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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5. July 2022  |   State Aid Uncovered by Phedon Nicolaides

Why Grant a Loan to an Undertaking in Difficulty?
State Aid Blogs - State Aid Uncovered SM posts 14
When a market operator invests in an undertaking in difficulty it also considers the possibility of restructuring, sale or closure. Introduction The answer to the question posed in the title of this article is “because the loan enables the undertaking to become viable again and repay the loan with interest”. It is now well established in the case law that […]
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30. June 2022  |   Guest State Aid Blog by Lexxion Publisher

Further Views on Editorial by Andreas Bartosch (EStAL 1/2022, 1)
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Reading the Editorial by Andreas Bartosch (EStAL 1/2022, 1), I feel tempted – not to worship Satan or the GBER, but to add some more colours to the picture drawn up by the esteemed colleague. It is true that the Block Exemption Regulations were intended to save the Commission Services from „lästigem Alltagsgerümpel“ (“boring routine rubbish”, as Andreas Bartosch dubbed […]
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28. June 2022  |   State Aid Uncovered by Phedon Nicolaides

Individual Aid to Counter the Effects of Serious Economic Disturbance Is Legally Possible, but Is it Appropriate?
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Individual aid need not be capable itself to remedy serious economic disturbance in the economy of a Member State. It is sufficient that it contributes to that effect. Introduction On 22 June 2022, in case T‑657/20, Ryanair v European Commission, the General Court confirmed once more that Member States have a right to grant State aid to the undertakings of […]
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21. June 2022  |   State Aid Uncovered by Phedon Nicolaides

The Date on which State Aid is Deemed to be Granted Is not necessarily the Date on which the Actual Benefit Materialises
State Aid Blogs - State Aid Uncovered SM posts 12
State aid is deemed to be granted even if the benefit cannot be quantified in advance and even if state resources are transferred at a future point in time. Introduction The precise date on which State aid is granted can be important such as, for example, when calculating the present value of aid granted in tranches at different points in […]
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14. June 2022  |   State Aid Uncovered by Phedon Nicolaides

Territoriality and the Tax Treatment of Intra-group Transactions
State Aid Blogs - State Aid Uncovered SM posts 11
A special tax rule can constitute the reference or normal system of taxation if it is “severable” from other tax rules and has its own legal logic. Introduction The application of State aid rules to the tax treatment of transactions between companies that belong to the same multinational group is contentious. During the past three years or so, the Commission […]
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7. June 2022  |   State Aid Uncovered by Phedon Nicolaides

A Rare Commission Decision on SGEI Interpreting Decision 2012/21
State Aid Blogs - State Aid Uncovered SM posts 10
A non-profit provider of free services which are in competition with similar services on the market is an undertaking. Introduction The decentralisation of State aid policy of the past decade has made it easier for the Member States to achieve their public policy objectives. By using blog exemption regulations and decisions, they can grant State aid faster, without having to […]
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31. May 2022  |   State Aid Uncovered by Phedon Nicolaides

State Aid and Anti-Competitive Practices
State Aid Blogs - State Aid Uncovered SM posts 9
State aid to undertakings that engage in anti-competitive practices is incompatible with the internal market. Introduction For State aid to be compatible with the internal market, it may not infringe any other provision of the Treaty or secondary legislation. Occasionally, the Commission finds State aid measures to be incompatible with the internal market because they contain clauses that exclude foreign […]
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27. May 2022  |   Guest State Aid Blog by Lexxion Publisher

How to approach the risk of carbon lock-in effects in state aid analysis?
State Aid Blogs - State Aid Uncovered SM posts 8
A recent FSR Debate[1] held on 4 May examined the key question of how policymakers and regulators can avoid carbon lock-in jeopardising the attainment of the European Union’s ambitious energy and climate targets. Carbon lock-in refers to situations where emissions-intensive energy assets continue to be used even when low-carbon and socially more beneficial assets are available.  This is a controversial […]
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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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17. May 2022  |   by Phedon Nicolaides

Rescue Aid
State Aid Blogs - State Aid Uncovered SM posts 1
Member State must demonstrate that rescue or restructuring aid aims to prevent social hardship or address market failure. The Temporary Framework is coming to an end The European Commission announced on 12 May 2022 that the Temporary Framework will be abolished on 30 June 2022, with the exception of the two types of support that were inserted in the Temporary […]
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24. August 2021  |   State Aid Uncovered by Phedon Nicolaides

