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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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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24. September 2019  |   State Aid Uncovered by Phedon Nicolaides

“Invest-NL”: A New Promotional Bank
State Aid Blogs - StateAidHub blogpost39 promotionalbank
A state-owned promotional or development bank can pursue public policy objectives and also invest on terms which are acceptable to private investors. Introduction During the past decade or so several Member States have established “promotional” or “development” banks for the purpose of investing where the market does not. Private investors may be reluctant to commit their money for a variety […]
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17. September 2019  |   State Aid Uncovered by Phedon Nicolaides

Sale of a Bank without State aid
State Aid Blogs - StateAidHub blogpost38 saleofbank
The sale must be open, transparent, non-discriminatory, unconditional and the winning bid must be the offer with the highest price. Introduction The German HSH Nordbank used to be the largest provider of ship finance in the world. It had commercial presence in over 20 major financial centres. Before the outbreak of the financial crisis in 2008, HSH Nordbank had a […]
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10. September 2019  |   State Aid Uncovered by Phedon Nicolaides

Individually Notified Regional Aid
State Aid Blogs -
All individual awards of aid granted to the same project over a three-year period have to be counted together and remain below the maximum allowable aid intensity in relation to the sum of eligible costs. Introduction Hungary operates an aid scheme that offers tax credits to encourage regional investment. The scheme has been implemented on the basis of the GBER […]
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3. September 2019  |   State Aid Uncovered by Phedon Nicolaides

Presumed v Actual Compatibility of State aid with the Internal Market
State Aid Blogs - StateAidHub blogpost36 GBER BMW
State aid granted on the basis of the GBER may not be considered as authorised by the Commission. The task of Member States is to ensure that all of the requirements of the GBER are fulfilled. In particular, Member States must confirm the incentive effect of aid to large enterprises. Introduction[1]   In March 2019, the Court of Justice delivered […]
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28. August 2019  |   State Aid Uncovered by Phedon Nicolaides

A Curious Case of Port Concessions
State Aid Blogs - StateAidHub blogpost35 port concessions
The obligations of a concessionaire may be made less onerous in order to enable it to remain in operation. Any adjustment of the obligations takes into account the possible legal defences of the concessionaire. Introduction The Market Economy Investor Principle [MEIP] is a powerful concept. Its many variations attest to its versatility [e.g. market economy investor, operator, vendor, creditor]. It […]
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20. August 2019  |   State Aid Uncovered by Phedon Nicolaides

Repayable Advances for Support of Research Projects
State Aid Blogs - StateAidHub blogpost34 RDI GBER
The amount of State aid in a repayable advance to support research projects is the difference between the return a private investor would demand and the actual return for the funding authority. Introduction According to the staff working paper accompanying the 2018 annual competition report that was published on 15 July 2019, 95% of all State aid measures supporting R&D […]
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25. September 2018  |   State Aid Uncovered by Phedon Nicolaides

The Compatibility of State Aid with the Internal Market: Lessons from “Hinkley Point C” – Part II
State Aid Blogs - SAH blogpost37 Hinkley Point C UK 2017
The objective of common interest that should be supported by state aid does not have to be an objective agreed by all Member States.   Existence of market failure and need for aid Austria and Luxembourg claimed that the intervention by the UK was not necessary and that there was no evidence that the liberalised market for the generation and […]
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18. September 2018  |   State Aid Uncovered by Phedon Nicolaides

The Compatibility of State Aid with the Internal Market: Lessons from “Hinkley Point C” – Part I
State Aid Blogs - SAH blogpost37 Hinkley Point C UK 2017
The objective of common interest that should be supported by state aid does not have to be an objective agreed by all Member States.   Introduction On 12 July 2018, the General Court ruled in a complex case brought by Austria and Luxembourg against Commission decision 2015/658 which had authorised State aid for Hinkley Point C, a new nuclear power […]
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11. September 2018  |   State Aid Uncovered by Phedon Nicolaides

Selectivity Can Exist at Different Levels: The Case of the Spanish Tax Lease System
transport ship
A tax measure may be selective in relation to both intermediate and final beneficiaries.  An undertaking may enjoy a selective advantage even if it passes all tax benefits to other parties.   Introduction A measure that is not selective at one level may be selective at another level and a measure that is selective at one level can also be […]
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4. September 2018  |   State Aid Uncovered by Phedon Nicolaides

Public Procurement and State Aid
State Aid Blogs - SAH blogpost35 Nuclearpower
State aid does not have to be awarded on the basis of a competitive procedure, unless the relevant rules require it. Secondary legislation may allow Member States to make direct awards without a prior competitive procedure. Public procurement rules do not apply to awards between contracting authorities.   Introduction   Public procurement and State aid rules have the same basic […]
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28. August 2018  |   State Aid Uncovered by Phedon Nicolaides

Public Service Compensation
State Aid Blogs - SAH blogpost34 PublicCompensation SGEI
Compensation for the provision of public services may not exceed the avoidable cost minus any forgone revenue from not having to provide those services. The VAT exemption for postal services is not State aid because it is laid down in the EU VAT directive and therefore cannot be attributed to Member States.   Introduction This article reviews Commission decision on […]
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21. August 2018  |   State Aid Uncovered by Phedon Nicolaides

The European Commission’s Code of Best Practices on State Aid Procedures
State Aid Blogs - SAH blogpost33 SA Code
Closer cooperation between Commission services and Member States.   Introduction   The European Commission, DG Competition, published on 16 July 2018 on its website and then on 19 July 2018 in the Official Journal of the EU a Code of Best Practices for the Conduct of State Aid Control Procedures.[1]The purpose of the Code is to provide guidance to Member […]
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13. August 2018  |   State Aid Uncovered by Phedon Nicolaides

State Aid Control in the UK after its Exit from the European Union
State Aid Blogs - SAH blogpost32 State Aid and Brexit
After its withdrawal from the EU, the UK is likely to maintain a State aid regime that is similar to that of the EU.   Introduction   In seven months’ time, on 29 March 2019, the UK will leave the EU. But its withdrawal from the EU will not bring to an end compliance with EU rules. The UK is […]
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7. August 2018  |   State Aid Uncovered by Phedon Nicolaides

The Compatibility of State Aid Depends on the Rules which are Applicable at the Time the Aid is Granted
State Aid Blogs - SAH Blopost31 SA Italy Bustransfer
Failure to comply with just a single provision of an exemption regulation results in the non-applicability of the whole regulation and makes any implemented aid measure automatically illegal. The compatibility of aid measures adopted in the past but continuing having effects are assessed not on the basis of old rules but on the basis of the rules which are applicable […]
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27. July 2018  |   State Aid Uncovered by Phedon Nicolaides

The Definition of the Reference Tax System is still a Puzzle
State Aid Blogs - SAH Blogpost 27 30 Tax System
A selective measure should be determined on the basis of its effects, not on the basis of the legally defined regulatory techniques.   Introduction A tax measure is selective in the meaning of Article 107(1) TFEU when it basically deviates from the normal tax system. In the case of a tax reduction or a tax exemption the normal system is […]
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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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