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

15 conditions in the “soft law” i.e. communications, guidelines, etc. The soft law is obligatory for the Commission, or at least there has to be solid ground for not applying it but rely during the compatibility assessment solely and directly on the TFEU, i.e. Article 107(3)(b) in the present case. 50 Thus, there are certain general conditions to comply with under this exemption to achieve the “compatible” label from the Commission. First, there has to be a serious economic disturbance in the economy of the Member State. The disturbance should not necessarily be global or EU-wide, but is has to be certainly wider than serious problems in one economic sector or one part of the given EU Member States. It goes without saying that the outbreak of the COVID-19 and its effects including the related lockdown measures caused serious disturbance in a short period of time all over Europe. Supply chains collapsed, transports were stopped, markets were suffering from both demand and supply side shocks, and the services sector has been hit as never seen before. Second, the Member State has to show that the measure effectively but also proportionately reacts to the serious disturbance and helps the undertakings hit by the crisis. Overcompensation has to be excluded, the beneficiaries cannot receive undue advantage. Furthermore, the positive effects of the measure must be properly balanced against the distortions of competition. In order to limit the distortions caused by the aid on the market to the minimum necessary the Member State has to apply some kind of safeguards depending on the type of the measure 51 . Third, the Commission also checks whether the measure is appropriate, e.g. targets the problem in the right way, but also whether it has significant positive impact. A measure with low budget reaching only a handful of beneficiaries has lower potential, and maybe the Commission would not find this as appropriate to remedy a serious disturbance. Hence, the measure has to be able to stop the significant deterioration of the economic situation or at least reduce its impacts. The Member State has to show that without the aid the disturbance cannot be handled just relying on market forces 52 . 50 See judgment in case C-431/14 P Hellenic Republic v Commission paragraph 72. 51 This depends on the type of the aid granted. Obviously smaller amounts have lesser distortive impacts, and loans or guarantees also compared to equity measures. 52 See the judgment in case C-526/14 Tadej Kotnik e.a. (ECLI:EU:C:2016:767) paragraph 49.