It is Difficult to Challenge a Commission Decision Opening the Formal Investigation Procedure
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The assessment of the Commission in an “opening decision” is only provisional. The Commission is not required to prioritise its investigations or to extend them to anyone who may be in a similar situation. The right of non-discrimination is not violated when the Commission chooses to investigate some instead of all possible cases of State aid. An individual measure that […]
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17. August 2021  |   State Aid Uncovered by Phedon Nicolaides

The Problem of Multiple Awards of Aid to the Undertaking and to the Same Group
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Multiple awards of aid to the same undertaking are allowed as long as they cover different costs. Multiple awards of aid to the same group are allowed as long as aid does not leak from one undertaking in the group to another. Introduction In the first half of 2021, the General Court ruled in ten cases of appeal lodged by […]
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10. August 2021  |   State Aid Uncovered by Phedon Nicolaides

When Do Legal Exemptions Constitute State Aid?
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Exemption from a fine does not constitute State aid when it is based on transparent and pre-determined criteria. Infringement of EU law determines the compatibility of State aid, not the existence of State aid. Introduction An exemption from legal requirements that confers a selective advantage does not necessarily amount to State aid. In most cases, when beneficiaries are found not […]
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3. August 2021  |   State Aid Uncovered by Phedon Nicolaides

Methods for Determining Property Value
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Member States may use different methods for determining the value of property as long as they produce similar results. Introduction The base for property taxation is normally the value of the property, not size or location. The difficulty in determining the value of property is that land or buildings have no intrinsic value. It all depends on the purpose for […]
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27. July 2021  |   State Aid Uncovered by Phedon Nicolaides

A Rare Commission Decision on an SGEI Measure that Could Have Been Exempted from Notification
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A public service obligation must be imposed by an act of entrustment that describes in detail the terms of the obligation, identifies the undertaking that offers the service and lays down procedures for preventing over-compensation. Introduction The purpose of Commission Decision 2012/21 on services of general economic interest [SGEI] is, like the GBER, to exempt certain aid measures from prior […]
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20. July 2021  |   State Aid Uncovered by Phedon Nicolaides

The Italian Health System Is not Economic in Nature
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Certain elements of competition that raise efficiency do not undermine the social solidarity foundations of a health care system. Introduction A question that has been addressed by the Court of Justice but not in sufficient detail is whether the providers of non-economic health services can compete with each other. The answer is conditionally affirmative. Competition that does not undermine the […]
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13. July 2021  |   State Aid Uncovered by Phedon Nicolaides

Existing Aid, New Aid and Retroactive Application of a Block Exemption Regulation
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Changes to approved aid measures result in new aid. Only purely formal or administrative changes do not turn existing aid into new. Prolongation of an existing aid measure is not purely formal or administrative. Introduction Any change to an approved aid measure that affects its compatibility with the internal market turns it into a new aid that has to be […]
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6. July 2021  |   State Aid Uncovered by Phedon Nicolaides

Disentangling the Impact of Covid-19 from other Business Problems
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State aid may only compensate for the direct damage caused by covid-19. Introduction Aid that compensates for damage caused by natural disasters or exceptional occurrences is declared by Article 107(2)(b) TFEU to be compatible with the internal market. That is why Article 1(4)(c) of the GBER does not exclude, as is normally the practice, undertakings in difficulty from schemes that […]
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29. June 2021  |   State Aid Uncovered by Phedon Nicolaides

Amazon and the Difficulty of Finding a Comparable Tax Payer
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To apply the Arm’s Length Principle to transactions between two related companies, the Commission must identify the less complex company of the two and compare it to a similar independent company. Methodological errors in the application of the Arm’s Length Principle by national authorities does not necessarily prove the existence of advantage. Introduction On 12 May 2021 the Commission suffered […]
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22. June 2021  |   State Aid Uncovered by Phedon Nicolaides

Is State Aid for Locally Established Undertakings Compatible with the Internal Market?
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Limitation of State aid to companies which have a durable link with the local economy can be compatible with the internal market. Introduction By prohibiting barriers to free movement and establishment in the internal market, the EU seeks to make the choice of location of a company largely irrelevant. All companies should be treated the same regardless of where they […]
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