The presence of State aid. 1.1. State aid within the meaning of Article 61(1) EEA Agreement Article 61(1) of the EEA Agreement reads as follows: ‘Save as otherwise provided in this Agreement, any aid granted by EC Member States, EFTA States or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the produc- tion of certain goods shall, in so far as it affects trade between Contracting Parties, between Contracting Parties, be incompa- tible with the functioning of this Agreement’. Aid falling within this provision is, as a rule, incompatible with the EEA Agreement and hence prohibited, provided that the following four conditions are fulfilled:
