That Was The Week That Was 05-09 April 2021
How to Write a Successful State Aid Application – Your Cut-Out-And-Keep Guide
We have wondered before what it would take for an application for State Aid to be rejected by the European Commission. Time, after time, after time, after time the Commission has waved through applications that, frankly, the visually challenged could see were market distorting. And that was before the Covid Crisis. Remember, if you can, that the test is whether the aid would distort the market. This test, you will quickly realise assumes a market run on normal market grounds. One where the entire basis is creative disruption and indeed creative destruction.
And that, as Hamlet would note, is the rub. No government, no state, wants creative destruction. That means job losses; it means unemployment; it means lost votes. So states bring in their brightest and best to do what they can to make sure that they get their ‘assistance’ to state-owned enterprises approved by the watch-dog in Brussels – DG COMP. Or, at least, they did once. Once, DG COMP was a force to be reckoned with. Once, DG COMP had teeth. Once, DG COMP had guts. Now, it is clear that the watch-dog has fallen asleep. Perhaps someone threw a steak laced with rat poison into the kennel.
If you think that exaggerated, consider the additional state aid approved by Brussels this week, the week that was, for our old friends Air France. To be fair, this is an additional €1 billion on the €3 billion already approved as a loan, now converted into equity. Four billion. Four billion, on top of all the other aid and assistance Air France has trousered during the Covid Crisis – not to be confused with all the state aid and other assistance Air France has trousered before the Covid Crisis.
Air France notes that the aid comes with conditions, very strict conditions, like the sort your Grandma might impose before awarding you with ice cream on a hot day. Air France has to find a way to reduce France’s equity holding to a quarter, yes 25%, within a year. That is worth repeating – down to, down to, 25%. There are no further conditions on this requirement, but there is one obvious one – Air France, and all the bits of that group, can stop bleating about other state owned airlines around the world. That and indeed any other meaningful condition was missed by good old Rex the watch dog there are DG COMP.
Instead, DG COMP insisted, insisted, they claim, in very difficult and tense negotiations, to demand, demand note, that Air France give up 18 slots at Orly. 18 slots a week. Two slots a day and change. But, then, further conditions were imposed on the recipients of such overwhelming largesse: the airline that is to be awarded these slots cannot be Ryanair. OK, that is a paraphrase but the intention is obvious. Any candidate to take on these slots must have operations at Orly – whoops, Ryanair does not. And, it must comply with French social terms and conditions. Ryanair does that, but oh, wait, they have already been eliminated. Oh, sorry. Desole
So how does one write an application for approval of state aid in these difficult times? Aviation Advocacy has put together this helpful cut-out-and-keep guide.
Your guide to writing successful State Aid Applications
Step 1 Write it in French