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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22. August 2023  |   by Phedon Nicolaides

A Large Investment Project (Part II)
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Introduction According to the latest edition of the State aid Scoreboard, in 2021, Member States granted EUR 14 billion of aid to support regional development. That amount corresponded to about 10% of the total non-crisis aid. What is perhaps more interesting is that close to EUR 12.5 billion or 90% of the total regional aid was granted on the basis […]
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14. August 2023  |   State Aid Uncovered by Phedon Nicolaides

A Large Investment Project (Part I)
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Introduction According to the latest edition of the State aid Scoreboard, in 2021, Member States granted EUR 14 billion of aid to support regional development. That amount corresponded to about 10% of the total non-crisis aid. What is perhaps more interesting is that close to EUR 12.5 billion or 90% of the total regional aid was granted on the basis […]
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7. August 2023  |   State Aid Uncovered by Phedon Nicolaides

Decarbonisation of Steel Production
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Introduction Many, perhaps the majority, of notifications on the basis of the Guidelines on Climate, Environmental Protection and Energy [CEEAG] concern decarbonisation of production processes. In this context, large amounts of State aid have been funnelled to the decarbonisation of steel production. ArcelorMittal has been a major beneficiary. In February 2023, Spain granted EUR 460 million to support ArcelorMittal to […]
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1. August 2023  |   by Phedon Nicolaides

Profitability as a Criterion of the Compatibility of State Aid with the Internal Market
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Introduction When the state has a realistic prospect of making profit, its financial transactions with third parties do not constitute State aid. The absence of profit is a strong indicator of the presence of State aid but not necessarily its compatibility with the internal market. For State aid to be compatible with the internal market it must, among other things, […]
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25. July 2023  |   by Phedon Nicolaides

I) State Aid Guidelines & II) Repayment of State Aid
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Introduction This article reviews two judgments of the Court of Justice: On the Greenhouse Gas Emissions Guidelines and on a structural funds regulation. No Member State has ever succeeded in challenging the Commission’s State aid guidelines. In the first judgment, a group of undertakings tried to dispute the legality of a set of guidelines. Not surprisingly, they failed. The second […]
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18. July 2023  |   State Aid Uncovered by Phedon Nicolaides

The Non-economic Nature of a Public Health System and Regional Development
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Introduction This article reviews two judgments: On a public health system and on regional development through capital injections. I. Public health system On 27 April 2023, the Court of Justice rendered its judgment in case C-492/21 P, Casa Regina Apostolorum della Pia Società delle Figlie di San Paolo v European Commission.[1] Casa Regina Apostolorum della Pia Società delle Figlie di […]
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10. July 2023  |   State Aid Uncovered by Phedon Nicolaides

Regional Operating Aid
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Introduction On 21 June 2023, the General Court delivered its judgment in case T-131/21, Região Autónoma da Madeira v European Commission.[1] It rejected the action of the Autonomous Region of Madeira [ARM] by which it sought the annulment of Commission decision 2022/1414 on aid scheme implemented by Portugal for the Madeira Free Zone or Zona Franca da Madeira [ZFM]. The […]
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3. July 2023  |   State Aid Uncovered by Phedon Nicolaides

Transactions at Market Rates Can still Confer an Advantage that Constitutes State aid (PART II)
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Introduction When public authorities buy goods and services for themselves, they have to pay a market price, otherwise they confer an abnormal advantage to the sellers. On 14 June 2023, the General Court, in case T‑79/21, Ryanair & Airport Marketing Services v European Commission, ruled that public authorities still confer an abnormal advantage by buying good and services that they […]
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27. June 2023  |   State Aid Uncovered by Phedon Nicolaides

Transactions at Market Rates Can still Confer an Advantage that Constitutes State aid (PART I)
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Introduction When public authorities buy goods and services for themselves, they have to pay a market price, otherwise they confer an abnormal advantage to the sellers. On 14 June 2023, the General Court, in case T-79/21, Ryanair & Airport Marketing Services v European Commission, ruled that public authorities still confer an abnormal advantage by buying good and services that they […]
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20. June 2023  |   State Aid Uncovered by Phedon Nicolaides

