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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20. February 2018  |   State Aid Uncovered by Phedon Nicolaides

What Happens when Things Go Wrong
State Aid Blogs - 20.02.18 StateAid
Only EU institutions can provide assurances that aid is granted legally. The amount of State aid in a state guarantee given to a company in difficulty can be equal to the amount of the guaranteed loan. The simultaneity of public and private investments is not enough to ensure that the public investment is at market terms. They must also be […]
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13. February 2018  |   State Aid Uncovered by Phedon Nicolaides

Investment in Airport Infrastructure
State Aid Blogs - ashim d silva pGcqw1ARGyg unsplash
Public funding of infrastructure used for non-economic purposes does not constitute State aid. Public investment in infrastructure used for economic purposes does not constitute State aid if the investment can generate a return that is acceptable to a private investor.   Introduction   On 25 January 2018, the General Court ruled in case T-818/14, Brussels South Charleroi Airport v Commission.[1] Brussels […]
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6. February 2018  |   State Aid Uncovered by Phedon Nicolaides

How a Private Investor Behaves: EDF v Commission
State Aid Blogs - 17.10. imputability stateaid
A private investor carries out an assessment of the prospective profitability of a company before it invests in it. Ex post assessment is not sufficient. Evidence that the investment is likely to be profitable is not enough. The return must be high enough to satisfy a private investor in a similar situation (by compensating it for the risk it assumes). […]
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30. January 2018  |   State Aid Uncovered by Phedon Nicolaides

The Puzzle of the State Acting as a Regulator
State Aid Blogs - joao silas UGQoo2nznz8 unsplash
When the state exercises its regulatory tasks, it does not have to demand fees and therefore it does not forgo potential state resources.   Introduction A few weeks ago the Commission considered whether the regulatory actions of the state fell within the scope of Article 107(1) TFEU. In decision SA.42028 concerning aid to Yliopiston Apteekki Oy in Finland, the Commission […]
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23. January 2018  |   State Aid Uncovered by Phedon Nicolaides

Danish Horse Racing
State Aid Blogs - horse betting Denmark State Aid
Taxes hypothecated to State aid measures fall within the scope of the assessment of the compatibility of those measures.   Introduction Operating aid is not normally allowed. Yet, in decision SA.48604 concerning horse-racing betting in Denmark the Commission appears to have authorised operating aid.[1] This measure was approved within six months. In the post-SAM, it must be one of the […]
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16. January 2018  |   State Aid Uncovered by Phedon Nicolaides

Selectivity Requires Comparison
State Aid Blogs - ah life rd2jRzEum9g unsplash
To determine whether a measure is selective it is necessary to compare the beneficiary companies to other companies which are in a similar situation and determine whether the latter receive the same advantage. Introduction[1]   On 20 December 2017, the Court of Justice delivered three judgments in appeals against rulings of the General Court concerning the expansion of digital terrestrial television […]
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9. January 2018  |   State Aid Uncovered by Phedon Nicolaides

Structural Disadvantages and Regional Aid
State Aid Blogs - StateAidHub blogpost35 port concessions
Aid that seeks to neutralise a structural disadvantage still confers an advantage. Aid that seeks to remedy market failure is selective. State aid that is compatible with the internal market must be necessary to achieve an objective of the Treaty and be capable of incentivising a change in the behaviour of the recipient undertakings.   Introduction On 13 December 2017, […]
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2. January 2018  |   State Aid Uncovered by Phedon Nicolaides

PART II: Concessions and State Aid: Does the State Act as a Regulator or Market Operator?
State Aid Blogs - marcin jozwiak 44YvpqQ595w unsplash
When Member States act as regulators they need not maximise revenue from the granting of concessions rights. When Member States act as regulators they must grant concession rights on the basis of procedures which are competitive, transparent, non-discriminatory and unconditional.   Part II: Public procurement principles[1] Principles for selection of concession holders The Commission examined also, in addition to the […]
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27. December 2017  |   State Aid Uncovered by Phedon Nicolaides

PART I: Concessions and State Aid: Does the State Act as a Regulator or Market Operator?
State Aid Blogs - m 36
When Member States act as regulators they need not maximise revenue from the granting of concessions rights. When Member States act as regulators they must grant concession rights on the basis of procedures which are competitive, transparent, non-discriminatory and unconditional. Introduction   Is it possible for a public authority to grant State aid through a defective procurement procedure? The answer […]
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21. December 2017  |   State Aid Uncovered by Lexxion Publisher

Top 5 State Aid Uncovered Posts in 2017
State Aid Blogs - m 1 2
Questions around grants for R&D&I projects, economic activities of religious establishments or concession agreements besides many more, have moved and shaped this year’s judgments on State aid. Also Brexit and its meaning for State aid control in the UK has been on everyone’s mind. See which articles by Prof. Phedon Nicolaides were the most popular ones in 2017. We have […]
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