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Unclear Legal Position of the Standstill Obligation in Light of Legal Certainty and the Protection of Legitimate Expectations

Vukic, Fabian LU (2026) JURM02 20261
Department of Law
Faculty of Law
Abstract
This thesis examines the intersection of EU procedural law and EU State aid law, focusing on the systemic friction between the enforcement of the Standstill obligation and the principles of legal certainty and the protection of legitimate expectations.

The first purpose is to identify the legal implications regarding the Standstill obligation under Article 108(3) TFEU when the procedure set out in Article 108 TFEU has been followed, and pursuant to this, the Member State has implemented the measure, but the positive authorization decision by the European Commission is subsequently annulled by the EU Courts.

The thesis concludes that the annulment by the EU Courts has a retroactive effect on the positive authorization decision.... (More)
This thesis examines the intersection of EU procedural law and EU State aid law, focusing on the systemic friction between the enforcement of the Standstill obligation and the principles of legal certainty and the protection of legitimate expectations.

The first purpose is to identify the legal implications regarding the Standstill obligation under Article 108(3) TFEU when the procedure set out in Article 108 TFEU has been followed, and pursuant to this, the Member State has implemented the measure, but the positive authorization decision by the European Commission is subsequently annulled by the EU Courts.

The thesis concludes that the annulment by the EU Courts has a retroactive effect on the positive authorization decision. Subsequently, the already implemented State aid pursuant to the positive authorization decision is deemed to have been unlawfully implemented, and the beneficiary is thus obligated to repay the aid with interest from the date of implementation. This raises concerns about legal certainty and legitimate expectations.

The second purpose of this thesis is to assess whether the beneficiary of an already implemented State aid measure, which was authorized through a positive European Commission decision in which the Member State followed the correct procedure set out in Article 108 TFEU, but the positive authorization decision is subsequently annulled by the EU Courts, can plead the principles of legal certainty and the protection of legitimate expectations in order to prevent the recovery of such aid.

In order to answer this question, the thesis deploys the assessment developed by Xavier Groussot and concludes that the beneficiary of the implemented State aid measure cannot rely on these principles, as a plea in law, to prevent recovery. The main reason for this conclusion is that the beneficiary's competitors would not have adequate judicial protection, and in particular, their right to an effective remedy would be rendered non-existent.

