European Union policy on state aid : rules and practices in the field of maritime transport

Abstract

The European Community has recognised the maritime transport industry as an industry of extreme importance. Aware of the many problems and hardships the industry faces on the competitive world market, the Community considers maritime transport as one of the sectors which benefits from the exemption of the EC State aid rules. This thesis looks into the importance and effectiveness of such state aids as measures which promote the development of economic activity in the maritime transport industry. It also looks into the effect such State aid rules have on the Maltese industry. Following a brief overview of the notion of State aid in EC legislation and what it entails in the first Chapter, Chapter 2 delves into the instances where sectoral and horizontal aid may legitimately be granted to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest as found in Article 87(3)(c). Chapter 3 contains an analysis of the specific State aid rules which are applied to the maritime transport industry. The development of the various acts and guidelines which harmonize Community State aid rules in the maritime transport industry is discussed and their success and effectiveness is explored. Chapter 4 moves on to the second aspect of State aid rules in the maritime transport industry by discussing the provision of services of general interest. This chapter deals with the rules governingpublic service contracts and their parameters within the Community's legislation on State aid. Chapter 5 deals with the impact that European Union State aid rules and practices have had on the maritime transport sector in Malta. Initially, an analysis on the state aid guidelines and their effect on the Maltese shipping register will be conducted. Following this, the chapter will look into the aid measures taken by the Government of Malta in relation to maritime transport which takes the form of compensation for the performance of public service obligations provided by Gozo Channel Co. Ltd. In light of the reasoned opinion sent by the European Commission, the author questions the adequacy of current Community public service contract rules to the Maltese market, with its unique characteristics.