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Article 87 (State aid rules); after the Lisbon Treaty, the numbering of the said article has been changed to Article 107 TFEU:

Article 87 EC prohibits specific kinds of aids that might be given by EU member states to enterprises, and gives powers to the European Commission to clear some such aids as "compatible with the common market".

This article is numbered 87 in the 1997 consolidated version of the EC Treaty. It is based on Article 92 of the 1957 Treaty of Rome.

This page contains an overview of the structure of Article 87, some information about its application to transport and operators of public services, and a few links.

Article 88 governs the enforcement of these State aid rules.

Structure of Article 87

Article 87 has three paragraphs.

Article 87(1) sets out a general prohibition as follows:

(1) Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, insofar as it affects trade between Member States, be incompatible with the common market.

Article 87(2) exempts some categories of aid from this prohibition:

Article 87(3) provides a possible justification for State aid that is aimed at the following purposes (subject to some conditions and provisos in each case):

Article 87(3)(e) allows the Council of Ministers to add to this list of potential justifications:

In addition to the justifications listed in Article 87, Article 86(2) of the Treaty provides a further potential justification for State aid that is necessary to achieve public service objectives, with a proviso similar to the "common interest" ones under Article 87(3)(c) and Article 87(3)(d).

Under Article 88(3), any new State aid scheme is subject to prior approval by the Commission, even if they are justified under Article 87(3) or Article 86(2), unless it comes within the scope of a block exemption regulation.

Application to transport and operators of public services

The application of the Article 87(1) definition of State aid to the case of State funding for public services was clarified in 2003 by the Altmark preliminary ruling of the Court of Justice. Following this judgment, the Commission has proposed block exemptions for funding to public services which constitute State aid (i.e. does not comply with the Altmark criteria) but is deemed to be justified under Article 86(2). Such aid will be exempted from the obligation to notify the scheme to the Commission.

In the case of transport, Article 73 provides that "aids shall be compatible with this Treaty if they meet the needs of coordination of transport or if they represent reimbursement for the discharge of certain obligations inherent in the concept of a public service." The European Court of Justice found in Altmark that this provision did not affect the application of Article 87 in a case where a Member State had taken advantage of a right to derogate from the transport-specific rules in Council Regulation 1191/69.

The Commission has proposed new arrangements for local bus and rail transport and some other public services.


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Last changed by Anonymous at 11:12 PM on Thursday 5 May 2011.

Reference for this page:
Reckon Open "Article 87" 2011-05-05T23:12:55
Link within Reckon Open: [[Article 87]]