THE LEVEL PLAYING FIELD IN CRISIS MODE 47 overcompensation. Consequently, operating costs not incurred due to the pandemic have to be disregarded and deducted from the damages. The other vital part of the notification in this respect is the explanation of the evidence what the Member State would accept as a proof for the damage. This can be an expert report, an auditor’s statement, etc. For COVID-19 measures, the Commission usually requires the comparison of the pre-pandemic reference period during which the beneficiary operated business as usual with the months under the lockdown measures. Once the amount of the damage per beneficiary is established with the methodology approved by the Commission, the Member State can compensate up to 100% of the damage, but they can set a lower threshold as they see reasonable. 4.2. Article 107(3)(b) Under Article 107(3) TFEU State aid may be compatible with the internal market, meaning that the Commission as the competition authority has significant discretion47 as regards what is allowed for Member States and what not. Point b) of this paragraph allow aid to be granted for important projects of common European interest, but also to “remedy a serious disturbance in the economy of a Member State”. Until the economic and financial crisis beginning in 2008, the Commission used this possibility only occasionally to find State aid compatible with the internal market. Then, in 2008, it adopted the first Temporary Framework48 to allow State aid to be granted for quenching the fires ignited by the crisis. Moreover, the Commission adopted a series of rules for the banking sector49, as the excessive risk-taking in this sector was the root of the crisis, having a spill-over negative effect on the real economy. Although the Temporary Framework is not in force any more, banks can receive State aid still under the last modification of the rules applicable for the financial sector, adopted in 2013. Following these developments, it was no surprise that Article 107(3)(b) became a focal point of the State aid law in the fight against the economic impact of the COVID-19 pandemic. All these measures fall under the notification obligation set out in Article 108(3) TFEU. The Commission has to authorise each measure before they are put into effect. Just during the financial and 47 See footnotes 26 and 27 and the jurisprudence cited there. 48 Source: https://ec.europa.eu/competition/state_aid/legislation/temporary_archive_en.html (accessed on 10 March 2021). 49 Source: https://ec.europa.eu/competition/state_aid/legislation/temporary.html (accessed on 10 March 2021).
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