The Legal Impacts of COVID-19 in the Travel, Tourism and Hospitality Industry

12 4.1. Article 107(2)(b) Under Article 107(2) TFEU the aid categories listed there “shall be compatible with the internal market”. This means that once the conditions of the granting are present, the Commission has no broad discretion to assess the compatibility, 39 but has to acknowledge in its decision that the aid is compatible. Nevertheless, Member States still have to notify these aid plans under Article 108(3) TFEU to the Commission ex ante and have to wait with the granting of the aid until the Commission declares the compatibility of the aid. Under the relevant jurisprudence, the compatibility has three cumulative conditions. First, the measure has to be strongly linked to an exceptional occurrence or a natural disaster. Leaving aside natural disasters, this legal basis was applied in relation of events which were unforeseeable, in a way that no market player could expect them, but they also have to have major impact. Previously, events like 9/11, 40 the eruption of a volcano, 41 or a major industrial accident 42 were recognised as such exceptional occurrences. Obviously, the Commission has accepted the outbreak of the COVID-19 pandemic as an exceptional occurrence that no one could be prepared for and that had far reaching consequences on the normal functioning of the market. 43 However, as Chapter 5 below will show, the Commission’s decisional practice got tighter throughout the months of the pandemic. The second condition requires a direct causal link between the exceptional occurrence and the damage suffered. Even though the measures providing compensation for the damages of exceptional occurrences “shall be” compatible with the internal market, it is still an exemption from the general ban of granting State aid under Article 107 (1) TFEU. 39 See the judgments in case C-730/79 Philip Morris v Commission (EU:C:1980:209), paragraph 17 and related to the terror attacks of 9/11 the judgment in case T-268/06 Olympiaki Aeroporia Ypiresies v Commission (EU:T:2008:222), paragraph 51. 40 See Communication from the Commission to the European Parliament and the Council - The repercussions of the terrorist attacks in the United States on the air transport industry (COM/2001/0574 final), especially its para. 33. 41 Case SA.32163 – 2010/N - Slovenia – Rectification of consequences of the damage caused to air carriers and airports by earthquake activity in Iceland and the resulting volcano ash in April 2010 42 Case SA.33487 (2011/N) Agricultural and fisheries aid to compensate for damage due to exceptional occurrence (red sludge "aluminium accident"). 43 These specifications mainly require that an exceptional occurrence has to be something that usually cannot be covered with insurance products available on the market. For this reason any returns from insurances or litigations, arbitration for these damages has to be disregarded when calculation the amount of the aid.