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State aid refers to any aid granted by the State through its resources to certain undertakings for the production of particular goods or services, thereby conferring an economic advantage which would not otherwise occur under usual market conditions and which threatens to distort competition and affect trade between Member States.
Aid is considered state aid when it meets the criteria of paragraph 1 of Article 107 of the Treaty on the Functioning of the European Union:
- aid is granted to certain undertakings;
- aid is granted by the State;
- aid is granted through State resources;
- aid confers an economic advantage which would not otherwise occur under usual market conditions;
- aid is conferred on a selective basis;
- aid affects competition and trade between Member States.