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. March 2019  |   State Aid Uncovered by Phedon Nicolaides

How Much May a Non-Economic Entity Charge without Becoming an Undertaking?
State Aid Blogs - StateaidHub blogpost9 2019 lexxion education stateaid financing commission 2
The price should not cover more than 50% of the costs. Introduction An entity that does not make profit can still be an undertaking. However, an entity that charges a fee for its services is not necessarily an undertaking. The EU Court of Justice has never defined how low such a fee must be in order for that entity to […]
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27. February 2019  |   State Aid Uncovered by Phedon Nicolaides

EU Rules do not Impose a Time Limit on the Power of National Courts to Deal with Non-notified Aid
State Aid Blogs - StateAidHub blogpost8 Maritim Ferry Port StateAid Lexxion
State aid may affect trade even when the market concerned is not liberalised. This can happen when the aid recipient also has operations outside that market, which it can cross-subsidise. Claims for damages caused by illegal aid must be accorded the same treatment under national law as any other claim resulting from faulty decisions of the state.   Introduction A […]
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19. February 2019  |   State Aid Uncovered by Phedon Nicolaides

Support for Non-Performing Loans in Cyprus
State Aid Blogs - StateAidHub blogpost47 Finance lexxion GBER SMEs
Public assistance to households to pay for their mortgages is not State aid. Public assistance to enterprises to pay for their loans may be qualified as de minimis aid. Public assistance to households and de minimis aid to enterprises to pay for their loans are indirect aid to banks, which, however, falls outside the directive on bank recovery and resolution […]
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14. February 2019  |   State Aid Uncovered by Phedon Nicolaides

What Does a Private Investor Take into Account before Investing?
State Aid Blogs - StateAidHub blogpost6 2019 Lexxion investment Stateaid commission EU telecom
A private investor may invest in a troubled company that is restructuring is order to increase its future profitability.   Introduction   The answer to the question posed above is short and simple: everything relevant. A private investor does not ignore anything that can affect the profitability of the prospective investment.This implies that the other side of the coin is […]
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12. February 2019  |   State Aid Uncovered by Phedon Nicolaides

Pari Passu Is not Static
State Aid Blogs - StateAidHub blogpost4 2019 lexxion pari passu chemistry Investment
When comparing the behaviour of public and private creditors, it is necessary to ensure that their situations and interests do not diverge over time.   Introduction   When an undertaking owes money to a public authority the latter must use all available legal means to recover the money, including the liquidation of the undertaking and the sale of its assets. […]
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29. January 2019  |   State Aid Uncovered by Phedon Nicolaides

Services of General Economic Interest: Proper Definition and Avoidance of Overcompensation
State Aid Blogs - StateAidHub Blogpost4 2019 Lexxion Stateaid SGEI Social Housing
Member States need to demonstrate that public service obligations imposed on undertakings are necessary and proportional to the need for public service. A change in the funding of public services does not constitute new aid if it does not alter its objectives, the beneficiaries or the amount of aid by more than 20%.   Introduction It is a well-established principle […]
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22. January 2019  |   State Aid Uncovered by Phedon Nicolaides

The Private Investor Principle in Air Transport – Part II
State Aid Blogs - StateAidHub Blogpost3 2019 lexxion Commission Airport Investment StateAid
Public funds managed by private airport operators can be classified as state resources. Prices charged by airport operators can be used as a benchmark for market prices only if their activities and size are comparable and their costs are not subsidised by State aid. Before a private investor enters into any commercial arrangement, it takes into account all relevant information, […]
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16. January 2019  |   State Aid Uncovered by Phedon Nicolaides

The Private Investor Principle in Air Transport – Part I
State Aid Blogs - StateAidHub blogpost2 2019 lexxion stateaid airports
Public funds managed by private airport operators can be classified as state resources. Prices charged by airport operators can be used as a benchmark for market prices only if their activities and size are comparable and their costs are not subsidised by State aid. Before a private investor enters into any commercial arrangement, it takes into account all relevant information, […]
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8. January 2019  |   State Aid Uncovered by Phedon Nicolaides

Justification of a Tax Exemption
State Aid Blogs - StateAidHub blogpost23
Prevention of excessive taxation may justify tax exemption. Prevention of abuse may justify limits to the tax exemption.   Introduction   A tax exemption may not constitute state aid if it is justified by reasons which are linked to the nature or general scheme of the tax system. This is what the Court of Justice said on 19 December 2018, […]
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21. December 2018  |   State Aid Uncovered by Phedon Nicolaides

Infrastructure Projects, State Guarantees and Distortion of Competition
State Aid Blogs - SAH blogpost51 52 stateaid infrastructure guarantees
State guarantees must be limited in duration and amount and the conditions for their mobilization must be defined in advance. Public funding to an operator in a closed sector does not affect trade and, therefore, does not constitute State aid.   Introduction Large infrastructure projects are complex, encounter many unforeseen problems and often fall behind schedule for years. Consider, for […]
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17. July 2018  |   State Aid Uncovered by Phedon Nicolaides

