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. October 2017  |   State Aid Uncovered by Phedon Nicolaides

Private Creditor Test
State Aid Blogs - SAH Blog26 GBERd
The Commission must apply the private creditor test even if a Member State does not request it or believes that it is not relevant.   Introduction Private investors always have two options: to invest or not to invest. They choose the option that generates the largest amount of profit or revenue. Similarly, private creditors also have two options: call in […]
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17. October 2017  |   State Aid Uncovered by Phedon Nicolaides

State Resources and Imputability
State Aid Blogs - 17.10. imputability stateaid
When the state acts in its capacity as legislator it is not presumed to direct the resources of undertakings it owns and over which it can exercise dominant influence as a shareholder. Introduction On 13 September 2017, the Court of Justice replied to a request from a national court to advise it on the concept of state resources [case C‑329/15, […]
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10. October 2017  |   State Aid Uncovered by Phedon Nicolaides

Pitfalls in the Use of De Minimis Aid
State Aid Blogs - 05.12.Imputability of Aid State aidz
Calculating de minimis aid according to the average amount of aid received by undertakings is wrong. Introduction It appears that all Member States grant de minimis aid, even though some tend to grant it more easily than others. De minimis aid can be used to subsidise any costs, including those which are not eligible under other State aid rules. The […]
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4. October 2017  |   State Aid Uncovered by Phedon Nicolaides

The Necessity and Proportionality of Regional Aid
State Aid Blogs - m 5 1
The Commission must open the formal investigation procedure when it has serious doubts about the compatibility of State aid. The aid that is necessary to induce a company to locate its investment in an assisted region is the amount that covers the difference in costs between the assisted region and the best alternative location. This amount is also proportional.   […]
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26. September 2017  |   State Aid Uncovered by Phedon Nicolaides

Odysseus and the Sirens: A Rational Market Operator Can Agree to be Bound by the Ruling of an Arbitration Tribunal
State Aid Blogs - m 6 1
A rational market operator can agree to arbitration if there is no reasonable prospect of a better outcome. However, a rational operator would ensure that the terms according to which an arbitration decision can be taken would be defined in advance and would not be prejudicial to the operator.   Introduction Is it rational for a market operator to agree […]
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19. September 2017  |   State Aid Uncovered by Phedon Nicolaides

Calculating the Amount of State Aid in a 100% Public Guarantee
State Aid Blogs - CCH tate aid infratructure
The proxy rates in the Commission Notice on Guarantees cannot be used in cases of state guarantees that cover 100% of the underlying loans.   Introduction Last week’s article reviewed the terms of the operation of regional airports in Greece. (View it here). This week’s article continues with the theme of management of public infrastructure and examines Commission decision SA.42545 on […]
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12. September 2017  |   State Aid Uncovered by Phedon Nicolaides

Concession Agreements Free of State Aid
State Aid Blogs - concessions State aid airports
Awards of concession contracts should follow a procedure which is open, transparent, non-discriminatory and unconditional. Prices may be regulated to prevent excessive prices and profits. But, the concession fee may be adjusted to enable the concessionaire to earn a sufficient return.   Introduction This article examines the link between State aid and concession agreements. In decision SA.44259, the Commission considered […]
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5. September 2017  |   State Aid Uncovered by Phedon Nicolaides

Sale, Liquidation and Other Options for Private Investors
State Aid Blogs - m 33
A private investor chooses the less costly option between selling a company at a loss and liquidating it. In addition to avoiding losses, a private investor also cares for its image, quantifies its value and factors it in the sale or liquidation option.   Introduction On 6 July 2017, the General Court ruled in two closely related cases: T-74/14, France […]
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29. August 2017  |   State Aid Uncovered by Phedon Nicolaides

Bank Recapitalisation that Conforms to the Market Economy Investor Principle
State Aid Blogs - m 7
A public authority acts like a private investor when it injects capital in a stricken bank if there is a realistic prospect of sufficient return that compensates it for the risk it bears.   Introduction Caixa Geral de Depósitos (CGD) is the largest bank in Portugal and is now fully owned by the State. In June 2012, Portugal notified to […]
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24. August 2017  |   Guest State Aid Blog by Lexxion Publisher

15th Jubilee Feature – State Aid Experts Paying Court to EStAL: Alexander Rose
Since 2002 Lexxion Publisher’s European State Aid Law Quarterly – EStAL serves as a forum for dialogue and deliberation on all issues related to State aid. On the occasion of our 15th anniversary special feature we have gathered our State aid family to reflect upon their joint journey together with our precious EStAL and of course our favourite topic State […]
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21. February 2017  |   State Aid Uncovered by Phedon Nicolaides

