of the General Court of the European Court which upheld the Commissionʼs decision.

Earlier, several power stations in Hungary filed complaints against the European Commissionʼs decision, but, except for Dunamenti, they either withdrew their complaints, or did not appeal the first instance rulings against them.

But Dunamentiʼs appeal should be upheld because the General Court refused to take into account the intrinsic link between the power purchase agreements and privatization when reviewing the Commission’s application of the private investor test solely because the privatization of Dunamenti in 1995 preceded Hungary’s EU accession in 2004, the advocate general said.

In Dunamentiʼs case, the advocate general proposed to order the European Commission to pay the costs both at first instance and on appeal.

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