Danish Water Tax Exemption
State Aid Blogs - SAH Blogpost28 Water Tax Denmark
A selective tax reduction does not constitute State aid if it does not confer an advantage that is proportionately larger than the magnitude of the tax reduction. A complete exemption of insignificant amounts of the taxable volume can be justified on the grounds of reducing administrative burden.     Introduction   Member States enjoy wide discretion to levy taxes on […]
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10. July 2018  |   State Aid Uncovered by Phedon Nicolaides

The 2017 Annual Competition Report
State Aid Blogs - Blog27 Annual Report
Introduction   On 18 June 2018, the European Commission published its Annual Report on Competition Policy for 2017.[1] As usually, the Annual Report is accompanied by a Staff Working Paper that has almost four times as many pages as the Annual Report and provides more details on developments in all areas of competition policy, including State aid.The pre-eminent role of the […]
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3. July 2018  |   State Aid Uncovered by Phedon Nicolaides

Revision of the GBER
State Aid Blogs - SAH Blog26 GBERd
Block exemption of new financial instruments.   Introduction   The Commission has recently published a proposal for amendment of Council Regulation 2015/1588[1] which authorises the Commission to adopt block exemption regulations. The purpose of the Commission’s proposal is to expand Article 1 of Regulation 2015/1588. This Article lists the categories of aid that may be declared compatible with the internal market.The […]
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25. June 2018  |   State Aid Uncovered by Phedon Nicolaides

Remedying the Damage of a Natural Disaster through Incentives for New Investments
State Aid Blogs - m 3 1
Damage from natural disasters can be remedied in the short-term through direct compensation or in the longer-term through investment subsidies to support new productive capacity.   Introduction   This article reviews a rather straightforward case which, however, is also quite unusual. It concerns a measure to remedy the effect of recent earthquakes in Italy. What makes it unusual is that […]
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19. June 2018  |   State Aid Uncovered by Phedon Nicolaides

Sector-Specific Tax Exemptions
State Aid Blogs - SAH Blogpost 24 Seaports
A measure that covers a whole sector can be selective. Distortions caused by the policies of other Member States cannot justify the granting of State aid. The purpose of State aid is not to ensure equal conditions of competition across Member States.   Introduction On 31 May 2018, the General Court ruled in case T-160/16, Groningen Seaports v European Commission.[1] Groningen […]
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12. June 2018  |   State Aid Uncovered by Phedon Nicolaides

State Aid for the Deployment of Broadband Networks
State Aid Blogs - SAZ Blogpost 23 Broadband
Most State aid for the development of broadband networks is approved by the Commission. But the aid must be limited only to areas where market-based investments are unlikely to be made without aid.   Introduction   This article reviews a recent Commission decision authorising State aid for broadband development in the Netherlands which is one of the most networked countries […]
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5. June 2018  |   State Aid Uncovered by Phedon Nicolaides

The Extent of the Discretion of Member States to Define Services of General Economic Interest (SGEI)
State Aid Blogs - SAH Blogpost 22 SGEI
A service is classified as an SGEI not only when it is important for citizens but also when the market does not adequately supply it and one or more undertakings are compelled to provide it to specified consumers, in specified areas and on specified terms.   Introduction   The Treaty on the Functioning of the EU and the case law […]
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29. May 2018  |   State Aid Uncovered by Phedon Nicolaides

Exemptions from Product-Specific Taxes
State Aid Blogs - SAH Blogpost 21 Product Tax
Tax exemptions do not constitute State aid when they aim to induce change in the behaviour of consumers, when they distinguish between harmful products and non-harmful products and for reasons of administrative simplicity.   Introduction   In the past two weeks, an article was published in two parts criticising the judgments of the Court of Justice in three cases of […]
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22. May 2018  |   State Aid Uncovered by Phedon Nicolaides

Exemption from Taxes that Protect the Environment May not be Selective – Part II
State Aid Blogs - victor xok gFjGZ2qRZOo unsplash
Member States have discretion to impose taxes that penalise environmentally harmful activities. Exemption of undertakings whose activities do not harm the environment does not constitute State aid whenever the exempted undertakings are not in a comparable situation.   Application of Article 107(1) to the Asturias tax   In this case, exempted establishments were those with sales area less than 4000m2 or […]
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15. May 2018  |   State Aid Uncovered by Phedon Nicolaides

Exemption from Taxes that Protect the Environment May not be Selective – Part I
State Aid Blogs - 14.05.18 Part1 Blog19 Spain Regional Tax
Member States have discretion to impose taxes that penalise environmentally harmful activities. Exemption of undertakings whose activities do not harm the environment does not constitute State aid whenever the exempted undertakings are not in a comparable situation.   Application of Article 107(1) to the Asturias tax   In this case, exempted establishments were those with sales area less than 4000m2 or […]
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