Romania has been referred to the European Court of Justice over its failure to recover up to €92 million in Romanian state aid which breached EU rules.
In December 2013 an arbitral award found that Romania had infringed a bilateral investment treaty between itself and Sweden after revoking an investment incentive Romanian state aid scheme in 2005 – the scheme was withdrawn as part of Romania’s accession to the EU, in order to incorporate EU rules on state aid into its processes. The claimants who had brought the case, Viorel and Ioan Micula, were investors holding Swedish citizenship. They were awarded substantial damages, to be paid by Romania, in compensation for the funds they should have received.
However after completing an in depth investigation, the Commission found in 2015 that the Romanian state aid which was paid to the Miculas and their companies had been in breach of EU rules and must be returned to the state. The Commission mentioned in particular that the compensation payout represented advantages equivalent to those provided by the discontinued incentive scheme, which had been found to be incompatible with EU state aid regulations.
According to standard procedures, the deadline to recover the Romanian state aid was 31 July 2015 – four months after the Commission’s initial ruling – and Romania did recover a portion of the illegitimate compensation by that date; however up to €92 million remains unrecovered to date and there appears to be no expectation of full repayment. As a result, the European Commission has referred the case to the European Court of Justice for failing to implement the Commission’s earlier ruling.
As a matter of principle, state aid which is illegal in the EU must be recovered by the donor in order to minimise any artificial advantage obtained by the recipient. Once the European Commission rules that an aid award is illegitimate, the donor typically has a four month period to recover it.