Date: 25 September 2026
Venue: Pázmány Péter Catholic University, Faculty of Law and Political Sciences, Budapest (Szentkirályi u. 28.)
Organiser: Research Center for Competition Policy and Future Economies, PPCU

Overview

The third edition of the Forum combined three themes in one day: a broad update on where EU State aid control stands, a panel on State aid in the defence sector, and an afternoon panel on the private enforcement of State aid law through national courts, with a focus on contract law. The common thread was that State aid control is in a period of transition. The rules are being modernised, defence and industrial policy are pushing against them, and national courts are slowly becoming a more important enforcement route, even though they are still rarely used.

Pál Szilágyi (director of the Research Center) opened the day with a welcome address, and Tihamér Tóth (judge of the General Court of the EU and professor at PPCU) chaired the morning panel and gave the closing remarks.

First panel: Recent developments and challenges at EU and Member State level

Chair: Tihamér Tóth

Andrea Bomhoff (DG Competition, European Commission): recent developments in State aid control. The presentation outlined a rich rulebook-revision agenda, with most items aimed at adoption in December 2026 and entry into force in January 2027:

• General Block Exemption Regulation (GBER): the consultation (February–April 2026) drew around 570 replies, with the most reactions on horizontal provisions, environmental aid, regional aid, risk finance and R&D&I. A revised draft was shared with Member States in July–September 2026. Announced changes include a broader "undertakings in difficulty" definition that is friendlier to start-ups, a clearer definition of "undertaking", adjusted regional aid maps for the eastern border regions, technology neutrality, and a new GBER article on aid to the press for SMEs.
• Rescue and restructuring Guidelines: a review of the "undertaking in difficulty" definition and the inclusion of the steel sector.
• Regional aid Guidelines: a statistical update, a new list of "a" and "c" areas and a predefined "c" category for eastern border regions. The revised maps are to apply from 2028 (2028–2034), with a mid-term review in 2030.
• Guarantee Notice: following the evaluation published in October 2025, the aims are accurate market-conform pricing, preventing indirect aid to lenders and reducing red tape. A targeted consultation with Member States is planned for Q4 2026.
• Aviation Guidelines: operating aid for airports up to 1 million passengers a year during a five-year transition, investment aid up to 3 million passengers (with green conditionality for new capacity), and a simplified competition assessment over a 150 km / 90 minute catchment area. Adoption is planned for March/April 2027.
• Other files: a revision of the Banking Communication (consolidating six communications), an evaluation of the Broadcasting Communication, and guidance published in July 2026 on social investment and on carbon contracts for difference.
• Temporary Crisis and Transition Framework (March 2022–December 2025): EUR 835 billion was approved, of which EUR 240 billion was actually granted. Germany, Italy and France were the largest spenders in absolute terms, and Hungary and Romania were the largest in relation to GDP.

Her closing message was that State aid control has a growing role and a close link with regulatory initiatives (CISAF and others), but its fundamentals remain.

Second panel: State aid in the defence sector

Chair: Eszter Hargita (Hungarian State Aid Monitoring Office)

Péter Staviczky (Permanent Representation of Hungary to the EU)

• Defence markets are unusual: the government is often the sole or main buyer and shapes the industry's size, structure, prices and exports.
• Traditional approach: Article 346 TFEU lets Member States protect essential security interests, but it is interpreted strictly. It is not enough that a product is suited to military use (Augusta, C-337/05). The product must have been specifically designed for exclusively military purposes (Finnish turntable, C-615/10). The burden of proof lies on the Member State, and Hellenic Shipyards (military/civilian split of 75/25) is the standard example.
• Difficulties: mixed activities, dual-use products, cooperation with research organisations and the handling of classified information.
• New reality: the EU created DG DEFIS and the European Defence Fund, the European Peace Facility (EUR 17 billion) and SAFE (EUR 150 billion in long-maturity loans), and the EIB is increasing its defence financing.
• Way forward: preferential GBER rules (cumulation with EDF and R&D), a new Commission–Member States forum for mapping cases, and possible guidelines on compatibility. Article 107(3)(c) leaves wide discretion, while Article 346 only gives flexibility on compatibility and not on the notification obligation itself. The objective of the exercise is still not set.

Prof. Caroline Buts (Vrije Universiteit Brussel)

• Her title was "State aid in motion, but not adrift". She argued that modernising the rules is not the same as deregulating them: it needs better choices and fast procedures.
• Article 346 is often presented as a way out of State aid rules, but it is narrow, covers only arms, munitions and war material, and cannot justify broad strategic autonomy policies.
• The layered system (de minimis, block exemption, notified schemes and cases) offers many routes. Defence R&D&I aid (GBER, the R&D&I Framework, CISAF, IPCEI, EDF co-funding) is a "safe bridge between readiness and competition", with dual use as a key consideration.
• She raised open questions: whether State aid control is moving from fixing market failures to a more "mission-oriented" approach, which measures deserve flexible rules, and the risk of global subsidy races. She stressed the importance of ex-post evaluation.

