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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24. November 2020  |   State Aid Uncovered by Phedon Nicolaides

De Minimis Aid
wood
If different awards of de minimis aid bring the total amount over the ceiling of EUR 200,000, Member States may withdraw aid already granted or reduce the amount of aid that is scheduled to be granted or simply refuse to grant aid so as to ensure that the total remains below the ceiling for any three-fiscal year period. Introduction A […]
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10. November 2020  |   State Aid Uncovered by Phedon Nicolaides

What is the Value of Informal Commission Communications?
State Aid Blogs - freighter 315201 1280
An official’s statement can be imputed to his authority if it can be reasonably assumed that the official speaks on behalf of the authority. Introduction It is often asked by national officials how much credence they should give to assurances by Commission officials in the absence of a formal Commission decision and what is the legal value of such assurances. […]
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3. November 2020  |   State Aid Uncovered by Phedon Nicolaides

The Concept of SME, Indirect Control by Public Bodies and New Problems for Public Universities and Research Organisations
State Aid Blogs - columns 5135499 1920
I am grateful to Peter Staviczky for comments on an earlier draft. A company that is owned by more than 25% by public bodies is not considered to be an SME, regardless of whether those public bodies actually exercise direct or indirect control. A public university can be a public body. Temporary Framework Update: Number of approved and published covid-19 […]
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3. November 2020  |   State Aid Uncovered by Phedon Nicolaides

Evaluation of EU State Aid Rules: Need for Greater Transparency
State Aid Blogs - office 4249408 1920
On Friday, 30 November 2020, the European Commission published a Staff Working Document [SWD(2020) 257 final] presenting and assessing the results of the evaluation of the main State aid rules of the EU. The SWD explains the aims of the State Aid Modernisation [SAM] that was launched in 2012 and summarises the findings of the Fitness Check of the GBER, […]
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27. October 2020  |   State Aid Uncovered by Phedon Nicolaides

The Common European Interest and the Environmental Impact of State Aid: The Case of Nuclear Power
State Aid Blogs - nuclear power plant 4535761 1920
I am grateful to Peter Staviczky for comments on an earlier version. The possible negative impact of State aid on the environmental is taken into account when the aid measure violates directly the relevant EU law. The Commission protects the interests of other Member States by ensuring that the negative effects of State aid are kept to the minimum possible. […]
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20. October 2020  |   State Aid Uncovered by Phedon Nicolaides

Employees’ Social Security Contributions and Compensation for Damage
State Aid Blogs - fishing boats 1785400 1920
Fiscal benefits to employees do not constitute State aid as long as they do not confer a direct or indirect advantage to their employers. Update on Temporary Framework: Number of approved and published Covid-19 measures, as of 16 October 2020: 302* Legal basis: Article 107(2)(b): 32; Article 107(3)(b): 255; Article 107(3)(c): 23 Average number of measures per Member State: 11 […]
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13. October 2020  |   State Aid Uncovered by Phedon Nicolaides

Market Economy Operator Principle: The Case of FIH
State Aid Blogs - danish currency 1139103 1920
Negotiated transactions are not necessarily market conform. Update on Temporary Framework: Number of approved and published covid-19 measures, as of 9 October 2020: 295* Legal basis: Article 107(2)(b): 32; Article 107(3)(b): 248; Article 107(3)(c): 23 – Average number of measures per Member State: 10.5 – Median number of measures per Member State: 12 – Mode number of measures per Member […]
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6. October 2020  |   State Aid Uncovered by Phedon Nicolaides

Member States Beware: Compliance with the GBER and the SME Criteria has just Become more Difficult
State Aid Blogs - doors 1767564 1920
I am grateful to Péter Staviczky for comments on an earlier draft of this article. I am solely responsible for its contents. The European Commission retains its sole right to assess the compatibility of aid granted on the basis of the GBER. Criteria defined in national law need not be taken into account by the Commission. The SME status has […]
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30. September 2020  |   State Aid Uncovered by Phedon Nicolaides

Market Economy Operator Test
State Aid Blogs - riga 2935034 1920
A rational airport operator considers only incremental revenue and costs and ignores any cost not caused by an agreement with an airline. State aid developments: New Guidelines in State aid in EU ETS The Commission published on Friday, 25 September, in Official Journal C 317, p.5, the new Guidelines on State aid measures in the context of the system for […]
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22. September 2020  |   State Aid Uncovered by Phedon Nicolaides

A Real Estate Deal that Does not Affect Intra-EU Trade
State Aid Blogs - hall 1489766 1920
Operators selected through competitive, transparent, non-discriminatory and unconditional procedures receive no State aid. When only a single bid is submitted, the market conformity of the outcome must be verified with comparative analysis. Activities are purely local when they are not likely to attract customers or operators from abroad. Update on Temporary Framework: Number of approved and published covid-19 measures, as […]
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3. December 2019  |   State Aid Uncovered by Phedon Nicolaides

