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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9. July 2019  |   State Aid Uncovered by Phedon Nicolaides

1) The European Commission Does not Have to Identify Individual Beneficiaries in its Recovery Decisions 2) Revision of the GBER [InvestEU, Seal of Excellence, ETC]
State Aid Blogs - StateAidHub blogpost27 GBER
This week’s article deals with two issues: possible defence against repayment of incompatible State aid and the forthcoming revision of the GBER. Introduction In 2008, the Commission ordered France to recover incompatible aid that had been granted by means of several public measures to support farmers [see Commission decision 2009/402]. What made that decision interesting was that part of the […]
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2. July 2019  |   State Aid Uncovered by Phedon Nicolaides

Application of the MEOP to Energy Infrastructure
State Aid Blogs - StateAidHub blogpost26 energy infrastructure
A public authority that acts as a private operator may charge what the market can bear. Introduction In January 2019, Germany notified to the Commission, for reasons of legal certainty, investment of the municipality of Hamburg in a district heating network. The Commission, in decision SA.52390, found that the investment in Hamburg District Heating Network conformed with the Market Economy […]
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25. June 2019  |   State Aid Uncovered by Phedon Nicolaides

How to Value Land in Complex Land Swaps
State Aid Blogs - StateAidHub blogpost25 LandSwap RealdMadrid
A private investor assesses all components of a complex transaction and takes into account not just profit, but also the legal implications of the prospective transaction and possible future liability.   Introduction   When a public authority sells land, it should either auction it through a competitive and unconditional process or have it valued beforehand by an independent expert.Sometimes, public […]
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18. June 2019  |   State Aid Uncovered by Phedon Nicolaides

Is it OK to Tax Company Size?*
State Aid Blogs -
Progressive tax rates that are consistent with the objective of the tax system are not necessarily selective. Introduction Member States are free to design their corporate tax systems as long as they do not grant State aid or infringe fundamental internal market freedoms. A question that arises in discussions on what Member States may or may not do when designing […]
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11. June 2019  |   State Aid Uncovered by Phedon Nicolaides

I) Unlimited State Guarantees II) Effect on Trade
State Aid Blogs - StateAidHub blogpost23
A competitor who wants to challenge a Commission decision authorising State aid without a formal investigation must, first, show that it is seriously harmed by the aid. Introduction This week’s article reviews two judgments: one on unlimited state guarantees granted by France [case T-135/17, Scor v European Commission][1] and another on aid that was found not to affect trade between Member […]
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4. June 2019  |   State Aid Uncovered by Phedon Nicolaides

Not Every Compensation Is a Compensation in the Meaning of Altmark
State Aid Blogs - StateAidHub blogpost22 electricity Altmark SGEI
Regulation and licensing do not constitute obligations for the provision of an SGEI. Compensation for changes in public policy is not compensation that complies with the Altmark conditions. Introduction The calculation of the compensation for the net extra costs of public service obligations [PSO] is a difficult task. On 15 May 2019, in case C-706/17, Achema et al v Lithuania […]
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28. May 2019  |   State Aid Uncovered by Phedon Nicolaides

What Happens when Internal Market Rules and State Aid Rules Clash?
State Aid Blogs - StateAidHub blogpost21 Tax Refund
A tax refund may not be granted, if it constitutes non-notified State aid.   Introduction   It is a well-established principle that restrictions on internal market rights or freedoms may not be attached to a State aid measure. Indeed, current State aid rules [e.g. GBER, guidelines] explicitly exclude from their scope any aid measure which is inseparably linked to a […]
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21. May 2019  |   State Aid Uncovered by Phedon Nicolaides

There Is No Threshold below which Economic Activities Can Be Considered to be Non-economic
State Aid Blogs - StateaidHub blogpost20 Lexxion Port Economic Activities
Non-economic activities have to be accounted separately from economic activities. The exercise of public tasks assigned by the state cannot protect an undertaking from State aid rules. State aid distorts competition even when it aims to remedy distortions. Introduction Ports, like other transport infrastructures, may operate under public obligations some of which may be of economic and some of non-economic […]
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16. May 2019  |   State Aid Uncovered by Phedon Nicolaides

Competitors’ Rights
State Aid Blogs - StateaidHub blogpost19 Lexxion Lufthansa Airport StateAid Ryanair Frankfurt Competition EU Commission
A competitor must show that it is substantially affected by State aid approved by the Commission in order to challenge the Commission’s decision. Merely being affected by the aid is not enough. To show that aid has a substantial impact, it is first necessary to define the relevant market. This is different from the “distortion of competition” in the meaning […]
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7. May 2019  |   State Aid Uncovered by Phedon Nicolaides

