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Article 88 (State aid enforcement)

Article 88 EC provides for the enforcement of the Article 87 State aid rules.

This article is numbered 88 in the 1997 consolidated version of the EC Treaty. It is based on Article 93 of the 1957 Treaty of Rome.

Article 88(1) and Article 88(2) provides for the identification and correction of any incompatible systems of State aid that might have existed in a State since before they joined the EC. This kind of State aid is known as existing aid:

(1) The Commission shall, in cooperation with Member States, keep under constant review all systems of aid existing in those States. It shall propose to the latter any appropriate measures required by the progressive development or by the functioning of the common market.

(2) If, after giving notice to the parties concerned to submit their comments, the Commission finds that aid granted by a State or through State resources is not compatible with the common market having regard to Article 87, or that such aid is being misused, it shall decide that the State concerned shall abolish or alter such aid within a period of time to be determined by the Commission.

If the State concerned does not comply with this decision within the prescribed time, the Commission or any other interested State may, in derogation from the provisions of Articles 226 and 227, refer the matter to the Court of Justice direct.

On application by a Member State, the Council may, acting unanimously, decide that aid which that State is granting or intends to grant shall be considered to be compatible with the common market, in derogation from the provisions of Article 87 or from the regulations provided for in Article 89, if such a decision is justified by exceptional circumstances. If, as regards the aid in question, the Commission has already initiated the procedure provided for in the first subparagraph of this paragraph, the fact that the State concerned has made its application to the Council shall have the effect of suspending that procedure until the Council has made its attitude known.

If, however, the Council has not made its attitude known within three months of the said application being made, the Commission shall give its decision on the case.

Article 88(3) creates a duty on member states to notify new aid schemes in advance of their implementation, and not to implement such schemes if the Commission disapproves of them.

The Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. If it considers that any such plan is not compatible with the common market having regard to Article 87, it shall without delay initiate the procedure provided for in paragraph 2. The Member State concerned shall not put its proposed measures into effect until this procedure has resulted in a final decision.

The duty not to implement the aid without Commission consent in the last sentence of Article 88(3) has direct effect, and has been interpreted as including a duty to secure the repayment of aid that had been given without prior Commission consent and that the Commission (or the CFI/ECJ on appeal) finds to be incompatible with the Article 87 rules. It can be relied upon in litigation in a national court to secure repayment of illegal State aid.

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Last changed by Franck at 7:12 PM on Wednesday 13 June 2007.

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Reckon Open "Article 88" 2007-06-13T19:12:16
Link within Reckon Open: [[Article 88]]