Áron Kovalóczy (DLA Piper Business Advisory)

A more economic and industry-focused presentation: - Why defence markets fail without the state: one buyer, few suppliers, volatile demand, very high fixed costs, politically restricted exports and decades-long contracts. - Capacity gap: EU defence expenditure is expected to rise from EUR 259 billion (2021) to EUR 454 billion (2026), and NATO allies agreed on 5% of GDP by 2035. But Europe has "largely solved the funding problem, not the capacity problem": 78% of the EUR 75 billion spent on equipment procurement in June 2022–June 2023 went to non-EU suppliers (80% of that to the US). - Scale and ownership: one US prime exceeds the top five EU primes combined (about 4x industrial scale gap against a roughly 2x spending gap). About three quarters of European arms revenue sits in companies with state equity or special rights, against 5% in the US. - Consolidation and financing: consolidation and demand aggregation need to speed up. Major European banks generally allow conventional defence financing, but defence SMEs and innovators face a financing gap of roughly EUR 2 billion in equity and EUR 1–2 billion in debt, according to the 2024 Commission study. The EU toolbox (EDF, EDIP, ASAP, EUDIS and EIB programmes) now covers much of the financing chain. - Appendix of State aid cases (Hellenic Shipyards, IZAR, Navantia, Crist, PZL Hydral, C-93/17 Commission v Greece) showing that the military portion may fall under Article 346 while civilian support stays subject to State aid rules.

Third panel: Private enforcement of State aid law – contract law implications

Afternoon sessions chaired by Gábor Fejes (DLA Piper)

Daniel Colgan (DLA Piper, Brussels)

• Framework: Article 108(3) TFEU imposes a standstill obligation with direct effect. The Commission has exclusive competence to assess compatibility, while national courts enforce standstill, order recovery, apply the GBER and hear damages claims.
• Validity under national law: EU law (from Fédération Nationale du Commerce Extérieur, C-354/90, onwards) does not prescribe a particular consequence for the granting act, but courts must draw "all the necessary inferences" on validity, recovery and interim measures. National approaches diverge: in France unlawfulness does not by itself nullify a measure, while in Germany a breach of the notification obligation can lead to nullity.
• Key case law: Residex (national courts may cancel guarantees implementing unlawful aid), CELF and Viasat (where aid is later found compatible, interest is still due for the period of unlawfulness), Klausner Holz and Lucchini (res judicata does not block consequences) and RegioJet (C-700/22: the Commission's 10-year limitation period does not limit national courts).
• Damages remain rare: according to the 2019 Commission study (2007–2017), 66% of claims got no remedy, 7% led to a recovery order, 2% to interim measures and only 1% to damages. Reasons include unfamiliarity with the rules, the burden of proof, the absence of a parallel Commission investigation and unclear legal bases.
• Practical drafting tips: market-economy-operator documentation and independent valuations, State aid compliance warranties, standstill and condition-precedent clauses, clawback and termination rights, and severability. Contractual risk allocation cannot prevent public-law recovery.

Ákos Mohay (European Investment Bank) – the lender's perspective

• Public guarantees are normally structured so that no notification is needed ("no aid" under the 2008 Guarantee Notice, or non-economic activity, legal monopoly, public service compensation, or a block exemption).
• Guarantees are special because the lender is a party to the legal relationship, so State aid compliance can affect whether the guarantee is enforceable. After Residex, the consequence is left to national law, with the objective of restoring the earlier competitive situation.
• National courts have strong tools (suspension, interim relief, recovery, invalidation), but these are under-used because of limited expertise, the burden of proof, litigation costs and the difficulty of suing the State.
• Takeaways for lenders: private enforcement is no longer marginal, national remedies can be more disruptive than Commission enforcement, and lenders need their own due diligence. The central question for the Guarantee Notice revision is whether a lender that is not a beneficiary should lose its guarantee because the grantor got the State aid analysis wrong.

Nicole Deneka (University of Krakow) – experience from CEE jurisdictions

Three national court cases, all showing a reluctance to invalidate contracts: - Poland (Warsaw Court of Appeal, VI ACa 74/13): a gas transmission restructuring agreement on employee liabilities (PLN 664,105.35 claimed). The defendant's State aid defence failed because State aid was not proven, with the burden of proof on the defendant. The court added that even unlawful aid would lead to recovery from the beneficiary, not invalidity of the agreement. - Slovakia (Trnava District Court, 39C/30/2017): the sale of municipal land for EUR 1 for a football stadium. The city's claim for invalidity (§ 39 Civil Code) or for Commission approval as a condition precedent (§ 47) was rejected. The contracts stayed valid, and the court said unlawful aid would mean repayment, not invalidity. The investor had a contingent claim of over EUR 32 million. The court noted that the parties could have made Commission approval an express condition precedent. - Czechia (RegioJet, Municipal Court in Prague, 1 Cm 6/2015): the 2008 sale of part of České dráhy for CZK 11.852 billion against an alleged value of CZK 4.770 billion (alleged advantage of CZK 7.082 billion). The applicants sought repayment and interest, not invalidity. The mandatory valuation procedure had been followed.

Overall takeaways

1. The rulebook is being rewritten. GBER, regional aid, restructuring, aviation and guarantee rules are all heading for adoption around December 2026–2027, with a clear aim of simplification and support for strategic industries.
2. Defence is the new pressure point. Speakers agreed that Article 346 is narrow and that the real room for manoeuvre lies in the compatibility rules and R&D&I aid. Whether the Commission will issue dedicated guidance is still open.
3. Private enforcement is powerful in theory and thin in practice. Both EU case law and the Commission statistics show strong tools but very few remedies, and the CEE examples show national courts tending to favour recovery over invalidating contracts.
4. Practical advice for contracts: build State aid risk into the drafting from the start, with documented market-conformity, conditions precedent, clawback and severability. For lenders, run independent due diligence on guarantees.
5. For Hungary specifically, the Commission's remark that Hungary and Romania were the biggest users of the Temporary Crisis and Transition Framework relative to GDP stood out.