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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19. March 2024  |   by Phedon Nicolaides

Applying the Funding Gap Method to an Important Project of Common European Interest – Part I
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Introduction On 28 February 2024, the General Court delivered an important judgment in case T-390/20, Scandlines v Commission.(1) The judgment is important because it interpreted the Commission guidelines on Important Projects of Common European Interest [IPCEI], the funding gap methodology for determining the necessary amount of aid and the 2008 Commission Notice on state guarantees. Scandlines sought annulment of Commission […]
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12. March 2024  |   State Aid Uncovered by Phedon Nicolaides

Public Infrastructure and State Prerogatives
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Introduction On 28 February 2024, the General Court delivered two important judgments on the presence of State aid and its compatibility with the internal market in connection to public funding of the Fehmarn Fixed Link between Denmark and Germany. The Fixed Link is a major infrastructure project consisting of tunnels, bridges and access road and rail connections. The judgments of […]
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5. March 2024  |   State Aid Uncovered by Phedon Nicolaides

State Aid and Arbitration of Disputes
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Introduction On 22 February 2024, the Court of Justice [CJEU] delivered its judgment in joined Cases C-701/21 P and C-739/21 P, Mytilinaios v DEI & European Commission. Mytilinaios, a Greek company, and the Commission appealed against the judgment of the General Court in case T-639/14 RENV, DEI v Commission, concerning arbitration of a dispute between Mytilinaios and DEI, the main […]
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27. February 2024  |   State Aid Uncovered by Phedon Nicolaides

A Large Regional Investment Project in Spain
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Introduction Most State aid to “large” investment projects is granted by the Member States in Central and Eastern Europe. Moreover, most of the aid goes to induce companies to locate their projects in those countries and to overcome regional handicaps that make the investments less profitable or even loss-making than in other locations. By contrast, regional aid granted to large […]
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20. February 2024  |   State Aid Uncovered by Phedon Nicolaides

Another Case of Indirect State Aid
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Introduction On 19 May 2021, the General Court, in case T-643/20, Ryanair v Commission, annulled Commission decision SA.57116 by which it authorised State aid in favour of KLM in the context of the measures implemented by the Dutch government to address the covid-19 pandemic. In July 2021, the Commission re-adopted its original decision without the errors that had been identified […]
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13. February 2024  |   State Aid Uncovered by Phedon Nicolaides

State Resources, Control and Imputability
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Introduction A public measure can be classified as State aid only when it is funded from state resources. Measures funded from the budgets of public authorities are always considered to be supported by state resources. However, measures not funded from state budgets may still be supported by state resources. This is because, rather counterintuitively, the concept of state resources covers […]
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6. February 2024  |   State Aid Uncovered by Phedon Nicolaides

Indirect Beneficiaries of State aid
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Introduction The prohibition of State aid in Article 107(1) TFEU applies both to direct and indirect beneficiaries. The direct beneficiary is the formal recipient of the aid. However, the formal recipient may only act as an intermediary through which aid flows to third parties or may in fact be required by the aid measure to pass on some or most […]
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30. January 2024  |   State Aid Uncovered by Phedon Nicolaides

Non-contractual Liability in the Field of State aid
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Introduction The Commission, in its control of State aid, occasionally makes mistakes. EU courts may annul erroneous Commission decisions. This raises the question whether affected undertakings may ask for compensation. The answer is that in order to be eligible for compensation, an undertaking must have suffered damage as a result of an error that constitutes a “serious breach” of EU […]
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23. January 2024  |   State Aid Uncovered by Phedon Nicolaides

Public Service Compensation and Indexation of Costs
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Introduction Member States may impose public service obligations [PSO] on undertakings and compensate them for the extra costs they incur. The public service compensation [PSC] may also include reasonable profit. Naturally, the PSC may not cover costs that are not related to the PSO or the service of general economic interest [SGEI]. So, for multi-service providers, account separation is absolutely […]
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16. January 2024  |   State Aid Uncovered by Phedon Nicolaides

Undertakings May also Carry out Non-economic Activities
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Introduction An undertaking is any entity that carries out economic activities regardless of how it is classified in national law or how it is financed. The General Court, in its judgment of 20 December 2023, in case T-166/21, Autorità di sistema portuale del Mar Ligure occidentale v European Commission, also clarified that if an undertaking also carries out tasks assigned […]
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23. January 2024  |   State Aid Uncovered by Phedon Nicolaides

