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In Case T-693/14 Hamr Sport v European Commission the General Court dismissed an application to set aside a Commission decision finding aid for not-for-profit sports clubs in the Czech Republic to be compatible with the internal market. The Commission had applied its balancing test first announced in the 2005 State Aid Action Plan. It found the aid to be necessary so as to secure access to sports facilities especially for young people, which it accepted as a valid common interest objective frustrated by the existence of market failures. It also considered that without the intervention, access to affordable facilities would not have been guaranteed to the desired extent. Although acknowledging possible competitive and trade distortions, the Commission considered that the localised nature of the services meant that any such effects would be limited. The General Court upheld the Commission’s statement of reasons as adequate, placing particular emphasis on the comprehensiveness of the Commission’s proportionality review. This then fed into its substantive review of the compatibility assessment, which the General Court upheld. That comprehensiveness does not, however, excuse the General Court’s failure to insist on a proper demonstration of the necessity of the measure and a coherent explanation of the review of incentive effects. While the judgment is an indirect endorsement of the balancing test, the underlying decision is hardly a good example of the ‘more economic’ approach in practice. Both the non-application and misapplication of aspects of that test should have led to the invalidation of this decision by the General Court.  Keywords: Market Failure; Sports Facilities Funding;  Admissibility; Compatibility Assessment; Common Interest Objective; Effect on Trade.

european state aid law quarterly

The General Court Endorses the Balancing Approach to Compatibility Assessment by the Commission for Czech Funding of Sports Facilities   ∙  Hamr Sport v European Commission  ∙  T-693/14 ∙  Annotation by Jarleth M. Burke Annotation of the Judgment of the General Court (Eighth Chamber) of 12 May 2016 in Case T-693/14 Hamr Sport v European Commission