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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23. March 2021  |   State Aid Uncovered by Phedon Nicolaides

Exclusive Rights and State Aid
State Aid Blogs - StateAidHub blogpost12 Poste Italiane
Exclusive rights may constitute State aid if they mandate payments with resources over which the state can exercise control. Compensation for the cost of public service obligations may be granted only if the obligations are clear and define a service that is different from market services. Introduction Article 106(1) TFEU requires Member States not to distort competition when they grant […]
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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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7. April 2020  |   State Aid Uncovered by Phedon Nicolaides

EU Decisions Override National Decisions on Compensation for Public Service Obligations
State Aid Blogs - StateAidHub blogpost14 Public Service Obligations 1
The principle of res judicata cannot be used to avoid recovery of incompatible State aid.   An update on State aid measures to counter the impact of COVID-19 As of 3 April 2020, the Commission has approved 29 measures submitted by 16 Member States. Article 107(3)(b) is the legal basis for 26 of those measures, while Article 107(2)(b) is the […]
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31. March 2020  |   State Aid Uncovered by Phedon Nicolaides

How to Make Good the Damage Caused by a Natural Disaster
State Aid Blogs - sergio torres nUw2nIGeGYY unsplash
Compensation for costs incurred as a result of a natural disaster is State aid. The compensation must be for damage directly caused by the natural disaster. Introduction State aid to make good the damage caused by an “exceptional occurrence” such as the corona virus covid-19 is compatible with the internal market. The legal basis for exemption is Article 107(2)(b). Of […]
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20. March 2020  |   State Aid Uncovered by Phedon Nicolaides

A New Temporary State aid Framework to Fight the Effects of the Corona Virus
corona virus poster
Member States will be allowed to provide grants, guarantees and loans to companies to alleviate the effects of the corona virus. Introduction At the end of 2009, the European Commission adopted a Temporary Framework of State aid rules to enable Member States to support companies that were harmed by the outbreak of the financial crisis in 2008. Now, the corona […]
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17. March 2020  |   State Aid Uncovered by Phedon Nicolaides

Has an Economic Myth Become a Legal Fact? The Case of Turnover Taxes
State Aid Blogs - Turnover
Progressive turnover taxes are not contrary to the freedom of establishment or the right of equal treatment. Introduction Recent cases involving “turnover” taxes have sparked a debate in the literature and on the conference circuit not only because they raise novel issues but also because of their implications for other taxes which are being mooted by European governments. As Advocate-General […]
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11. March 2020  |   State Aid Uncovered by Phedon Nicolaides

Financial Transactions between the State and Banks with No State aid
State Aid Blogs - StateAidHub blogpost10 state guarantees
Capital injections, state guarantees and loans granted to banks can be free of State aid if they are priced at market rates which reflect the risk borne by the state. Introduction If banks can obtain capital, loans and guarantees from the state at market rates why don’t they go directly to the market? No one has yet given a satisfactory […]
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3. March 2020  |   State Aid Uncovered by Phedon Nicolaides

Public Funding of Infrastructure without State Aid
State Aide_Infrastructure
The existence of State aid must be checked at the level of both the direct and indirect beneficiaries who are the owners and users of infrastructure, respectively. If payments to private land owners are to be free of State aid, they must be calculated on the basis of an objective formula that takes into account the size and value of […]
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25. February 2020  |   State Aid Uncovered by Phedon Nicolaides

Environmental Remediation and State Liability
State Aid Blogs - StateAidHub blogpost8 environmental remediation
Liability assumed by the state for the actions of an undertaking constitutes a selective advantage that may result in potential transfer of state resources in the future. Introduction On 16 January 2020 the General Court delivered its judgment in case T‑257/18, Iberpotash v European Commission.[1] Iberpotash, a Spanish company, appealed against Commission decision 2018/118. Iberpotash owns and operates potash mines […]
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21. February 2020  |   State Aid Uncovered by Phedon Nicolaides

From Waste to Energy
State Aid Blogs - StateAidHub blogpost7 waste to energy
State aid to incentivise the use of waste to produce energy must be individually notified. Introduction Waste management is an increasingly important aspect of policies aiming to prevent environmental degradation and slow down climate change. As the market for recycling expands and waste management becomes more profitable, there is also a higher risk of harm to competition by State aid. […]
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12. February 2020  |   State Aid Uncovered by Phedon Nicolaides

An Important (and so far, Unique) Project of Common European Interest
State Aid Blogs - StateAidHub blogpost6 microplastics IPCEI
State aid for important R&D projects of common European interest can cover different costs than the RDI Framework and at different rates of intensity. Introduction Several Member States have demanded a more active industrial policy to counteract perceived unfair foreign competition. The Commission’s response has partly been that current rules do allow cross-border cooperation for the development of innovative products. […]
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4. February 2020  |   State Aid Uncovered by Phedon Nicolaides

How to Compensate for the Extra Cost of Public Service Obligations: Step-by-Step Guidance on a Complex Calculation
State Aid Blogs - StateAidHub blogpost5 SGEI
The “net avoided cost methodology” takes into account only incremental costs. Introduction The two most difficult issues in the design of State aid measures to support services of general economic interest [SGEI] are the proper definition of the public service obligation [PSO] and the identification of the “counterfactual” on the basis of which the public service compensation [PSC] is calculated. […]
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