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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16. March 2021  |   State Aid Uncovered by Phedon Nicolaides

The Pan-European Guarantee Fund: The First State Aid Instrument at EU Level
State Aid Blogs - StateAidHub blogpost11 Funds
The Fund managed by the EIB constitutes State aid granted collectively by participating Member States. Introduction One of the many responses of the European Union to the economic harm wreaked by the pandemic was the establishment of the Pan-European Guarantee Fund [the Fund] by the European Investment Bank. Member States were invited to contribute to the Fund. This is both […]
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9. March 2021  |   State Aid Uncovered by Phedon Nicolaides

Can the Decision of a Private Entity be Imputed to the State?
State Aid Blogs - StateAidHub blogpost7 Bank Italy
A measure is imputable to the state whenever the state is involved in its adoption or shapes the decision that leads to its adoption. Introduction One of the trickiest aspects of determining whether a financial transaction involves State aid is its attribution or imputation to a decision of the state, especially when the entity providing the funding is private. Private […]
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2. March 2021  |   State Aid Uncovered by Phedon Nicolaides

State Aid May be Limited to Undertakings with Close Links with the National Economy (Part II)
State Aid Blogs - StateAidHub blogpost8 9 Ryanair
State aid may be used to compensate airlines licensed by domestic authorities for losses incurred as a result of national travel restrictions. [In case you have missed part I, you can access it here.] Introduction The European Commission acted swiftly to adopt a fairly accommodating and wide-ranging “Temporary Framework” to regulate State aid for the purposes of counter-acting the impact […]
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23. February 2021  |   State Aid Uncovered by Phedon Nicolaides

State Aid May be Limited to Undertakings with Close Links with the National Economy (Part I)
State Aid Blogs - StateAidHub blogpost8 9 Ryanair
State aid may be used to compensate airlines licensed by domestic authorities for losses incurred as a result of national travel restrictions. Introduction The European Commission acted swiftly to adopt a fairly accommodating and wide-ranging “Temporary Framework” to regulate State aid for the purposes of counter-acting the impact of covid-19. The Temporary Framework was welcomed by both Member States and […]
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16. February 2021  |   State Aid Uncovered by Phedon Nicolaides

Liquidity Assistance to Banks to Counter the Effects of Covid-19
State Aid Blogs - StateAidHub blogpost7 Bank Italy
Any direct public support of financial institutions affected by covid-19 has to comply with both State aid rules and the rules of the banking union. Introduction The Temporary Framework for State aid to combat covid-19 excludes financial institutions. But it does not mean that banks do not benefit indirectly from State aid granted to other sectors of the economy. This […]
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9. February 2021  |   State Aid Uncovered by Phedon Nicolaides

The State Acting as a Regulator
State Aid Blogs - StateAidHub blogpost6 NL gambling
When the state acts as a regulator, it does not have to charge a licence fee that maximises its revenue. Introduction Governments can influence the allocation of resources with at least three instruments: subsidisation, taxation and regulation. All three may contain State aid; if subsidies are selective, if taxes allow for exemptions and if regulation involves charges which are not […]
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2. February 2021  |   State Aid Uncovered by Phedon Nicolaides

Helsinki Busses, Loans, Article 93 and Indemnification
State Aid Blogs - StateAidHub blogpost5 Helsinki bus
Bus transportation provided by public authorities constitutes economic activity. Loans given by a public authority to its transport unit have to be priced at market rates. The market value of public assets sold to third parties has to reflect any state indemnities. Temporary Framework The European Commission announced on 28 January 2021 a fifth amendment to the Temporary Framework. [1] […]
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26. January 2021  |   State Aid Uncovered by Phedon Nicolaides

Training and State Resources
State Aid Blogs - StateAidHub blogpost4 training
The definition of quality indicators and the establishment of certificates of quality do not amount to control by the state over the resources belonging to non-state entities. Introduction Consider the case of a public university which decides to finance the proposal of one of its researchers to launch a research project in collaboration with a private company. For sure the […]
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19. January 2021  |   State Aid Uncovered by Phedon Nicolaides

Funding of Public Hospitals
State Aid Blogs - StateAidHub blogpost3 Hospitals
Public healthcare provided in accordance with the principle of social solidarity is not economic in nature. Introduction There are two sectors where economic and non-economic activities mix and cause potential State aid problems: healthcare and education. Healthcare and education provided by public institutions do not differ much from healthcare and education provided by private institutions. The critical difference is not […]
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12. January 2021  |   State Aid Uncovered by Phedon Nicolaides

A First Evaluation of Covid-19 State Aid
State Aid Blogs - StateAidHub blogpost2 Covid
There is a significant variation across Member States in terms of the number of aid measures as well as the amount of aid. Introduction On 17 December 2020, the European Parliament published a report evaluating the impact of State aid to combat covid-19.[1] The report was requested by the committee responsible for economic policy. The report is probably the first […]
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16. June 2020  |   State Aid Uncovered by Phedon Nicolaides

