Compatibility of the aid. Supposing that the contested funding constitutes aid within the meaning of Article 61(1) EEA, it must be assessed whether, as a result of the derogations in Article 61(2) and (3) EEA or other relevant rules, it can be declared compatible with the functioning of the EEA Agreement. None of the situations foreseen in Article 61(2) EEA can be applied to the present case. The region in question does not fall within the scope of Article 61(3)(a) EEA. Indeed, Decision No 327/99/COL on the map of assisted areas and levels of aid (Norway) notes that the Norwegian authorities have not claimed that Norway has any area eligible for regional aid under that paragraph. Moreover, the Authority notes that, while the contested funding is specifically intended to cover operational costs, the State Aid Guidelines, Chapter 25 relating to national regional aid, clearly that operating aid is normally prohibited. Such aid may only be granted in exceptional cases in regions eligible under the derogation in Article 61(3)
Compatibility of the aid. 3.1. Act No 28/2007 amending the Harbour Act Support measures caught by Article 61(1) of the EEA Agree- ment are generally incompatible with the functioning of the EEA Agreement, unless they qualify for a derogation under Article 61(2) or (3) of the EEA Agreement. The derogation in Article 61(2) of the EEA Agreement is not applicable to the aid in question, which is not designed to achieve any of the aims listed in this provision. The Authority notes, in particular, that the damage compensation to ship lifts provided for in Article 26(3), subparagraph 3, of the 2007 Harbour Act is no longer limited to natural disaster or exceptional occurrence. It therefore cannot be based on Article 61(2)(b) of the EEA Agreement. The aid is not given to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of Iceland, therefore Article 61(3)(b) of the EEA Agreement does not apply. The aid in question is not linked to any investment, but compensates recipients for a given damage. It reduces the costs which companies would normally have to bear in the course of pursuing their day-to-day business activities and is consequently to be classified as operating aid. Operating aid is normally not considered suitable to facilitate the development of certain economic activities or of certain regions as provided for in Article 61(3)(c) of the EEA Agreement, unless it is specifically envisaged by the Authority's Guidelines, which is not the case here. An application of the Regional Aid Guidelines in this regard does not appear possible. It would appear that the notified measure falls to be assessed under the Authority's Guidelines on Shipbuilding which, as a lex specialis, preclude the application of the regional aid chapter of the Guidelines (1). The Shipbuilding Guidelines cover aid to ‘any shipyard, related entity, ship owner and third party, which is granted, whether directly or indirectly, for building, repair or conversion of ships’. As can be seen from the Commission's case practice, aid for the construction or exten- sion of ship lifts is considered to be a measure falling under the Shipbuilding Guidelines (2). According to point 26 of the Guide- lines investment aid — not operating aid — can only be granted if it is linked to upgrading or modernising existing yards with a view to improving productivity and is limited to 22,5 % or 12,5 % aid intensity thresholds. The Icelandic authorities expli- citly state,...
Compatibility of the aid. The Norwegian authorities have argued that the transactions do not contain aid, and have not put forward arguments concer- ning compatibility. However, after assessing the likelihood that State aid may be involved in the transactions described above, it has to be considered whether any aid involved in the transac- tions could be compatible with the EEA Agreement under Article 61(3)(a)-(c) EEA. In the case of the sale of title numbers 1/152, 1/301 and 1/630 to Grunnsteinen, the information available to the Authority does not seem to indicate that any aid was granted to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment, to promote a project of common European interest or to facilitate the development of certain economic activities. Moreover, any aid granted to the sports club would not seem to promote cultural development. Against that background, Article 61(3)(a)-(c) appears to be inapplicable. For the same reasons, any possible aid involved in the sale of title number 4/165 to Bryne Industripark and the sale of title numbers 2/70 and 2/32 to Bryne FK does not seem to be compatible with the functioning of the EEA Agreement by virtue of Article 61(3)(a)-(c).
Compatibility of the aid. Supposing that the contested funding constitutes State aid within the meaning of Article 61(1) EEA, it must be assessed whether it can be declared compatible with the functioning of the EEA Agreement. In the Authority's view, the support scheme does not seem to comply with any of the exemptions provided for in Article 61(2) or (3)(a) or (b) of the EEA Agreement. The question is therefore whether the aid can be justified under Article 61(3)(c). Accor- ding to this provision aid may be declared compatible with the common market if it ‘… facilitates the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest’. The Authority will assess the support scheme according to Article 61(3)(c) of the EEA Agreement in conjunction with the Authority's State Aid Guidelines, in particular the chapters on aid for environmental protection and aid for research and deve- lopment and innovation (3). It is to be noted that the Norwegian authorities have not specifi- cally invoked this provision, nor have they provided any expla- nation of how the contested aid measure ‘does not adversely affect trading conditions to an extent contrary to the common interest’. However, in their comments on the complaint the Norwegian authorities refer to Commission Decision No 369/05, where the Commission, inter alia held that aid granted to owners of dwel- ling houses for the conversion from direct-acting electro heat into district heating or heat pumps, could be authorised on the basis of point 30 of the Commission's Environmental Aid Guidelines (4).
Compatibility of the aid. The Authority has assessed the two potential aid measures under Article 61(3) of the EEA Agreement. With regard to the sale of the air base, the Authority has also assessed the measure in combination with the State Aid Guidelines, Chapter on State aid elements in sales of land and buildings by public authorities.
