The European Commission's assessment as to whether Denmark has granted illegal state aid to the Fehmarn Belt fixed link is “inaccurate” and “insufficient”. This was the conclusion of the General Court on 13 December 2018.

In 2008, it was decided to build the Fehmarn Belt fixed link between Lolland and Germany which will be completed in 2028 according to the plan.

The Danish state has granted state aid by way of favourable loans and tax advantages to the huge infrastructure project.

STATE AID TO THE FEHMARN BELT FIXED LINK APPROVED BY THE EUROPEAN COMMISSION

In 2015, the European Commission approved the Danish state aid to the Fehmarn project. At that time, the European Commission assessed that it was not necessary to initiate a formal investigation procedure in relation to the aid as it was in "the common European interest" to connect Europe.

The ferry operators Scandlines and Stena Line have brought action against the European Commission as they believe that illegal state aid was granted to the Fehmarn Belt fixed link.

THE GENERAL COURT CANCELS THE EUROPEAN COMMISSION’S DECISION

On 13 December 2018, the General Court ruled in favour of the ferry operators stating that the European Commission made a mistake when approving the project in 2015. The General Court states that the European Commission’s assessment of the project was “inaccurate”, “imprecise” and even self-contradictory. According to the General Court, this should have prompted the European Commission to initiate a formal investigation procedure including an analysis of whether the state aid was proportional.

State aid to major construction projects must be investigated in detail. In the judgment, the General Court is harsh on the European Commission which indicates that cases concerning state aid must be investigated in detail in relation to huge infrastructure projects.

This is in line with the General Court's   judgment in the case concerning state aid to the Oresund Bridge where the court reached the same conclusion only two months’ earlier. In this case, the ferry operator HH Ferries had brought action against the European Commission for not having initiated a formal investigation procedure.

CONSEQUENCES OF THE JUDGMENT

The judgment shows that the European Commission should have been more thorough by initiating a formal investigation. The European Commission must once again assess whether the financing of the Fehmarn Belt fixed link is illegal state aid. However, it is important to note that the European Commission may come to the conclusion that the state aid is fully consistent with EU law. The judgment only concerns the preliminary examination which was insufficient.

contacts

Marie Løvbjerg

Attorney