Direct v Indirect Advantages: The Case of Sardinian Airports
State Aid Blogs - ryanair 2798896 1920
Public funding that flows through intermediaries to third parties also counts as a state resource if the intermediaries carry out instructions by the funding authority. Temporary Framework: Number of approved covid-19 measures, as of 12 June 2020: 154* Legal basis: Article 107(2)(b): 14; Article 107(3)(b): 130; Article 107(3)(c): 14 Three recapitalisation measures have been approved [Finland, Lithuania & Poland]. The […]
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9. June 2020  |   State Aid Uncovered by Phedon Nicolaides

Private Investor and Preferential Regulatory Treatment
pills on money
The existence of an advantage has to be proven, not presumed just because its absence cannot be confirmed. Preferential treatment may distort competition but it is not necessarily State aid if there is no transfer of state resources. Temporary Framework: Number of approved covid-19 measures, as of 5 June 2020: 148* Legal basis: Article 107(2)(b): 13; Article 107(3)(b): 125; Article […]
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2. June 2020  |   State Aid Uncovered by Phedon Nicolaides

i) Investor-State Arbitration ii) Recovery of Incompatible State Aid iii) State Aid Scoreboard 2019
Euromünzen
Member States abolish bilateral investment treaties between themselves. When the Commission orders recovery of incompatible State aid, interest has to be added to the recoverable amount for the whole period of illegality regardless of any national limitation rules. In 2018, Member States granted EUR 121 billion to industry and services, EUR 6.3 billion to agriculture and EUR 50 billion to […]
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26. May 2020  |   State Aid Uncovered by Phedon Nicolaides

State Aid for i) Water Development ii) Travel
State Aid Blogs - StateAidHub blogpost21 water development travel
Aid to individuals in the context of social policy is compatible with the internal market as long as it is granted without discrimination on the origin of products or services. Temporary Framework: Number of approved covid-19 measures, as of 22 May 2020: 129* Legal basis: Article 107(2)(b): 9; Article 107(3)(b): 111; Article 107(3)(c): 12 * Excludes amendments to previously notified […]
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19. May 2020  |   State Aid Uncovered by Phedon Nicolaides

No New Aid to Undertakings that Have not Yet Repaid Incompatible Aid
Money in Hands
There is no rule in EU law obliging Member States to grant State aid. The European Commission may refuse to authorise aid until previous aid that was found to be incompatible with the internal market is paid back. Temporary Framework: Number of approved covid-19 measures, as of 16 May 2020: 125* Legal basis: Article 107(2)(b): 10; Article 107(3)(b): 105; Article […]
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12. May 2020  |   State Aid Uncovered by Phedon Nicolaides

Advantage Must be Proven, Not Assumed
Road sign "Wrong Way"
The European Commission has to consider whether the private investor principle is applicable in cases of state investments. It is for Member States to prove that their investments conform with the private investor principle. Temporary Framework As of 9 May 2020, the European Commission had approved 113 State aid measures to combat covid-19. Their legal basis was: Article 107(2)(b): 10; […]
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5. May 2020  |   State Aid Uncovered by Phedon Nicolaides

Non-recovery of Incompatible State aid Is Costly
corona virus poster
Legal and practical difficulties in the recovery of incompatible State aid do not constitute justifiable “absolute impossibility”. Temporary Framework On 1 May, the total number of State aid measures to combat covid-19 approved by the European Commission reached 102. Their legal basis was: Article 107(2)(b): 9; Article 107(3)(b): 86; Article 107(3)(c): 7   Introduction The 2020 Temporary Framework for State […]
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27. April 2020  |   State Aid Uncovered by Phedon Nicolaides

Identification of Undertakings in Difficulty
corona virus poster
A company is in difficulty if, in practice, its accumulated net losses exceed 50% of its subscribed capital, regardless of whether the subscribed capital is formally written down. The classification of a company as being in difficulty is independent of the sector in which it operates and of whether a private investor would be willing to invest in it. Temporary […]
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20. April 2020  |   State Aid Uncovered by Phedon Nicolaides

How to Price a Guarantee
Football ball on a field
The pricing of a guarantee must take into account not only the financial situation of the borrower but also the value of any collateral. Temporary Framework As of 17 April 2020, the European Commission authorised 61 State aid measures from 23 Member States and the UK to combat covid-19.   Introduction State guarantees on loans make up the largest category […]
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14. April 2020  |   State Aid Uncovered by Phedon Nicolaides

Errors in State aid Procedures Need not Result in Annulment of a Commission Decision
State Aid Blogs - StateAidHub blogpost15 airport 2
Interested parties have a right to know how the compatibility of aid with the internal market is assessed. Temporary Framework developments As of 13 April 2020, the European Commission had authorised 51 measures adopted by 23 Member States. According to the statement of the Eurozone finance ministers of 9 April 2020, Member States had provided liquidity in the form of […]
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