Land Development: The Case of Jaguar Land Rover Slovakia
State Aid Blogs - StateAidHub blogpost18 Landrover Jaguar Nitra Stateaid Infrastrsucture Transport Lexxion
Public funding of infrastructure which is not constructed for the specific needs of a company is not State aid.   Introduction An article carried by the Financial Times on 1 May 2019 revealed that Jaguar Land Rover [JLR] decided to make again the iconic Land Rover Defender. The production of this legendary off-roader ended about 10 years ago because it […]
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8. May 2018  |   State Aid Uncovered by Phedon Nicolaides

Dealing with Problematic Banks
State Aid Blogs - StateAidHub blogpost14 StateAid Lexxion Money Eu Commission Bank Financial
The sale of a bank through a fair, open, competitive and transparent procedure that maximises the value of the assets and liabilities is free of State aid.   Introduction This week’s article returns to the theme of State aid to banks and examines a case of “precautionary” recapitalisation and a case of sale of a bank, that was linked to […]
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2. May 2018  |   State Aid Uncovered by Phedon Nicolaides

Compensation for Public Service Obligations
State Aid Blogs - 02.05.2018 SA POL UK SGEI
Compensation for public service obligations may be fixed at less than the net extra costs of the provider of the public service to induce it to become more efficient.   Introduction   Every three years the UK determines the compensation it provides to the Post Office Limited (POL) for the extra costs of the public services it provides. Commission decision […]
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24. April 2018  |   State Aid Uncovered by Phedon Nicolaides

Liquidity Support to Banks
State Aid Blogs - 24.04.2018 StateAid Banks MPS
Banks that receive State aid are considered to be failing banks, except when the aid is granted to solvent banks for the purpose of precautionary recapitalisation or temporary liquidity.   Introduction   During the past decade, large amounts of public funds have been committed to shore up failing or illiquid banks. Under current banking rules, the mere fact that a […]
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17. April 2018  |   State Aid Uncovered by Phedon Nicolaides

Complaints about Billboards and Welfare Services
State Aid Blogs - 17.04.2018 State aid Billboard
A regulatory measure may affect competition but it does not constitute State aid. Administrative changes to existing aid measures do not result in new State aid.   Introduction This article reviews two Commission decisions: one concerning a Czech regulatory measure and another concerning existing aid to German social organisations. Both decisions dealt with complaints about alleged illegal State aid.   […]
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10. April 2018  |   State Aid Uncovered by Phedon Nicolaides

What Makes a Public Health Care System Non-economic?
State Aid Blogs - 10.04.18 HealthCare StateAid Economic
Health services are not economic in nature when they are funded by the state through taxation, they are provided for free or at a nominal fee which is the same for all patients and they are available to all citizens on a universal basis and on the same terms.   Introduction   After the judgment of the General Court of […]
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3. April 2018  |   State Aid Uncovered by Phedon Nicolaides

Advantage through Contracts
State Aid Blogs - ah life rd2jRzEum9g unsplash
A price below the regulated normal price confers an advantage. Competition is distorted even when the aid recipient does not expand its operations.   Introduction An undertaking can obtain an advantage without receiving an outright grant. The advantage may be hidden in a contract for the supply of an essential input at reduced prices. This is the issue tackled by […]
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27. March 2018  |   State Aid Uncovered by Phedon Nicolaides

Correct Pricing for the Use of Publicly Funded Infrastructure
State Aid Blogs - m 6
Publicly funded infrastructure must be made available to users at prices that correspond to its market value.   Introduction   When publicly-funded infrastructure is placed at the disposal of an undertaking, that undertaking must pay a market price, otherwise it derives an advantage in the meaning of Article 107(1) TFEU. But what is the market price? Is it the price […]
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20. March 2018  |   State Aid Uncovered by Phedon Nicolaides

Private Creditor v Private Investor
State Aid Blogs - m 4
A private investor never agrees to an unprofitable transaction while a private creditor may agree to a loss in order to avoid a bigger loss from non-recovery of debt owed to it. A public authority acting as a private operator must disregard any losses it may incur from State aid it granted in the past.   Introduction   A question […]
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13. March 2018  |   State Aid Uncovered by Phedon Nicolaides

What Is and What Is not Export Aid
State Aid Blogs - 13.03. Trade StateAid deminimis
The prohibition of export aid prevents distortions in the internal market. Therefore, it cannot be considered as restricting intra-EU trade. Aid is classified as export aid only if it has a direct impact on exports. The incidental and indirect effect on exports of investment aid is not sufficient to categorise it as export aid.   Introduction On 28 February 2018, […]
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6. March 2018  |   State Aid Uncovered by Phedon Nicolaides

State Aid for R&D
State Aid Blogs - m 5
A large amount of State aid can still be compatible with the internal market if it meets all of the requirements of the RDI Framework.   Introduction   Since the coming into force of the GBER, only very few cases of R&D have been notified to the Commission. This means that it is not so obvious how the State aid […]
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