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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9. July 2024  |   State Aid Uncovered by Phedon Nicolaides

The Commission May Authorise a Public Measure only if it Constitutes State Aid
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Introduction Sometimes the Commission is uncertain whether a public measure constitutes State aid. Nonetheless, it decides not raise objections on the grounds that if the measure constituted State aid, it would be compatible with the internal market. One can understand why the Commission follows this approach. If it is not sure whether a measure falls outside the scope of Article […]
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2. July 2024  |   State Aid Uncovered by Phedon Nicolaides

Green Energy Certificates
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Introduction Certificates that confirm that an undertaking has bought a certain amount of electricity from renewable sources do not normally involve State aid because they are not traded. However, when they are tradeable and are granted by a public authority for free or for a fee that falls below their market value, they normally involve State aid as they confer […]
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25. June 2024  |   by Phedon Nicolaides

Aid Measures with Limited Beneficiaries
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Introduction During the covid-19 pandemic Member States granted State aid to undertakings they considered important for their economies or for maintaining their connectivity with the rest of the world. Ryanair appealed against multiple Commission decisions authorising that aid. Ryanair succeeded in some of its challenges on technical issues. It lost all other cases on issues of principle. On 6 June […]
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18. June 2024  |   State Aid Uncovered by Phedon Nicolaides

Obligations Imposed by the State Cannot Justify Tax Exemptions
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Introduction Over the past decade or so, the European Commission has found that multiple port operators have benefitted from State aid in the form of tax exemptions. This aid was in all cases found to be incompatible with the internal market, despite the claims of the port operators that the state had imposed on the public service obligations or that […]
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11. June 2024  |   State Aid Uncovered by Phedon Nicolaides

Member States May Grant State Aid to Single Beneficiaries
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Introduction The European Court of Justice confirmed, once more, on 30 May 2024, in case C-353/21 P, Ryanair v Commission, that Member States do not have to grant State aid to all undertakings that may be affected by a serious economic disturbance such as a pandemic.2 This is because Member States do not have unlimited resources and because they may […]
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4. June 2024  |   State Aid Uncovered by Phedon Nicolaides

Special Tax Treatment for a Major Infrastructure Project
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Introduction In April 2013, the Commission received a complaint alleging that State aid had been granted to the Oresund fixed link. The link is a major transport infrastructure project consisting of a bridge, an artificial island and tunnels between Denmark and Sweden. In October 2014, the Commission concluded that the public funding of the hinterland road and rail connections was […]
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28. May 2024  |   State Aid Uncovered by Phedon Nicolaides

A Research Project Based on Collaboration with a Research Organisation
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Introduction After pre-notification contacts, Croatia notified, in March 2023, State aid amounting to a EUR 179.5 million for an R&D project regarding the development of an innovative autonomous electric vehicle [a “robo-taxi”]. The aid, in the form of a grant, was to be provided to Project 3 Mobility LLC [P3M]. The Commission approved it in decision SA.101759.1 The aid beneficiary, […]
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21. May 2024  |   State Aid Uncovered by Phedon Nicolaides

Authorisation of State Aid after the Start of a Project
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Introduction In June 2021, the European Commission, in decision SA.55526, approved an amount of EUR 167 million of State aid for the construction and operation of a liquefied natural gas [LNG] terminal close to Alexandroupolis in northern Greece. In December 2022, Greece notified a measure involving additional State aid of EUR 106 million for the same project. The Commission authorised […]
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14. May 2024  |   State Aid Uncovered by Phedon Nicolaides

Restructuring State Aid
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Introduction State aid to failing undertakings is the most distortionary form of public subsidies. They prevent the market exit of inefficient companies. For this reason, State aid for rescue or restructuring of undertakings in difficulty must always be notified to the Commission which examines each case very carefully and allows this kind of aid only when, among other things, the […]
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7. May 2024  |   State Aid Uncovered by Phedon Nicolaides

Public Procurement and State Aid
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Introduction A faulty public procurement procedure or the use of discriminatory selection criteria can confer an advantage on the chosen undertaking that may constitute an advantage in the meaning of Article 107(1) TFEU. The result will be infringement of both public procurement rules and State aid rules. A recent Commission decision, SA.47650, is instructive on how Member States should design […]
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7. November 2023  |   State Aid Uncovered by Phedon Nicolaides