Regulatory Measures Are not State aid & Trade Unions Are not “Interested Party”
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Introduction This article reviews two recent judgments dealing with the concept of state resources and the meaning of “interested party”, respectively. State resources On 8 June 2023, the Court of Justice clarified, by its judgment in case C-50/21, Prestige and Limousine SL, that purely regulatory measures may confer and advantage without, however, granting State aid.1 The Court was responding to […]
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6. December 2022  |   State Aid Uncovered by Phedon Nicolaides

Compliance with State Aid Guidelines
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For aid to be declared compatible with the internal market, all of the formal and substantive provisions of the relevant guidelines must be satisfied. State aid is granted the moment the right to a selective advantage is conferred, even if the actual benefit materialises at a future point in time. Introduction On 26 October 2022, the General Court reiterated, in […]
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15. November 2022  |   State Aid Uncovered by Phedon Nicolaides

No Effect on Trade
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A public measure of purely local character and which does not induce cross-border movement of investors or clients is unlikely to affect trade between Member States. Introduction It is rare to find a judgment that confirms that a particular public measure is not liable to affect trade between Member States. The General Court did so in its judgment of 19 […]
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8. November 2022  |   State Aid Uncovered by Phedon Nicolaides

Natural Disasters and State Aid
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Compensation for damage suffered by undertakings as a result of a natural disaster constitutes State aid. The compensation is compatible with the internal market only if, first, there is a causal relationship between the natural disaster and the damage and, second, the amount of compensation does not exceed the amount of the damage. Introduction Financial assistance in the form of […]
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1. November 2022  |   State Aid Uncovered by Phedon Nicolaides

Research Organisations, their Primary Objectives and their Shareholders
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A research organisation is not required to reinvest any revenue it may generate into its non-economic activities. The fact that the shareholders of a research entity are profit seeking has no decisive impact on its classification as a research organisation. Introduction As governments push universities to engage in more collaborative research with industry, the question increasingly arises where to draw […]
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27. September 2022  |   State Aid Uncovered by Phedon Nicolaides

Compliance with Public Service Obligations Does Not Necessarily Entitle the Providers of Public Services to Compensation
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In the field of bus or rail transportation, Member States may impose either public service obligations through a contract or regulate prices through general rules. Providers of transport services are entitled to compensation only if they are financially worse off as a result of compliance with public service obligations. Introduction It is now a well-established principle in the case law […]
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20. September 2022  |   State Aid Uncovered by Phedon Nicolaides

An Innovative Scheme to Support Individual Borrowers
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Individuals and households are not undertakings. However, any public funding of individuals or households may constitute indirect aid to undertakings. Such aid may be exempted on the basis of Article 107(2)(a) TFEU. Introduction Article 107(1) TFEU applies to indirect State aid as well as to direct aid. Since all State aid has both primary effects [i.e. the benefits that go […]
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13. September 2022  |   State Aid Uncovered by Phedon Nicolaides

State Aid for External Transport Costs
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State aid may be granted to reduce the difference in “external” costs caused by different modes of transport. Introduction Member States have used money from the Recovery and Resilience Fund [RRF] to support the development of less polluting and more energy efficient activities and technologies. A case in point is Spain’s scheme that incentivises the transfer of freight traffic from […]
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6. September 2022  |   State Aid Uncovered by Phedon Nicolaides

Special Economic Zones
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Member States must check that the State aid claimed by undertakings established in special economic zones concern activities that are actually carried out within those zones. Introduction Several Member States have special economic zones in which companies enjoy preferential tax treatment. These zones can be divided into two categories: those that can be found mostly in the new Member States […]
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23. August 2022  |   State Aid Uncovered by Phedon Nicolaides

Compensation for the Net Cost of Public Service Obligations (Part II)
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Public service obligations must be imposed through an act of entrustment that defines clearly the terms of the service and the duration of the obligation. The “reasonable profit” in the public service compensation should reflect the risk borne by the provider. Introduction In 2009, the Commission received several complaints concerning State aid that Italy had granted to the various shipping […]
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16. August 2022  |   State Aid Uncovered by Phedon Nicolaides

Compensation for the Net Cost of Public Service Obligations (Part I)
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Public service obligations must be imposed through an act of entrustment that defines clearly the terms of the service and the duration of the obligation. The “reasonable profit” in the public service compensation should reflect the risk borne by the provider. Introduction In 2009, the Commission received several complaints concerning State aid that Italy had granted to the various shipping […]
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