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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4. April 2023  |   State Aid Uncovered by Phedon Nicolaides

Compensation for Damage Caused by COVID-19 Combined with Rescue Aid
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Introduction Member States are allowed to grant state to compensate undertakings for damage they suffer as a result of a natural disaster or exceptional occurrence. But, it is not always easy or possible to disentangle the damage caused by such an unforeseen event from losses caused by mismanagement or changes of market conditions. The art and science of calculating the […]
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28. March 2023  |   State Aid Uncovered by Phedon Nicolaides

A More Comprehensive and Generous GBER
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Introduction In a Communication that was published on 9 March 2023, the Commission announced extensive amendments to the GBER.[1] A 100-page annex to the Communication provided the legal text of the draft regulation that would revise Regulation 651/2014.[2] The amendments aim to: Ensure consistency between the GBER and new State aid guidelines. Bring the GBER in line with the EU […]
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30. March 2023  |   Guest State Aid Blog by Lexxion Publisher

A Visionary XXX FIDE Congress Approaching
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We’re happy to announce that Lexxion publisher has become a media partner to the FIDE Congress, one of the most distinguished events on EU law. Of particular interest for the readers of the State Aid blog and the EStAL quarterly is the second topic of the congress, dedicated to the new geopolitical dimension of the EU competition and trade policies. […]
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21. March 2023  |   State Aid Uncovered by Phedon Nicolaides

Charging Infrastructure for Electric Vehicles
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Introduction As part of the EU’s Green Deal and the transition to a greener and most sustainable economy, the European Commission’s guidelines on State aid for climate, environmental protection and energy [CEEAG] also allow public support for the construction of energy infrastructures. In a recent decision, the Commission approved a German State aid scheme [SA.104749] for high-power charging infrastructure for […]
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14. March 2023  |   State Aid Uncovered by Phedon Nicolaides

State Aid for the Resolution of a Polish bank
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Introduction Whenever a bank seeks State aid, it must be considered as “failing or likely to fail”. A failing bank must be liquidated or resolved. Resolution means that the critical functions of the bank are preserved while the rest are wound down. Critical functions are those that impact significantly the real economy such as deposits, loans to SMEs or payments. […]
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7. March 2023  |   State Aid Uncovered by Phedon Nicolaides

Tax Advantages and Competitive Bidding
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Introduction Award of contracts or sale of state assets through competitive bidding procedures or tenders are presumed to result in a market prices and to confer no advantage to the winner in the meaning of Article 107(1) TFEU. However, on 25 January 2023, the General Court ruled, in case T-666/21, Società Navigazione Siciliana v European Commission, that certain tax advantages […]
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28. February 2023  |   State Aid Uncovered by Phedon Nicolaides

Discretion of Public Authorities and Selectivity
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Introduction On 2 February 2023, the Court of justice, in case C649/20 P, Spain and Others v European Commission, clarified the extent to which public authorities can implement general measures without in practice favouring any undertaking. The exercise of administrative discretion can turn a general measure into selective. The Court made a distinction between what may be called “related” or […]
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21. February 2023  |   State Aid Uncovered by Phedon Nicolaides

The Selectivity and Profitability of Agreements between Airports and Airlines
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Introduction Selectivity is a tricky issue. Even a measure that appears not to favour or exclude any undertaking may in practice prove to be selective if its effects favour certain undertakings over others that are in a comparable situation. In order to determine whether they are comparable it necessary to examine the objective of the measure. This is what the […]
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8. February 2023  |   State Aid Uncovered by Phedon Nicolaides

State Aid May Have an Incentive Effect Even After the Start of Work: But Would it Favour Inefficient Operators?
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Introduction Perhaps the most important aspect of the compatibility of State aid with the internal market is the presence of incentive effect. That is, the aid is capable of changing the behaviour of the recipient. If it does not, then public money is wasted because it has no effect on what happens on the market anyway. In principle, in order […]
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30. January 2023  |   State Aid Uncovered by Phedon Nicolaides

Cumulation of State Aid Granted by Different Member States
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Introduction The EU Green Deal and the Climate, Environmental Protection and Energy Aid Guidelines [CEEAG] allow Member States to grant more aid, in diversity and amounts, to incentivise companies to invest in greener technologies and energy. However, when multiple Member States grant aid for the same purpose, there is a risk of overcompensation of undertakings that operate across Member States. […]
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24. May 2022  |   State Aid Uncovered by Phedon Nicolaides