Whether a Tax Measure Grants New Aid Must also be Assessed in the Context of the Relevant National Case Law
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Introduction The application of the concept of selectivity to tax measures requires a comparison of undertakings or activities that are in a similar factual or legal situation. A tax measure that differentiates between similar undertakings or activities is selective in the meaning of Article 107(1) TFEU, unless the differentiation can be justified on objective reasons. It follows that the proper […]
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31. October 2023  |   State Aid Uncovered by Phedon Nicolaides

A Complex Measure of Investment and Operating Aid to an Airport and Airlines (Part II)
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Introduction In July 2008, the Commission received complaints alleging that France granted State aid to the operator of La Rochelle airport and certain airlines. Almost four years later, in February 2012, the Commission decided to open the formal investigation procedure. It eventually adopted a decision in July 2022 [Commission decision 2023/1683] which found compatible State aid for the airport, incompatible […]
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24. October 2023  |   State Aid Uncovered by Phedon Nicolaides

A Complex Measure of Investment and Operating Aid to an Airport and Airlines (Part I)
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Introduction In July 2008, the Commission received complaints alleging that France granted State aid to the operator of La Rochelle airport and certain airlines. Almost four years later, in February 2012, the Commission decided to open the formal investigation procedure. It eventually adopted a decision in July 2022 [Commission decision 2023/1683] which found compatible State aid for the airport, incompatible […]
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17. October 2023  |   State Aid Uncovered by Phedon Nicolaides

Compensation for Damage
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Introduction On 28 September 2023, the Court of Justice, in case C-320/21 P, Ryanair v European Commission, delivered its first judgment in a series of appeals brought by Ryanair challenging the dismissal by the General Court of its action in multiple cases seeking the annulment of various Commission decisions authorising aid to airlines during the covid-19 pandemic. Both before the […]
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10. October 2023  |   State Aid Uncovered by Phedon Nicolaides

Advance Tax Rulings
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Introduction In 2016, the Commission found, in decision 2016/1699, that advance tax rulings [ATRs] that had been provided by Belgium to multi-national companies [MNCs] with establishments in Belgium constituted State aid because the ATRs set the taxable income of those companies according to a hypothetical average income rather than their actual income. The profit that exceeded that hypothetical average was […]
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2. October 2023  |   State Aid Uncovered by Phedon Nicolaides

The Harm Caused by State aid and the Delineation of the Relevant Market
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Introduction A competitor of an aid recipient who wants to challenge a Commission decision authorising State aid must either show that the aid harms it directly and individually – i.e. its interests are seriously affected to a larger extent than anyone else – or that the Commission should have had doubts about the compatibility of the aid during the preliminary […]
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26. September 2023  |   State Aid Uncovered by Phedon Nicolaides

Non-imposition of Fines on Non-illegal Behaviour
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Introduction Advantage is any benefit that an undertaking obtains from the intervention of the state. In some situations, however, an undertaking may derive an advantage the non-intervention of the state or, more broadly, from the failure of the state to act. This would be the case where the state does not charge a fee to a user of a state […]
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12. September 2023  |   State Aid Uncovered by Phedon Nicolaides

Decarbonisation
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Introduction The Netherlands intends to reduce the emission of greenhouse gasses [GHG] by 55% by the year 2050. For this reason, in June 2023 it notified to the Commission a new version of a scheme, called the “Stimulering Duurzame Energieproductie en Klimaattransitie” [SDE++] which loosely translated means incentivising sustainable production of energy and climate transition. Its purpose is to fund […]
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5. September 2023  |   State Aid Uncovered by Phedon Nicolaides

Transition to a Net-Zero Economy
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Introduction Although the TCTF requires notification of aid measures, it seems to be more user-friendly than State aid guidelines. This is because Member States may simply copy its provisions in their local law or administrative instrument and sent it to the Commission. A case in point is a German scheme that is reviewed in this article. It was notified to […]
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29. August 2023  |   State Aid Uncovered by Phedon Nicolaides

Electricity Storage
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Introduction As indicated by its title, the Temporary Crisis and Transition Framework [TCTF] allows for State aid whose purpose goes beyond the immediate relief of the costs of the market disruption caused by the Russian invasion of Ukraine. Europe’s energy policy does not only aim to reduce dependence on Russian gas, but also to shift to low or zero carbon […]
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