AG Medina recommends overturning the General Court’s ruling on Hungary’s Paks II nuclear aid
Today, Advocate General Medina delivered her opinion in Case C-59/23 P Austria v Commission (Paks II nuclear power station).
In 2017, the European Commission (Commission) approved Hungarian state aid for two new nuclear reactors at Paks in 2017 (cf. SA.38454). The reactors, replacing existing ones, were to be state-financed and operated by MVM Paks II. Their construction was directly awarded to Russia’s Nizhny Novgorod Engineering under a bilateral agreement, with Russia providing financial support. Austria challenged the Commission’s decision, but the General Court dismissed the case in 2022 ( Case T-101/18). Austria appealed, and AG Medina now proposes that the Court of Justice should set aside the General Court’s ruling.
According to the Advocate General, Austria is correct in arguing that the Commission, when assessing the aid at issue, 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.
According to her opinion, the award was an aspect of the aid, inextricably linked to that aid. She states that an inextricable link of that kind exists with regards to factors or conditions that are necessary for the attainment of the object of the aid or for its functioning without which the state intervention cannot achieve its objective. In such cases, the Commission must consider potential infringements of EU law beyond State aid rules when assessing compatibility with the internal market. The Commission may fulfil this obligation by making reference to closed infringement proceedings, as it did in the contested decision. However, merely referring to those proceedings without explaining its reasoning rendered the decision insufficiently reasoned.
She therefore proposes to set aside the judgment of the General Court.