Judgment of the Court of 11 September 2025 (Case C‑59/23 P): Republic of Austria v European Commission

(Abstract by Nohrcon / AI)*

Background

In 2017, the Commission approved aid for two new reactors at Paks II (EUR 12.5 billion, mainly a EUR 10 billion Russian state loan), while the construction contract had been directly awarded to JSC NIAEP under an intergovernmental agreement. Austria challenged the decision; the General Court (T-101/18) dismissed the action in 2022, and Austria appealed.

Grounds of appeal (core points)

Austria argued that the Commission should have:

• treated the construction (and its direct award) as indissociably linked to the object of the aid; and
• assessed compliance with EU public procurement rules within the state-aid decision, rather than relying on a separate infringement proceeding.

Court’s assessment

• The object of the aid covers the development (design and construction) of the two reactors; excluding construction was an incorrect legal characterisation.
• The direct award of the construction contract is inextricably linked to the object of the aid and may affect the compatibility assessment under Article 108 TFEU; the Commission therefore had to analyse compliance with procurement law.
• The Commission’s mere reference to earlier infringement proceedings could not satisfy its obligation to state reasons for procurement compliance in the aid decision.

Decision (operative part)

The Court set aside the General Court’s judgment and annulled the Commission’s 2017 decision approving the aid, holding that the Commission erred in law by not taking into account aspects indissociably linked to the aid’s object (including the direct award) and by failing to state adequate reasons.

Read the entire judgment here

*This summary may contain errors and does not constitute legal advice or guidance.