These findings raise critical questions regarding the efficacy of the EU State aid framework. In circumstances requiring immediate liquidity, particularly during periods of crisis, the current framework appears insufficient to handle the expeditious response necessary for aid measures to achieve their intended impact. One suggestion for reform is for the Commission to inform beneficiaries, when authorizing a proposed measure by a Member State, that the wording of the Standstill obligation in reality implies that the final decision needs to become definitive. This would not resolve the issue of circumstances requiring immediate liquidity, but it would at least eliminate any legitimate expectations on the part of the beneficiary. (Less)
Abstract (Swedish)
Det första syftet är att identifiera de rättsliga konsekvenserna avseende genomförandeförbudet enligt artikel 108.3 FEUF när det förfarande som föreskrivs i artikel 108 FEUF har följts, och medlemsstaten i enlighet därmed har
genomfört åtgärden, när ett positivt godkännandebeslut från Europeiska kommissionen därefter ogiltigförklaras av EU-domstolarna.
Uppsatsen drar slutsatsen att EU-domstolarnas ogiltigförklaring har retroaktiv verkan på det positiva godkännandebeslutet. Följaktligen anses det statsstöd som redan genomförts i enlighet med det positiva godkännandebeslutet
ha genomförts olagligt, och stödmottagaren är därmed skyldig att återbetala
stödet med ränta från dagen för genomförandet. Detta väcker funderingar
kring... (More)
Det första syftet är att identifiera de rättsliga konsekvenserna avseende genomförandeförbudet enligt artikel 108.3 FEUF när det förfarande som föreskrivs i artikel 108 FEUF har följts, och medlemsstaten i enlighet därmed har
genomfört åtgärden, när ett positivt godkännandebeslut från Europeiska kommissionen därefter ogiltigförklaras av EU-domstolarna.
Uppsatsen drar slutsatsen att EU-domstolarnas ogiltigförklaring har retroaktiv verkan på det positiva godkännandebeslutet. Följaktligen anses det statsstöd som redan genomförts i enlighet med det positiva godkännandebeslutet
ha genomförts olagligt, och stödmottagaren är därmed skyldig att återbetala
stödet med ränta från dagen för genomförandet. Detta väcker funderingar
kring rättssäkerheten och berättigade förväntningar.
Det andra syftet med denna uppsats är att bedöma om stödmottagaren av en
redan genomförd statsstödsåtgärd – vilken godkändes genom ett positivt
kommissionsbeslut där medlemsstaten följde det korrekta förfarandet enligt
artikel 108 FEUF, men där det positiva godkännandebeslutet därefter ogiltigförklaras av EU-domstolarna – kan åberopa principerna om rättssäkerhet och
skydd för berättigade förväntningar för att förhindra återkrav av stödet.
För att besvara denna fråga tillämpar uppsatsen den bedömningsmodell som
utvecklats av Xavier Groussot och drar slutsatsen att stödmottagaren av den
genomförda statsstödsåtgärden inte kan förlita sig på dessa principer, som en
grund för talan, för att förhindra återkrav. Huvudorsaken till denna slutsats är
att stödmottagarens konkurrenter inte skulle ha ett adekvat domstolsskydd,
och i synnerhet att deras rätt till ett effektivt rättsmedel skulle göras obefintlig.
Dessa slutsatser väcker kritiska frågor rörande effektiviteten hos EU:s statsstödsregelverk. Under omständigheter som kräver omedelbar likviditet, särskilt under krisperioder, framstår det nuvarande regelverket som otillräckligt
för att hantera de skyndsamma åtgärder som krävs för att stödåtgärderna ska
uppnå sin avsedda effekt. Ett reformförslag är att kommissionen, när den godkänner en medlemsstats föreslagna åtgärd, informerar stödmottagarna om att
ordalydelsen i genomförandeförbudet i realiteten innebär att det slutliga beslutet måste vinna laga kraft. Detta skulle inte lösa problemet med omständigheter som kräver omedelbar likviditet, men det skulle åtminstone eliminera eventuella berättigade förväntningar hos stödmottagaren. (Less)
Please use this url to cite or link to this publication:
author
Vukic, Fabian LU
supervisor
organization
course
JURM02 20261
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
EU law, State aid, Standstill obligation, General principles of EU law, Competition law
language
English
id
9227020
date added to LUP
2026-06-11 17:53:18
date last changed
2026-06-11 17:53:18
@misc{9227020,
  abstract     = {{This thesis examines the intersection of EU procedural law and EU State aid law, focusing on the systemic friction between the enforcement of the Standstill obligation and the principles of legal certainty and the protection of legitimate expectations.

The first purpose is to identify the legal implications regarding the Standstill obligation under Article 108(3) TFEU when the procedure set out in Article 108 TFEU has been followed, and pursuant to this, the Member State has implemented the measure, but the positive authorization decision by the European Commission is subsequently annulled by the EU Courts.

The thesis concludes that the annulment by the EU Courts has a retroactive effect on the positive authorization decision. Subsequently, the already implemented State aid pursuant to the positive authorization decision is deemed to have been unlawfully implemented, and the beneficiary is thus obligated to repay the aid with interest from the date of implementation. This raises concerns about legal certainty and legitimate expectations.

The second purpose of this thesis is to assess whether the beneficiary of an already implemented State aid measure, which was authorized through a positive European Commission decision in which the Member State followed the correct procedure set out in Article 108 TFEU, but the positive authorization decision is subsequently annulled by the EU Courts, can plead the principles of legal certainty and the protection of legitimate expectations in order to prevent the recovery of such aid.

In order to answer this question, the thesis deploys the assessment developed by Xavier Groussot and concludes that the beneficiary of the implemented State aid measure cannot rely on these principles, as a plea in law, to prevent recovery. The main reason for this conclusion is that the beneficiary's competitors would not have adequate judicial protection, and in particular, their right to an effective remedy would be rendered non-existent.

These findings raise critical questions regarding the efficacy of the EU State aid framework. In circumstances requiring immediate liquidity, particularly during periods of crisis, the current framework appears insufficient to handle the expeditious response necessary for aid measures to achieve their intended impact. One suggestion for reform is for the Commission to inform beneficiaries, when authorizing a proposed measure by a Member State, that the wording of the Standstill obligation in reality implies that the final decision needs to become definitive. This would not resolve the issue of circumstances requiring immediate liquidity, but it would at least eliminate any legitimate expectations on the part of the beneficiary.}},
  author       = {{Vukic, Fabian}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Unclear Legal Position of the Standstill Obligation in Light of Legal Certainty and the Protection of Legitimate Expectations}},
  year         = {{2026}},
}