THE LEVEL PLAYING FIELD IN CRISIS MODE 41 community, but prefers to grant aid horizontally, meaning available for all economic sectors. Although, with the COVID-19 pandemic this approach has changed, and State measures helping in a targeted way for sectors badly affected are more accepted by the Commission than in the past. 2.3. When Is State Aid Compatible with the Internal Market? The prohibition to grant State aid is not absolute; Article 107(1) TFEU uses the term “[S]ave as provided otherwise in the Treaties”, meaning that there might be exemptions defined in the primary EU Law. These can be found in different articles of the TFEU. Articles 42 and 93 define special treatment for agriculture and certain transport activities and Article 107(2) and (3) list the more horizontal exemptions. As regards the exemptions listed in Article 107(2), their main characteristic is that these “shall be” compatible with the internal market, where the Commission has no real freedom of assessment, needing only to verify whether the TFEU conditions are met. By contrast, the exemptions listed in Article 107(3) “may be considered as compatible”. Regarding the group of exemptions which “may be” compatible with the internal market, the European Commission has wide discretion to define the conditions for compatibility26, especially if this decision involves assessments of an economic and social nature, which must be made within an EU context27. Essentially, this assessment is a balancing act of the interest of having an undistorted internal market and of granting State aid to achieve specific common interest objectives (such as economic and social cohesion, environmental protection, employment, funding research and development). During 2012-2014 under the so-called State aid Modernisation initiative28, the Commission decided to elaborate certain general compatibility conditions, which have to be met in case of all aid to consider them as compatible: a) the aid has to contribute to an objective of common interest, and should not serve only the interest of the beneficiary; 26 See the judgment in case C-464/09 P Holland Malt (ECLI:EU:C:2010:733), paragraph 46. 27 C-110/03 Belgium v Commission (ECLI:EU:C:2005:223) paragraph 68, Case C-303/88, Italy v Commission (ECLI:EU:C:1991:136), paragraph 34, Germany and Others v Kronofrance, C-75/05 P and C-80/05 P, EU:C:2008:482, paragraph 59, and Banco Privado Português and Massa Insolvente do Banco Privado Português, C-667/13, EU:C:2015:151, paragraph 67 28 Previously, the Commission revised the State aid rules in the frame of the State aid Action Plan (2004-2007).
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