Another Case of Rescue Aid to an Airline
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An undertaking does not have to be nationally “important” in order to qualify for rescue aid. Introduction The pandemic has been hard on airlines. For some of them, however, the pandemic simply exacerbated their already existing problems. On 18 May 2022, in case T‑577/20, Ryanair v European Commission, the General Court had to examine the case of State aid to […]
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10. May 2022  |   State Aid Uncovered by Phedon Nicolaides

Risk Finance
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Risk finance aid in the form of tax relief based on the GBER must be limited to private investors. Introduction Decisions of the European Commission authorising aid for risk finance are very rare. This is the consequence of the success of the Commission to get Member States to use almost exclusively the General Block Exemption Regulation [GBER] for the design […]
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3. May 2022  |   State Aid Uncovered by Phedon Nicolaides

The Standard of Proof in State Aid Complaints and the “Informational Disadvantage” of Complainants
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The Commission must use its investigative powers to seek clarification from Member States in order for it to establish whether a measure constitutes State aid, or is compatible aid, or is existing aid. Introduction Complaints are an important source of information to the Commission. The possibility afforded to undertakings to lodge such complaints with the Commission is intended to dissuade […]
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26. April 2022  |   State Aid Uncovered by Phedon Nicolaides

Member States Must Recover of their Own Initiative Illegally Granted Aid
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Aid granted illegal must be recovered by the granting authority without any need for a prior Commission decision ordering recovery. The amount of recovered aid may be limited to that which is in excess of what is allowed by the GBER. Introduction It is a well-established principle in the case law that a “prudent market operator” is responsible to check […]
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19. April 2022  |   State Aid Uncovered by Phedon Nicolaides

Injection of Capital in a Postal Operator
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The resources of a public undertaking necessarily count as “state resources”, regardless of the degree of autonomy of the public undertaking. However, not every decision of a public undertaking can necessarily be “imputed” to the state. A prudent investor may take into account authorised State aid. A prudent investor may tolerate short-term losses if it can realise sufficient profits in […]
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12. April 2022  |   State Aid Uncovered by Phedon Nicolaides

A First Commission Decision on Natural Gas Storage
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Compensation that guarantees a normal or fair rate of return eliminates risk that is inherent in market transactions and therefore confers an advantage in the meaning of Article 107(1) TFEU. Introduction On 23 March 2022, the European Commission announced plans to mitigate the spike in energy prices caused by the war in Ukraine. Chief among those plans were proposals for […]
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5. April 2022  |   State Aid Uncovered by Phedon Nicolaides

Intra-State Transfers and the Discretion of Public Authorities
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Resources transferred from one public authority to another for the purpose of being used to subsidise undertakings do not fall within the scope of Article 107(1) TFEU if the recipient authority has discretion in their disbursement. Introduction A public authority that carries out economic activities becomes an undertaking that is subject to the prohibition of Article 107(1) TFEU. When the […]
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25. March 2022  |   State Aid Uncovered by Phedon Nicolaides

A New Temporary Crisis Framework
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Introduction A new Temporary Framework which is called “Temporary Crisis Framework” [TCF] to distinguish it from the currently applicable Temporary Framework on covid-19 related State aid was adopted on 23 March 2022, almost two years to the date of the publication of the rules on covid-19 related State aid.[1] The purpose of the TCF is to enable Member States to […]
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22. March 2022  |   State Aid Uncovered by Phedon Nicolaides

I. Vouchers for SMEs II. Funding of Aid with Revenue from Levies Imposed on the Aid Beneficiaries
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State aid rules apply both to direct and indirect beneficiaries of aid. Introduction This week’s article reviews a Commission decision and a judgment of the Court of Justice. The Commission decision concerns Italian vouchers for SMEs to pay for the use of fast broadband services. The judgment deals with a German measure supporting milk quality tests. In both cases an […]
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15. March 2022  |   State Aid Uncovered by Phedon Nicolaides

Another Altmark Compliant Case!
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Any non-SGEI obligation attached to a public service contract may not raise the cost of the service above the level of the “least cost to the community”. Introduction It is very rare for measures of compensation for public service obligations to be found by the European Commission to be compliant with the Altmark conditions. Nonetheless, in the past two years […]
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