This is an important, ambitious and timely book in an area of huge economic importance. It is directed to legislators, administrators and the courts. Its subject is one which has not, so far as I know, been comprehensively covered by any other, namely, the allocation to economic actors of limited rights by the European Union and Member States – rights to receive a subsidy or to licences to carry on an activity which can not lawfully be carried on without such a licence. A careful reading of the first chapter gives a good insight into what is being attempted by the authors.

The book does not walk again down well trodden paths but rather exposes and discusses a collection of often overlapping and at times conflicting Treaty provisions, Directives, Regulations, legal decisions and economic and political desiderata. It seeks to identify tools which will help to construct something orderly.

As a former judge of the Court of Justice of the European Union who has had to try with his colleagues to find a path through inconsistent case law and concepts it was a joy on being asked whether I would write this preface, to come across – alas too late – a draft of this book. It should help my successors to find a conceptually coherent approach to draft ing judgments in a particular field so that they do not conflict with other judgments in overlapping fields.

The law is currently being developed and is still sufficiently flexible and uncrystallised for this book to be in a position to make a significant contribution to that development. I hope that in due course it will be found possible to translate it into French – still the working language of the CJEU.

Konrad Schiemann

Former Judge of the Court of Justice of the European Union

This book is the result of a Europe-wide exploration of building blocks for a consistent and general legal theory on the allocation of limited rights by administrative authorities. The idea of an international book project on this theme was launched at an inspiring international conference, organised by researchers from the Departments of Constitutional and Administrative law of Leiden University and VU University Amsterdam, the Netherlands. The project has been realised with the help of many researchers from various EU Member States. The contributions in this book deal with the subject from a general perspective, as well as from an EU law perspective and a comparative law perspective. These contributions have been enriched by the information provided by national reports on the allocation of gambling licences, radio frequencies and CO2 emission permits in seven EU Member States: France, Germany, Greece, Italy, the Netherlands, Romania and Spain. Together, all these contributions have resulted in a valuable and interesting collection of legal scholarship, which sheds light on various complex issues concerning the allocation of limited rights by administrative authorities. We sincerely hope that, based on these building blocks, further research in this field can be carried out. We wish to thank all the authors for their efforts and contributions to this book project.

Paul Adriaanse, Frank van Ommeren, Willemien den Ouden and Johan Wolswinkel Leiden/Amsterdam, November 2015

Introduction

When allocating and granting limited rights, national authorities within the EU Member States should be aware of the possible influence of EU State aid law. The same applies to the national legislatures, when creating the underlying schemes for such limited rights. In fields in which regulation at EU level exists, e.g. in the field of CO2 emissions, the role of EU State aid law may be mentioned explicitly and clarified in the applicable EU legislation or guidelines. However, also by lack of such explicit reference in secondary EU regulation or soft law documents, the EU State aid rules, as laid down in the Treaty on the Functioning of the European Union (hereinafter: TFEU), may be applicable when dealing with limited authorisations or claims within the scope of this book, for example in the field of the allocation of limited gambling licences. According to consistent case law of the European Court of Justice the concept of State aid embraces all measures ‘which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which, therefore, without being subsidies in the strict sense of the word, are similar in character and have the same effect (…).’ Although the concept of State aid is interpreted and applied broadly, little literature exists on the application of EU State aid rules to the allocation of limited rights by administrative authorities.

The aim of this chapter, therefore, is twofold. First, to explore to what extent the EU State aid law requirements could influence the allocation of limited rights by national authorities or the legislature (hereinafter generally referred to as: the allocation of limited rights). The second aim of this chapter is to contribute to the central question of this book. Based on the explorative analysis of the role of EU State aid law with regard to the allocation of limited rights, an answer is sought to the question what could be learned from EU State aid law with a view to the development of a consistent and general legal theory of the allocation of limited rights by national authorities. To do so, Section 2 first deals with the conditions which should be met in order to qualify a specific measure as State aid in the sense of the TFEU.

Introduction

Managing scarcity to serve the public interest is a classic task of government. Whereas economic and political theory have paid much attention to the allocation of scarce goods and rights, until now a consistent and general legal theory of ‘the allocating government’ has been more or less absent. In fact, the law of public administration seems to assume that every party shall be granted a good or right once it satisfies all the necessary conditions. This assumption neglects the fact that in several areas of government regulation, individual rights such as authorisations and (financial) claims are available only in a limited quantity. As a result of this limited availability, certain applications for those rights must be denied even though the applicants satisfy all the necessary conditions. In other words, there may not be enough rights available to satisfy all qualified parties.

This idiosyncratic feature of limited rights can be illustrated using a number of examples. First, it is worth mentioning the auctions of the 4G spectrum in several Member States as an example of rights which are scarce for natural reasons. With revenues running up to billions of euros, the financial importance of these frequencies for both the allocating authorities and the bidding undertakings is clear from the outset. In the area of gambling law, an area entirely different from telecommunications law at first sight, scarcity exists as well: in order to ensure the protection of consumers and to combat crime and gambling addiction, many Member States artificially restrict the number of authorisations that are available to be granted. The same holds true for financial grants, although the background is different: in order to restrict expenditure, most kinds of financial grants and subsidies are available in limited budget only, both at the European level and at the level of the Member States. Last but not least, we mention the many procurement procedures being performed in order to conclude supply contracts with market parties.

This book seeks to demonstrate the need for a consistent and general theory on the allocation of limited rights by administrative authorities from a legal perspective.

Introduction

In the EU and its Member States public spending is often perceived as being subjected to increasing European regulation over the years, due to the great economic interdependency of EU economies. A transfer of competences to the European level has indeed partly taken place over the past few years, but not entirely. To illustrate: the legal framework within which the Commission took its decisions on the aid operations of Member States to the ‘too big to fail’ banks, is essentially the framework that has existed since the 1950s to assess aid measures from the EU Member States. Nevertheless, the specific measures taken by the Commission within this framework could raise the impression of greater Brussels control over aid operations by Member States.

This perceived loss of control over ‘own’ government spending in the Member States, in addition to the distance felt towards Brussels decisionmaking concerning public resources at the European level, could lead to suspicion from taxpayers, but also from politicians and administrators, towards the EU project. The Europeanisation of decision-making processes need not, in itself, be problematic, as long as checks and balances are built in. Where such checks and balances are absent or are subject to erosion, issues of legitimacy can quickly arise. Therefore, the question arises: In Europeanised decision-making processes on public spending , what are appropriate guarantees, as Möller puts it, ‘as an attempt to align the legitimacy standards of foreign-policy action with those of domestic constitutionalism’?

This chapter aims to answer this question in the field of State aid surveillance . The European rules concerning aid measures granted by the Member States, which are aimed at preventing the distortion of competition on the internal market, have in time led to a complex system of European supervision on State aid as provided by Articles 107 and 108 TFEU, in which many actors, both at European level and at national level, play a role. The interaction between those actors could be considered to be an example of composite administration, which may colour the analysis of legitimising procedures and decision-making as mentioned above.

After this introduction, first, an overview will be given of procedures and decision-making processes in State aid matters and the interaction between the actors involved in the light of the recent modernisation of State aid control (section 2).