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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29. May 2017  |   State Aid Uncovered by Phedon Nicolaides

The Art, Science and Law of Funding Services of General Economic Interest
State Aid Blogs - m 17
The compulsory nature of an assigned public mission makes the services covered by the mission different from those provided by market operators for profit.   Introduction The justification of government intervention for the purpose of ensuring delivery of adequate services of general economic interest [SGEI] and the design of measures that compensate providers of SGEI can be very tricky. This […]
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23. May 2017  |   State Aid Uncovered by Phedon Nicolaides

What Costs Are Charged by Public Authorities when they Act as Market Operators?
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Fees charged by operators to users of infrastructure must cover all relevant costs. The relevant costs are those which are causally linked to the agreements between users and operators. Introduction The rules in the Treaty on the Functioning of the European Union are neutral in their treatment of private or state-owned companies [Article 345 TFEU]. This means that companies cannot […]
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16. May 2017  |   State Aid Uncovered by Phedon Nicolaides

Regional Investment Aid and Sale of Land
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A company that applies for State aid is considered to acquire a right to that aid when assurances it has received from the granting authority can be enforced in court. The price of land can be reduced by the cost that a new owner would expend to make the land usable.   Introduction In decision SA.40448, the Commission assessed aid […]
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9. May 2017  |   State Aid Uncovered by Phedon Nicolaides

Bank Resolution Has to Comply with State Aid Rules as well as the Banking Recovery and Resolution Directive
State Aid Blogs - StateAidHub blogpost43 privateinvestor
Insurance funds contributed by banks become state resources if they are managed by public agencies. Sale of non-performing loans at market prices does not involve State aid.   Introduction Since 1 January 2016, the resolution financial institutions in Europe has been subject to stricter rules. The institutions which are established in the Eurozone fall with the jurisdiction of the Single […]
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3. May 2017  |   State Aid Uncovered by Phedon Nicolaides

Identification of the Reference Tax System: The Case of a Tax on Advertising Turnover
State Aid Blogs - m 20
Turnover taxes should be levied at a single rate. Introduction This is the fourth case involving turnover taxes that have been declared to be incompatible with the internal market [see Commission decision 2017/329].[1] A brief summary was published here on 13 December 2016 [http://stateaidhub.eu/blogs/stateaiduncovered/post/7697]. The reasoning of the Commission follows closely that of the other cases. However, what makes this case […]
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1. May 2017  |   Guest State Aid Blog by Lexxion Publisher

Court’s Diary – May 2017
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Find below the court’s diary for all State aid cases this month. Would you like to write a comment on one of them? Please don’t hesitate and get in touch with us ([email protected]), we are happy to publish your comment on the blog.   Thursday 18/05/2017 Judgment in case C-150/16 – Fondul Proprietatea vs Complexul Energetic Oltenia SA (Court of Justice – Fifth Chamber) […]
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26. April 2017  |   State Aid Uncovered by Phedon Nicolaides

A Postscript on Brexit and State Aid
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A short note on the previous blog post on State aid control in the UK after its withdrawal from the EU.   A few weeks ago, I wrote an article on State aid control in the UK after its withdrawal from the European Union [http://stateaidhub.eu/blogs/stateaiduncovered/post/8330]. In that article I suggested that the UK would maintain the same or a similar […]
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25. April 2017  |   State Aid Uncovered by Phedon Nicolaides

Public Support for Nature Conservation is not State Aid
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A nominal price may be charged for genuine non-economic services as long as it supports the achievement of the non-economic objective and covers only a small part of total costs.   Introduction Germany notified two measures of support for nature conservation in Saxony-Anhalt. Measure 1 [SA.45645] concerned projects of nature conservation and landscape maintenance.[1] Measure 2 [SA.46073] concerned aid to associations […]
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18. April 2017  |   State Aid Uncovered by Phedon Nicolaides

Ex Post Definition of the Method of Compensation Makes State Aid Incompatible with the Internal Market
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Compliance with public service obligations imposed on a provider of services of general economic interest should not be left to the discretion of that provider.   Introduction Last week’s article examined a public service obligation for providing maritime links to Corsica (view it here: http://stateaidhub.eu/blogs/stateaiduncovered/post/8370). This week’s article reviews a similar obligation for maritime links to the neighbouring island of Sardinia. […]
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11. April 2017  |   State Aid Uncovered by Phedon Nicolaides

