Compatibility of the aid. Support measures caught by Article 61(1) of the EEA Agreement are generally incompatible with the functioning of the EEA Agreement, unless they qualify for a derogation in Article 61(2) or (3) of the EEA Agreement. The derogation of Article 61(2) is not applicable to the aid in question, which is not designed to achieve any of the aims listed in this provision. Nor does Article 61(3)(a) or Article 61(3)(b) of the EEA Agreement apply to the case at hand. Further, the area where the property is located cannot benefit from any regional aid within the meaning of Article 61(3)(c) of the EEA Agreement. The Authority therefore doubts that the transaction under assessment can be justified under the State aid provisions of the EEA Agreement.
Compatibility of the aid. The Icelandic authorities have argued that the transactions described above do not constitute State aid and have not put forward arguments concerning compatibility of possible State aid. However, as stated above, the Authority cannot exclude that State aid may be involved in the Port of Reykjavík’s purchase of shares in DR and Stálsmiðjan-Slippstöðin from Stáltak. It must therefore be considered whether any aid involved in the transactions could be compatible with the EEA Agreement under Articles 61(2) or 61(3) EEA. The exemptions laid down in Article 61(2) EEA are not applicable to the measures in question, as the measures are not designed to achieve any of the aims listed in this provision. Moreover, Articles 61(3)(a) and (b) EEA appear to be inapplicable as the measures in question did not promote economic development in an area where the standard of living is abnormally low or where there is serious underemployment and did not promote a project of common European interest. Furthermore, the information available to the Authority does not indicate that the measures in question had the objective to facilitate the development of certain economic activities as prescribed in Article 61(3)(c) EEA. Against that background, the Authority has reached the preliminary conclusion that the State aid is not compatible with the EEA Agreement.
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). According 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. 7.1. Compatibility assessment under Regulation 1370/2007
7.1.1. Public service contracts and their content
Compatibility of the aid. Support measures caught by Article 61(1) of the EEA Agreement are generally incompatible with the functioning of the EEA Agreement, unless they qualify for a derogation in Article 61(2) or (3) of the EEA Agreement. The derogation of Article 61(2) is not applicable to the aid in question, which is not designed to achieve any of the aims listed in this provision. Neither Article 61(3)(a) nor Article 61(3)(b) of the EEA Agreement applies to the case at hand. The area where the property is located can benefit from regional aid within the meaning of Article 61(3)(c) of the EEA Agreement, according to the Authority’s Decision No 227/06 (1). However, the Authority’s guidelines on National Regional Aid 2007-2013 at paragraph 30 require that the beneficiary has applied for aid and the authority responsible for administering the aid scheme has confirmed in writing that, subject to detailed verification, the project in principle meets the conditions of eligibility laid down by the scheme before the start of work on the project (2). Thus, the Authority has doubts regarding whether aid could be granted according to the above mentioned guidelines. The Authority therefore doubts that the transaction under assessment can be justified under the State aid provisions of the EEA Agreement.
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
(3) See in this respect Case 730/79, Xxxxxx Xxxxxx v Commission, [1989] ECR 2671, at paragraph 11 where it is stated that “[t]hen State financial aid strengthens the position of an undertaking compared with other underta- kings competing in intra-Community trade the latter must be regarded as affected by that aid”. fact that the pension regime in question removed previously existing barriers to entry to the respective market and that the financing of additional pension rights (acquired at a point in time when the market was still closed) a...
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)
(a) EEA or, for aid intended partly to offset additional transport costs, in Article 61(3)(c) EEA on the basis of a population density test.
Compatibility of the aid. 1. Legal basis for the compatibility assessment
Compatibility of the aid. Exemptions from the general prohibition on State aid as provided for in Article 61(1) may be granted if the conditions of 61(2) or (3) are fulfilled. The exemptions under Article 61(2) and 61(3)(a) and (b) seem to be applicable to the case at hand. Under Article 61(3)(c) EEA, State aid to facilitate the develop- ment of certain economic activities or of certain economic areas may be considered to be compatible with the EEA Agreement where such aid does not adversely affect trading conditions to an extent contrary to the common interest. As for the aid in question, it would seem to constitute operating aid. As such aid is particularly distortive, it may only in very limited circumstances be considered compatible with the func- tioning of the EEA Agreement. The Authority has not been presented with any elements indicating the existence of such circumstances in the case at hand. Against this background, the Authority takes the preliminary view that the aid is not compatible with the functioning of the EEA Agreement.
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.