State Aid Law Blog

State Aid Uncovered Blog

In Lexxion’s State Aid Uncovered blog, Prof. Phedon Nicolaides publishes weekly critical analyses of recent State aid judgments and decisions. Each post presents the key points of a court judgment or EU Commission decision, places it in the context of similar case law or practice, assesses the underlying reasoning and highlights any inconsistencies or contradictions.

Guest contributions from other State aid experts will also be published on the blog at irregular intervals to complement the content of the blog posts.

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State Aid Uncovered ×

Can a Tax (rather than a Tax Exemption) Confer a Selective Advantage?

A tax that is levied at one level of government and does not apply to products and activities at a different level of government need not be selective. Introduction A tax exemption normally confers a selective advantage, unless it is justified by the logic of the tax. Counterintuitively, a tax itself can be selectively advantageous if its scope is too […]

Presumed v Actual Compatibility of State aid with the Internal Market

State aid granted on the basis of the GBER may not be considered as authorised by the Commission. The task of Member States is to ensure that all of the requirements of the GBER are fulfilled. In particular, Member States must confirm the incentive effect of aid to large enterprises. Introduction[1]   In March 2019, the Court of Justice delivered […]

Investor Protection and Existing Aid

Aid granted before accession to the EU may not be assessed by the Commission. Introduction It is fairly safe to say that in the sixty years of case law on State aid, the Court of Justice has ruled that there are just four instances in which payment of public money to an undertaking does not constitute State aid on the […]

The Commission Must Explain its Decision

A Commission decision that affects the legal position of an undertaking is actionable before EU courts. The opening of the formal investigation procedure must lead the Member State concerned to suspend the aid measure and may result in a recovery ruling by a national court. The Commission must be consistent in its reasoning. If it cannot use certain information at […]

Many Tax Rulings Do Not Make a Single Aid Scheme

The autonomy that Member States enjoy in the field of direct taxation must be exercised in compliance with EU State aid law. A State aid measure is considered to be a “scheme” when (a) no further implementing acts are necessary, (b) the granting authority has no discretion in how the measure is applied and (c) the measure defines the eligible […]

Services of General Economic Interest: Proper Definition and Avoidance of Overcompensation

Member States need to demonstrate that public service obligations imposed on undertakings are necessary and proportional to the need for public service. A change in the funding of public services does not constitute new aid if it does not alter its objectives, the beneficiaries or the amount of aid by more than 20%.   Introduction It is a well-established principle […]

The Date and Scope of Public Service Compensation

Aid is deemed to be granted on the date the beneficiary undertaking acquires the legal right to it, regardless of whether it is actually paid on that date. It is not enough for a public authority to define the service that it wants an operator to provide and the price that it should charge. It must also define where and […]

State Aid Provisions in the Draft Agreement on the Withdrawal of the UK from the EU

The agreement on the withdrawal of the UK from the EU requires compliance with EU State aid rules.   Introduction   On 14 November 2018, EU and UK negotiators finalised the text of the Agreement on the withdrawal of the UK from the EU.[1] The Agreement has to be ratified by the UK and the other 27 Member States. Given immediate […]

The European Commission’s Code of Best Practices on State Aid Procedures

Closer cooperation between Commission services and Member States.   Introduction   The European Commission, DG Competition, published on 16 July 2018 on its website and then on 19 July 2018 in the Official Journal of the EU a Code of Best Practices for the Conduct of State Aid Control Procedures.[1]The purpose of the Code is to provide guidance to Member […]

Remedying the Damage of a Natural Disaster through Incentives for New Investments

Damage from natural disasters can be remedied in the short-term through direct compensation or in the longer-term through investment subsidies to support new productive capacity.   Introduction   This article reviews a rather straightforward case which, however, is also quite unusual. It concerns a measure to remedy the effect of recent earthquakes in Italy. What makes it unusual is that […]

State Aid Uncovered ×

Can a Tax (rather than a Tax Exemption) Confer a Selective Advantage?

A tax that is levied at one level of government and does not apply to products and activities at a different level of government need not be selective. Introduction A tax exemption normally confers a selective advantage, unless it is justified by the logic of the tax. Counterintuitively, a tax itself can be selectively advantageous if its scope is too […]

Presumed v Actual Compatibility of State aid with the Internal Market

State aid granted on the basis of the GBER may not be considered as authorised by the Commission. The task of Member States is to ensure that all of the requirements of the GBER are fulfilled. In particular, Member States must confirm the incentive effect of aid to large enterprises. Introduction[1]   In March 2019, the Court of Justice delivered […]

Investor Protection and Existing Aid

Aid granted before accession to the EU may not be assessed by the Commission. Introduction It is fairly safe to say that in the sixty years of case law on State aid, the Court of Justice has ruled that there are just four instances in which payment of public money to an undertaking does not constitute State aid on the […]

The Commission Must Explain its Decision

A Commission decision that affects the legal position of an undertaking is actionable before EU courts. The opening of the formal investigation procedure must lead the Member State concerned to suspend the aid measure and may result in a recovery ruling by a national court. The Commission must be consistent in its reasoning. If it cannot use certain information at […]

