Bulgaria's Forest-Land Swaps: A Case Study In Failed State Aid Recovery

Introduction

One of the most important aspects of free and undistorted markets in the European Union ("EU") is the recovery of unlawful and incompatible State aid. Recovery ensures that any distortion of competition is corrected retroactively by re-establishing, as far as possible, the situation that existed before the unlawful aid was granted.¹ This principle is anchored in Article 108(3) of the Treaty on the Functioning of the European Union ("TFEU"), which obliges Member States to notify the European Commission (the "Commission") of any planned State aid measures and to await the outcome of the Commission's investigation before implementing them. Where the Commission concludes that a measure constitutes incompatible State aid, it is empowered to require the Member State concerned to recover the aid from the beneficiary.²