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The Court of Justice of the European Union should annul its judgment upholding the European Commission’s decision to approve Hungary’s subsidies for two new nuclear reactors in Paks, Laila Medina, the Latvian Advocate General of the European Union’s Luxembourg-based court, wrote in her Opinion.
In its 2017 decision, the European Commission approved investment aid that Hungary intended to grant to the state-owned company MVM Paks II for the development of two new nuclear reactors at the site of the Paks nuclear power plant. The construction of the reactors was to be fully financed by the Hungarian state. The Russian company Nizhny Novgorod Engineering was awarded the contract for the construction of the new reactors by direct award under the Nuclear Cooperation Agreement between Hungary and Russia. Russia is also providing a state loan to finance the project.
Austria challenged the Commission’s approval decision before the General Court of the European Union, but its appeal was rejected in the first instance in November 2022. Austria subsequently appealed to the EU Court of Justice.
Advocate General Laila Medina argues that the EU Court should uphold the appeal and annul the General Court’s ruling.
According to the Advocate General, Austria is correct in arguing that the Commission, when assessing the aid in question, should have examined whether the direct award to Nizhny Novgorod Engineering of the contract for the construction of the new reactors is compatible with the European Union’s provisions on public contracts.
As written in the Court’s press release, that award was in fact an aspect of the aid which had an inextricable link to that aid. “According to the Advocate General, an inextricable link of that kind exists with regard to factors or conditions which are necessary for the attainment of the object of the aid or for its functioning, without which the planned State intervention cannot achieve the objectives that it pursues.
In such a situation, the Commission is required to take into account, in assessing the compatibility of State aid with the internal market, a possible infringement of provisions of EU law other than those relating to aid,”
reads the statement.
They added that in Medina’s view, the “Commission may fulfill its obligation to carry out such an examination by referring to infringement proceedings that it has initiated against the Member State concerned and that it has closed after finding that there was no infringement of the relevant provisions, which in the present concern public contracts. That is what the Commission had done, in the alternative, in the contested decision. However, since it made a mere reference, without setting out, in the contested decision, the considerations which had led it to find that there had been no infringement, that decision did not provide a sufficient statement of reasons on that issue.”
The Advocate General’s Opinion does not bind the court in its judgment. The court is now beginning its deliberations in the present case and the judgment will be delivered at a later date.
Via MTI, Court of Justice of the European Union; Featured photo via Facebook/MVM Paksi Atomerőmű Zrt.