State Aid for R&D: How Intermediaries Pass on Aid to Third Parties
State Aid Blogs - StateAidHub blogpost46 incompatible StateAid
Operators of research infrastructure do not benefit from State aid, if they fully pass on the aid to the users of the infrastructure. The amount of aid must be quantified. Introduction The beneficiaries of State aid to support R&D are normally those who carry out research. However, in the case of aid to research infrastructure there may be two categories […]
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14. February 2017  |   State Aid Uncovered by Phedon Nicolaides

How to Calculate a Transparent Amount of State Aid in Public Guarantees
State Aid Blogs - m 31
State aid granted in the form of public guarantees is transparent aid when it is calculated according to the methodology of the 2008 Commission notice or a methodology that is notified to and approved by the Commission.   Introduction Aid to farmers, small enterprises or revenue-generating projects is often given in the form of state guarantees. This is because what […]
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7. February 2017  |   State Aid Uncovered by Phedon Nicolaides

The Scope of Public Service Obligations
State Aid Blogs - m 32
Public service obligations may cover both profitable and unprofitable segments of the market.   Introduction 18 January 2017, the General Court delivered its judgment in case T-92/11 RENV, Jørgen Andersen, v European Commission.[1] Mr Andersen appealed against Commission Decision 2011/3 which concluded that public service contracts between the Danish Ministry of Transport and Danske Statsbaner [DSB], the incumbent train operator, contained […]
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31. January 2017  |   State Aid Uncovered by Phedon Nicolaides

Financial Cooperatives
State Aid Blogs - m 33
National courts may not question Commission decisions but they may ask the Court of Justice for guidance on how to interpret Commission decisions. Protection of shareholders of a particular category of companies is a selective measure. Introduction This is the last article dealing with the judgments that were rendered by EU courts on 21 December 2016. This article reviews the reply […]
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17. January 2017  |   State Aid Uncovered by Phedon Nicolaides

Part II: Developments on the Concepts of Advantage and Selectivity
State Aid Blogs - StateAidHub blogpost2 2019 lexxion stateaid airports
The advantage conferred by State aid is not necessarily equivalent to the economic benefit that is eventually enjoyed by aid recipients. Incompatible State aid has to be repaid regardless of whether it is passed on to the customers of the aid recipients. Undertakings derive an advantage when state intervention reduces the costs they would bear under “normal market conditions” whereby […]
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10. January 2017  |   State Aid Uncovered by Phedon Nicolaides

Developments on the Concepts of Advantage and Selectivity
airplane
The advantage conferred by State aid is not necessarily equivalent to the economic benefit that is eventually enjoyed by aid recipients. Incompatible State aid has to be repaid regardless of whether it is passed on to the customers of the aid recipients. Undertakings derive an advantage when state intervention reduces the costs they would bear under “normal market conditions” whereby […]
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3. January 2017  |   State Aid Uncovered by Phedon Nicolaides

Public Service Obligations and Award for Damages
public bus
Providers of public services must keep separate accounts. The parameters for calculating the compensation for the extra costs of public services must be determined in advance. Awards for damages do not constitute State aid. However, no damages can be awarded as a substitute for incompatible State aid.   Introduction It is often asked how compensation measures for public service obligations […]
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27. December 2016  |   State Aid Uncovered by Phedon Nicolaides

Funding of the Spanish Public Broadcaster and Hypothecation of Taxes
State Aid Blogs - m 5 2
Tax payers have grounds to object to a tax on the basis of Article 107(1) TFEU only when the tax is “asymmetrical” or when it is “hypothecated” to an aid measure.   Introduction On 10 November 2016, the Court of Justice ruled in case C‑449/14 P, DTS v European Commission.[1] DTS, a Spanish television company, appealed against the judgment of the General […]
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22. December 2016  |   State Aid Uncovered by Lexxion Publisher

5 most read articles by Phedon Nicolaides in 2016
State Aid Blogs - m 6 2
Questions around selectivity of tax measures, the private creditor test, the new Commission Notice on the Notion of State Aid and many more have moved and shaped this year’s judgments on State aid. See which articles by Prof. Phedon Nicolaides were the most popular ones in 2016. We have also started an exciting new journey of State aid videos on […]
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20. December 2016  |   State Aid Uncovered by Phedon Nicolaides

Existing v New Aid and Role of National Courts
State Aid Blogs - m 7 1
Modification of an existing aid measure turns it into a new aid measure if it affects its compatibility with the internal market. National courts must also notify to the Commission any new aid measure they detect.   Introduction On 26 October 2016, the Court of Justice ruled in case C‑590/14 P, DEI v Commission.[1] DEI, the incumbent electricity producer in Greece appealed against […]
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