Separability of Economic from Non-economic Activities
State Aid Blogs - StateAidHub blogpost50 2019 lexxion economy printing non economic Stateaid SGEI
Activities which are inseparable from the exercise of official powers are non-economic. Introduction   Pure research whose results are widely disseminated is undoubtedly a non-economic activity. Research reports are often published on the internet. But the design and management of a research organisation’s website can be an economic activity. Plenty of private companies provide these services for a fee. Does […]
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26. November 2019  |   State Aid Uncovered by Phedon Nicolaides

How to Assess a Shareholder Loan
State Aid Blogs - StateAidHub blogpost49 shareholder loan MEOP
A shareholder loan cannot be simply compared to a bank loan because the shareholder also benefits from improvements in the future profitability of the borrower. Introduction When a public authority grants a loan to a company, the methodology in the 2008 Commission communication on reference and discount rates can be used to determine whether the loan contains State aid. However, […]
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19. November 2019  |   State Aid Uncovered by Phedon Nicolaides

Compensation to a Toll Road Operator
State Aid Blogs - StateAidHub blogpost48 toll road motorways Poland obligations StateAid
Contractual obligation to provide compensation that does not exceed the loss of income is not State aid. Introduction When is a company entitled to compensation by the state? The easy answer is “when the state is liable for damage”. However, it may be possible for a company to claim compensation from the state when the state has assumed contractual obligations. […]
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14. November 2019  |   State Aid Uncovered by Phedon Nicolaides

Risk Finance
State Aid Blogs - StateAidHub blogpost47 Finance lexxion GBER SMEs
Risk finance measures for the support for large enterprises or SMEs which operate for longer than seven years fall outside the GBER and must be notified individually to the Commission. Introduction Since the State aid modernisation and the new rules that were introduced in 2014, only a handful of risk finance measures [7-8?] have been notified to the European Commission […]
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5. November 2019  |   State Aid Uncovered by Phedon Nicolaides

Economic Continuity in Recovery of Incompatible State aid
Lab test
The new owner of a company that received incompatible State aid may be liable to pay it back. Introduction   Companies rarely escape from the obligation to repay incompatible State aid. Over the past decade or so, very few companies have successfully argued that they legitimately expected that the aid they received was compatible with the internal market. When a […]
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30. October 2019  |   State Aid Uncovered by Phedon Nicolaides

The Operator of an Economic Infrastructure is an Undertaking
State Aid Blogs - m 1
The assignment of public service tasks to an infrastructure operator is not sufficient to prevent the application of State aid rules. Introduction The characterisation of an entity as an undertaking is activity based, not status based. If it carries out activities for which there is a market, it becomes an undertaking, regardless of providing services which are in the general […]
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22. October 2019  |   State Aid Uncovered by Phedon Nicolaides

Production of Green Electricity
State Aid Blogs - StateAidHub blogpost44 greenelectricity
Member States may reduce the amount of State aid they grant and companies may not claim they have a right to State aid. Introduction Close to 60% of all aid granted to industry and services in the EU goes to support environmental protection, energy efficiency and the generation of electricity from renewable sources of energy. However, as technology improves, the […]
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16. October 2019  |   State Aid Uncovered by Phedon Nicolaides

Attempting to Minimise Past State aid Is of No Interest to a Private Investor
State Aid Blogs - StateAidHub blogpost43 privateinvestor
A public authority acting as a private investor ignores past State aid. Introduction It is now a settled principle that when a public authority intends or pretends to act as a private investor it must not take into account any past aid it has granted to the company in which it wants to invest. On 19 September 2019, the General Court […]
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8. October 2019  |   State Aid Uncovered by Phedon Nicolaides

Public Service Obligations, Duration of Entrustment and Reasonable Profit
State Aid Blogs - StateAidHub blogpost41 LNGterminal
The duration of entrustment should not exceed the economic life of the investment and the rate of return should reflect the commercial risk of that investment. Introduction Is a 55-year entrustment through a direct award compatible with EU rules? And is a profit rate that exceeds the risk-free rate of return reasonable? These are some of the questions that the […]
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1. October 2019  |   State Aid Uncovered by Phedon Nicolaides

Enforcement of State Aid Rules by National Courts
State Aid Blogs - m 2
Private enforcement has increased, but damages for illegal granting of State aid have been successfully claimed in just one case. Introduction   According to the annual competition report that was published in July, Member States use the GBER to implement 96% of their new aid measures.[1] This impressive outcome should be seen in conjunction with the recent rulings of the Court […]
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