Compatibility of the aid. The Authority cannot declare State aid compatible with the functioning of the EEA Agreement, if that aid would infringe other provisions of the EEA Agreement. SBV submitted in its initial complaint that the ‘Housing Financing Fund is incompatible with the EEA Agreement, in particular the competition rules, the rules on State aid, free movement of services, capital and the freedom of establishment’. In relation to the competition rules, the free movement of services, capital and the freedom of establishment, the Authority assessed these allegations and restated in its annulled Decision that they were unfounded. With regard to the alleged infringement of some of ‘the four freedoms’, the Authority found that it was the State aid which created the possible hindrances to the free movement of services, capital and establishment. The effect of these possible hindrances was indissolubly linked to the objective of the State aid. Therefore, the Authority concluded that the case should be assessed under the lex specialis of the State aid rules and that the rules on the ‘four freedoms’ should not be applicable (3). This view was confirmed by the EFTA Court in this judgment of 7 April 2006, when it held that: ‘With regard to the effects that the HFF general loans scheme may have on the free movement of services and capital and the right of establishment, the Court holds that any such effects would indeed seem inherent in the State-supportive elements of the HFF system and therefore are so indissolubly linked to the object of the aid that it is impossible to evaluate them separately (see to this effect Case 74/76 Xxxxxxxx S Volpi SpA v Xxxxx Xxxxx Xxxxxx [1977] ECR 557, at paragraph 14).’ (4) With regard to the alleged infringement of the competition rules (the complainant alleged in particular an infringement of Articles 59(1) and 54 of the EEA Agreement), the Authority stated in the annulled Decision that SBV's complaint did not warrant the initiation of formal proceedings, since SBV did not substantiate that the HFF abused or will abuse its position as a consequence of the legislative framework by which it was governed. In light of the above, it is the Authority's preliminary view that it sees no reasons why it should deviate from it original assessment on these points.
Compatibility of the aid. With respect to Article 61(2) of the EEA Agreement, it appears that none of the exceptions under this Article apply in the present case as none of the measures possibly involving State aid in favour of Mesta AS has been aimed at the objectives listed in those provisions. With respect to Article 61(3)(a) of the EEA Agreement, a State aid measure is considered compatible with the functioning of the EEA Agreement under this provision when it is designed to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemp- loyment. However, the measures which may involve State aid to Mesta AS are neither destined for such areas nor are they designed for this purpose. This provision is therefore not rele- vant. The exception in Article 61(3)(b) of the EEA Agreement does not apply to the present case either since any State aid granted to Mesta AS is not intended to promote the execution of an important project of common European interest nor to remedy a serious disturbance in the economy of Norway. The exception laid down in Article 61(3)(c) of the EEA Agree- ment which provides that State aid may be considered compa- tible with the common market where it facilitates the develop- ment of certain economic activities or of certain economic areas may be relevant. For purposes of assessing the compatibility of the restructuring and reorganisation measures — except for those related to moving, commuting, moving offices and the transfer of archives — the Commission's decision practice is relevant. In the context of assessing compatibility of pension schemes, the Commission has considered that a partial relief of the financial burden on a company resulting from pension rights, acquired by employees in the past, and exceeding those provided under generally appli- cable pension regimes, could be declared compatible. The Commission's conclusion in this regard was motivated by the
Compatibility of the aid. In the following, the Authority will assess the potential justification grounds put forward by the Norwegian authorities, i.e. that the measure can be justified as public service compensation under Article 59(2) EEA, or, alternatively, as an emergency measure to ensure a continuous service until a new tender procedure could take place. Finally the Norwegian authorities have referred to the measure as a rescue and restructuring measure within the meaning of Article 61(3)(c) and the relevant Authority Guidelines. It follows from Article 4 of the Maritime cabotage regulation and Section 9 of the Authority’s Guidelines on Maritime transport that EFTA States may impose public service obligations or conclude public service contracts for certain maritime transport services provided that the compensation fulfils the rules of the EEA Agreement and the procedure governing State aid.
Compatibility of the aid. The Norwegian authorities have argued that the financing of the fitness centre at the KLC, as far as it is held to constitute State aid within the meaning of Article 61(1) of the EEA Agreement, must be considered to be compatible either as compensation for providing a service of general economic interest on the basis of Article 59(2) of the EEA Agreement, or alternatively as a cultural measure on the basis of Article 61(3)(c) of the EEA Agreement.
Compatibility of the aid. Article 61(3)(b) EEA enables the Authority to declare aid compatible with the functioning of the EEA Agreement if it has the effect ‘to remedy a serious disturbance in the economy of an EC Member State or an EFTA State’. The Authority recalls that, in line with the case law of the Court of Justice and the decision making practice of the European Commission (hereinafter referred to as the Commission), Article 61(3)(b) needs to be applied restrictively and must tackle a disturbance in the entire national economy (1). The Authority recognises that the Mortgage Loan Scheme was adopted amid the current international financial crisis. In Iceland, small saving banks faced liquidity problems as a result of financial difficulties of the larger banks, which traditionally provided funding to the saving banks’ sector. Unlike the larger financial undertakings, the saving banks did not have direct access to funding by the Central Bank. In line with the Authority’s Guidelines on the application of State aid rules to measures taken in relation to financial institutions in the context of the current global financial crisis, the Authority considers that this measure falls to be assessed under Article 61(3)(b) EEA. In order to be declared compatible with the EEA Agreement, the aid must be granted on the basis of non- discriminatory criteria, be appropriate in terms of being well targeted to remedy a serious disturbance in the economy and be necessary and proportionate thereto, limiting negative spill-over effects for competitors. The Impaired Assets Guidelines (2) (the ‘IAG’) translates these general principles into conditions specific for impaired asset relief. The Authority considers that the appropriate framework for assessing the compatibility of the measure is the IAG. The IAG define impaired assets relief as all measures whereby a bank is dispensed from the need for severe downward value adjustments of certain asset classes. This is also the cases for the present measure. Therefore the Mortgage Loan Scheme must fulfil the conditions for the compatibility of assets relief as set out in the IAG.