Public Service Compensation and Indexation of Costs
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Introduction Member States may impose public service obligations [PSO] on undertakings and compensate them for the extra costs they incur. The public service compensation [PSC] may also include reasonable profit. Naturally, the PSC may not cover costs that are not related to the PSO or the service of general economic interest [SGEI]. So, for multi-service providers, account separation is absolutely […]
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16. January 2024  |   State Aid Uncovered by Phedon Nicolaides

Undertakings May also Carry out Non-economic Activities
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Introduction An undertaking is any entity that carries out economic activities regardless of how it is classified in national law or how it is financed. The General Court, in its judgment of 20 December 2023, in case T-166/21, Autorità di sistema portuale del Mar Ligure occidentale v European Commission, also clarified that if an undertaking also carries out tasks assigned […]
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9. January 2024  |   State Aid Uncovered by Phedon Nicolaides

National Court May Order Recovery of Illegal Aid that Is Considered Existing Aid
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Introduction The European Commission is required by Regulation 2015/1589 to order recover of State aid that it finds to be incompatible with the internal market. However, it may not order recovery of illegal aid – i.e. non-notified aid – until it assesses its compatibility with the internal market. By contrast, national courts have no competence to assess the compatibility of […]
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2. January 2024  |   State Aid Uncovered by Phedon Nicolaides

Selectivity
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Introduction On 14 December 2023, the Court of Justice, in its judgment in joined cases C-693/21 P and C-698/21 P, EDP España & Naturgy Energy Group v European Commission, faulted the Commission for failing to provide a sufficient explanation why a Spanish measure was selective in the meaning of Article 107(1) TFEU.1 According to the Court of Justice, the Commission […]
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27. December 2023  |   State Aid Uncovered by Phedon Nicolaides

The Consequence of the Tax Autonomy of Member States
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Introduction The favourable tax treatment of multinational companies has long been in the sights of the Commission. However, the recent judgments on Fiat [C‑885/19 P, Fiat v Commission] and Engie [C‑454/21 P, Engie v Commission] have made it clear that Commission may not rely on principles which are not recognised in the tax laws of Member States. This fundamental rule […]
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21. December 2023  |   State Aid Uncovered by Phedon Nicolaides

Recovery of Incompatible Aid in an Agreement between an Airport and an Airline
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Introduction On 23 November 2023, the Court of Justice, in case C-758/21 P, Ryanair v European Commission, rejected Ryanair’s action against the judgment of the General Court in case T-448/18, Ryanair v European Commission.1 In its judgment, the General Court dismissed Ryanair’s appeal against Commission decision 2018/628. In that decision, the Commission found, among other things, that Austria had granted […]
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19. December 2023  |   State Aid Uncovered by Phedon Nicolaides

Indirect Advantage
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Introduction It is an established principle in the State aid case law that Article 107(1) TFEU applies both to direct and possibly indirect aid beneficiaries. Yet, it is not always easy to identify any indirect beneficiaries. On 15 November 2023, the General Court, in case T-167/21, European Gaming and Betting Association v European Commission, faulted the latter for failing to […]
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11. December 2023  |   State Aid Uncovered by Phedon Nicolaides

Member States Have Discretion to Determine their Own Tax System and Interpret its Provisions
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Introduction In the landmark cases on turnover taxes implemented by Hungary and Poland, the Court of Justice censured the European Commission for defining its own hypothetical reference tax system that was different from the relevant tax provisions in those two countries. The Court again faulted the Commission in its more recent judgments on advance tax rulings. Given the discretion of […]
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4. December 2023  |   State Aid Uncovered by Phedon Nicolaides

The Concept of Undertaking and Land Valuation
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Introduction Must an entity that acquires an asset but does not exploit it commercially not be regarded as an undertaking? This was one of two questions that the Court of Justice had to answer on 19 October 2023, in case C-325/22, TS & HI. The answer was no. The second question was how to value land. The answer to that […]
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27. November 2023  |   State Aid Uncovered by Phedon Nicolaides

Compensation for Damage Caused by COVID-19 May be Limited to the Undertakings that Are Most Important to the Economy of a Member Stat
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Introduction On 23 November 2023, Ryanair lost another appeal before the Court of Justice. The Court ruled, in case C-210/21 P, Ryanair v Commission, that the General Court was right to dismiss Ryanair’s request for annulment of a Commission decision that had authorised French aid to compensate airlines for the damage they suffered as a result of the covid-19-related travel […]
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