The Need for Public Services Is Shown by Absence of Private Services
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The scope of public service obligations must be proportional to the identified market failure.   Introduction On 1 March 2017, the General Court dismissed the application of Societe Nationale Maritime Corse Mediterranee [SNCM] against the Commission [case T-454/13, SNCM v Commission].[1] The Commission had found in decision 2013/435 that SNCM received incompatible State aid that had to be recovered. SNCM carried […]
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31. May 2016  |   State Aid Uncovered by Phedon Nicolaides

Support for Green Electricity: State Resources and “PreussenElektra”
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Arrangements established by law whereby undertakings are compensated for any extra payments they make to producers of green electricity are likely to bring those payments under the control of the state. Those payments will then be classified as state resources regardless of whether they are managed by private entities.   Introduction On 10 May 2016, the General Court issued its […]
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24. May 2016  |   State Aid Uncovered by Phedon Nicolaides

Tax Exemptions Authorised by the Council of the EU
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State aid is an objective concept. When the Commission assesses a measure it has to examine its effects and cannot be bound by a decision of the Council. A beneficiary of State aid cannot entertain legitimate expectations simply because the Commission does not appear to object to the aid.   Introduction On 22 April 2016, the General Court rendered its judgment […]
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18. May 2016  |   State Aid Uncovered by Phedon Nicolaides

PART II: Regional Development and i) Market Economy Operator Test ii) Services of General Economic Interest
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A market economy operator undertakes activities whose incremental revenue exceeds their incremental costs. A market economy operator ignores costs which are unaffected by those activities. A service of general economic interest has special characteristics that set it apart from other services with positive impact on the economy. Having a positive impact is not enough.   Part II: Public tasks and […]
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10. May 2016  |   State Aid Uncovered by Phedon Nicolaides

PART I: Regional Development and i) Market Economy Operator Test, ii) Services of General Economic Interest
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A market economy operator undertakes activities whose incremental revenue exceeds their incremental costs. A market economy operator ignores costs which are unaffected by those activities. A service of general economic interest has special characteristics that set it apart from other services with positive impact on the economy. Having a positive impact is not enough.   Introduction National and regional authorities […]
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3. May 2016  |   State Aid Uncovered by Phedon Nicolaides

Calculation of State Aid in Guarantees
State Aid Blogs - 21.11.State resources State control
State guarantees can be used to support loans for working capital. The amount of State aid in guarantees can be calculated to remain below the de minimis threshold of EUR 200,000.   Introduction With financial instruments being very much in vogue, there is much interest in the use of guarantees and loans as a means of granting State aid. Therefore, […]
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18. April 2016  |   State Aid Uncovered by Phedon Nicolaides

Who is Aided when a Bank is Resolved?
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Bank resolution may involve State aid. However, the depositors do not normally benefit from State aid, nor do the buyers of the viable assets, if they pay a market price. Any aid normally goes to the remaining, non-performing, assets that are eventually liquidated.   Introduction The new bank resolution regime that came into force on 1 January 2016 aims to […]
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12. April 2016  |   State Aid Uncovered by Phedon Nicolaides

The Private Creditor Test: All Options Must be Taken into Account
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A private investor always takes into account all available information before it makes any investment. Similarly, a private creditor takes into account all available options for recovering the largest possible amount of the money that is due. Such options may include different legal procedures. In assessing alternative options, a private creditor considers not only the amount that may be recovered, […]
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5. April 2016  |   State Aid Uncovered by Phedon Nicolaides

Local Infrastructure
State Aid Blogs - StateAidHub blogpost47 Finance lexxion GBER SMEs
Public funding of local infrastructure is not State aid when the responsibility for the infrastructure falls within the remit of public authorities, it is not commercially exploited, it is open to all users, it is not intended to support the needs of any particular undertaking and any benefits to any undertaking are incidental.   Introduction Even since the adoption of […]
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30. March 2016  |   State Aid Uncovered by Phedon Nicolaides

The Treatment of Advisory and Information Services under State Aid Rules: The Case of the German Milk Levy
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Public funding of advisory and information activities may constitute State aid. Public funding of industry associations may constitute State aid.   Introduction An article that was published on this blog in January (view the article HERE) dealt with the issue of compulsory tests. If tests which are intended to safeguard public health are paid for by the state, is there any […]
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23. March 2016  |   State Aid Uncovered by Phedon Nicolaides

Compensatory Payments Can still Confer an Advantage
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Membership of a compulsory insurance scheme can still confer an advantage to participating undertakings. Private contributions can still become state resources if they are paid into a fund that is managed by the state. Member States always have the option to ask for a measure to be assessed directly on the basis of the Treaty but they have to justify […]
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