Many Tax Rulings Do Not Make a Single Aid Scheme

The autonomy that Member States enjoy in the field of direct taxation must be exercised in compliance with EU State aid law. A State aid measure is considered to be a “scheme” when (a) no further implementing acts are necessary, (b) the granting authority has no discretion in how the measure is applied and (c) the measure defines the eligible […]

Services of General Economic Interest: Proper Definition and Avoidance of Overcompensation

Member States need to demonstrate that public service obligations imposed on undertakings are necessary and proportional to the need for public service. A change in the funding of public services does not constitute new aid if it does not alter its objectives, the beneficiaries or the amount of aid by more than 20%.   Introduction It is a well-established principle […]

The Date and Scope of Public Service Compensation

Aid is deemed to be granted on the date the beneficiary undertaking acquires the legal right to it, regardless of whether it is actually paid on that date. It is not enough for a public authority to define the service that it wants an operator to provide and the price that it should charge. It must also define where and […]

State Aid Provisions in the Draft Agreement on the Withdrawal of the UK from the EU

The agreement on the withdrawal of the UK from the EU requires compliance with EU State aid rules.   Introduction   On 14 November 2018, EU and UK negotiators finalised the text of the Agreement on the withdrawal of the UK from the EU.[1] The Agreement has to be ratified by the UK and the other 27 Member States. Given immediate […]

The European Commission’s Code of Best Practices on State Aid Procedures

Closer cooperation between Commission services and Member States.   Introduction   The European Commission, DG Competition, published on 16 July 2018 on its website and then on 19 July 2018 in the Official Journal of the EU a Code of Best Practices for the Conduct of State Aid Control Procedures.[1]The purpose of the Code is to provide guidance to Member […]

Remedying the Damage of a Natural Disaster through Incentives for New Investments

Damage from natural disasters can be remedied in the short-term through direct compensation or in the longer-term through investment subsidies to support new productive capacity.   Introduction   This article reviews a rather straightforward case which, however, is also quite unusual. It concerns a measure to remedy the effect of recent earthquakes in Italy. What makes it unusual is that […]

State Aid Uncovered ×

Can a Tax (rather than a Tax Exemption) Confer a Selective Advantage?

A tax that is levied at one level of government and does not apply to products and activities at a different level of government need not be selective. Introduction A tax exemption normally confers a selective advantage, unless it is justified by the logic of the tax. Counterintuitively, a tax itself can be selectively advantageous if its scope is too […]

Presumed v Actual Compatibility of State aid with the Internal Market

State aid granted on the basis of the GBER may not be considered as authorised by the Commission. The task of Member States is to ensure that all of the requirements of the GBER are fulfilled. In particular, Member States must confirm the incentive effect of aid to large enterprises. Introduction[1]   In March 2019, the Court of Justice delivered […]

Investor Protection and Existing Aid

Aid granted before accession to the EU may not be assessed by the Commission. Introduction It is fairly safe to say that in the sixty years of case law on State aid, the Court of Justice has ruled that there are just four instances in which payment of public money to an undertaking does not constitute State aid on the […]

The Commission Must Explain its Decision

A Commission decision that affects the legal position of an undertaking is actionable before EU courts. The opening of the formal investigation procedure must lead the Member State concerned to suspend the aid measure and may result in a recovery ruling by a national court. The Commission must be consistent in its reasoning. If it cannot use certain information at […]

Many Tax Rulings Do Not Make a Single Aid Scheme

The autonomy that Member States enjoy in the field of direct taxation must be exercised in compliance with EU State aid law. A State aid measure is considered to be a “scheme” when (a) no further implementing acts are necessary, (b) the granting authority has no discretion in how the measure is applied and (c) the measure defines the eligible […]

Services of General Economic Interest: Proper Definition and Avoidance of Overcompensation

Member States need to demonstrate that public service obligations imposed on undertakings are necessary and proportional to the need for public service. A change in the funding of public services does not constitute new aid if it does not alter its objectives, the beneficiaries or the amount of aid by more than 20%.   Introduction It is a well-established principle […]

The Date and Scope of Public Service Compensation

Aid is deemed to be granted on the date the beneficiary undertaking acquires the legal right to it, regardless of whether it is actually paid on that date. It is not enough for a public authority to define the service that it wants an operator to provide and the price that it should charge. It must also define where and […]

State Aid Provisions in the Draft Agreement on the Withdrawal of the UK from the EU

The agreement on the withdrawal of the UK from the EU requires compliance with EU State aid rules.   Introduction   On 14 November 2018, EU and UK negotiators finalised the text of the Agreement on the withdrawal of the UK from the EU.[1] The Agreement has to be ratified by the UK and the other 27 Member States. Given immediate […]

The European Commission’s Code of Best Practices on State Aid Procedures

Closer cooperation between Commission services and Member States.   Introduction   The European Commission, DG Competition, published on 16 July 2018 on its website and then on 19 July 2018 in the Official Journal of the EU a Code of Best Practices for the Conduct of State Aid Control Procedures.[1]The purpose of the Code is to provide guidance to Member […]

Remedying the Damage of a Natural Disaster through Incentives for New Investments

Damage from natural disasters can be remedied in the short-term through direct compensation or in the longer-term through investment subsidies to support new productive capacity.   Introduction   This article reviews a rather straightforward case which, however, is also quite unusual. It concerns a measure to remedy the effect of recent earthquakes in Italy. What makes it unusual is that […]

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