The General Court has overturned the European Commission’s decision to approve an aid scheme implemented by Italy during the COVID-19 pandemic. The aid measure involved subsidies provided to Italian airlines to compensate for the damages caused by travel restrictions and containment measures.
An action for annulment was brought by Ryanair before the General Court, who annuls that decision on grounds of failure to provide a statement of reasons, as provided for in Article 296 TFEU.
The court ruled that the Commission failed to provide adequate reasoning for its decision and did not consider the measure’s compatibility with EU laws beyond those governing state aid. The court found that the Commission did not sufficiently justify its view that the requirement for minimum remuneration, which was a condition for airlines to receive the subsidies, did not violate other provisions of EU law. The lack of reasoning and failure to state reasons led to the annulment of the Commission’s decision.