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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23. February 2016  |   State Aid Uncovered by Phedon Nicolaides

How to Determine the Selectivity of a Tax Measure
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A tax exception is normally a selective measure. However, exceptions which are open to all undertakings are not selective, even if they deviate from the standard tax rate or base. Exceptions which are open only to a few undertakings escape from being classified as selective only when the beneficiary undertakings are in a different legal or factual situation than non-beneficiaries. […]
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16. February 2016  |   State Aid Uncovered by Phedon Nicolaides

The Boundaries of Non-Economic Infrastructure and the Limits of the Funding Gap Method
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Public funding of assets which are used exclusively by certain undertakings constitutes State aid. If the state chooses to fund certain assets or activities, then it must do so consistently in all regions and in relation to all affected undertakings.   Introduction A typical mission of the state is to provide public goods. Normally public funding of public goods is […]
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9. February 2016  |   State Aid Uncovered by Phedon Nicolaides

Connecting Public and Private Infrastructure
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Public funding of public infrastructure is not State aid. Public funding of connections between public and private infrastructure is not State aid as long as it is open to all users and no fee is charged.   Introduction Last week’s article examined the use of a port facility. This week the focus is on a related issue: investment in port […]
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2. February 2016  |   State Aid Uncovered by Phedon Nicolaides

Possible Advantage from the Exclusive Use of Public-Funded Infrastructure
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The exclusive use of a public asset or an asset funded by public money may confer an advantage in the meaning of Article 107(1) TFEU if several competitors express their interest to use the same asset.   Introduction As public authorities are becoming more aware that placing public assets at the disposal of undertakings can involve State aid, they increasingly […]
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1. February 2016  |   Guest State Aid Blog by Lexxion Publisher

Court’s Diary – February 2016
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Find below the court’s diary for all State aid cases. 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 04/02/2016 Judgment in Case T-287/11 – Heitkamp BauHolding v Commission (General Court – Ninth Chamber) Judgment in […]
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26. January 2016  |   State Aid Uncovered by Phedon Nicolaides

Nature Conservation as a Service of General Economic Interest
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Public funding of non-economic activities does not create State aid problems when any related economic activities are clearly separated. The 2012 SGEI package can apply retroactively.   Introduction Member States of the European Union are free to designate the services they consider to be in the general economic interest. However, the wide discretion they enjoy in this respect falls under […]
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19. January 2016  |   State Aid Uncovered by Phedon Nicolaides

Is there an Advantage when the State Pays for Compulsory Milk Tests?
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Undertakings obtain an advantage when the state pays for their normal costs. Normal costs are costs which are inherent in the operations of undertakings. The costs of meeting legal obligations are normal.   Introduction The case law on advantage in the meaning of Article 107(1) TFEU says that aid confers an advantage to undertakings when they obtain a benefit that […]
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12. January 2016  |   State Aid Uncovered by Phedon Nicolaides

Valuation of Assets Disposed by the State
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The value of an asset can be determined according to different methods. The main methods examine future income or comparable transactions or stock market valuation. Agreements between sellers and buyers that contain indemnification clauses or settle past claims do not reflect the true market value of the sold asset.   Introduction 9 December 2015, the General Court rendered its judgment […]
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5. January 2016  |   State Aid Uncovered by Phedon Nicolaides

An Exception Is Not Necessarily Selective: The Case of the Spanish Tax Lease [1]
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An exception from a tax system is not selective if it is a priori open to any tax payer. Checks by tax authorities to ensure that a measure is applied correctly do not constitute exercise of administrative discretion that may render a measure de facto selective. The impact of a measure on trade and competition cannot be merely presumed just […]
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1. January 2016  |   Guest State Aid Blog by Lexxion Publisher

Court’s Diary – January 2016
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Find below the court’s diary for all State aid cases. 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 28/01/2016 Judgment in T-507/12 -Slovenia v Commission (General Court – Fifth Chamber) Do you know we also publish […]
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12. January 2015  |   State Aid Uncovered by Phedon Nicolaides

“Good” Procedures Make “Good” State Aid: Ex Ante Conditionality for Effective Application of EU State Aid Rules
State Aid Blogs - 21.11.State resources State control
Structural fund rules for the period 2014-2020 define ex ante conditionalities that have to be satisfied by Managing Authorities that use EU funds to grant State aid. The ex ante conditionalities aim to strengthen the administrative capacity of Managing Authorities to grant State aid correctly. The European Commission has issued guidance on arrangements that can lead to improved administrative capacity. […]
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5. January 2015  |   State Aid Uncovered by Phedon Nicolaides

Tax Measures with Specific Objectives Can still Be General
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A tax measure that applies to certain transactions is not selective if it does not preclude any company or type of asset. Conditions for the application of a tax measure may be justified by the logic of the tax system. The Commission may not use Article 107(3) to assess the compatibility with the internal market of a tax measure that […]
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29. December 2014  |   State Aid Uncovered by Phedon Nicolaides

Another Measure that Cannot Be Justified by the Logic of the Tax System
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The granting of a tax exception is often found to constitute State aid. But the non-levying of a tax may also fall within the scope of Article 107(1). Competitors have more rights when the Commission does not open the formal investigation procedure.   IntroductionOn 25 November 2014, the Court of Justice, in case T-512/11, Ryanair v European Commission, annulled Commission […]
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23. December 2014  |   State Aid Uncovered by Phedon Nicolaides

An Important Project of Common European Interest
State Aid Blogs - An Important Project of Common European Interest
Infrastructure projects which are economic in nature are subject to State aid scrutiny regardless of their importance. However, public funding of transport networks which are open to all users does not constitute State aid. Introduction State aid approval of important projects of common European interest is very rare. The joint Commission decisions SA.36558 and SA.38371 [Denmark] and SA.36662 [Sweden] concerning the […]
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15. December 2014  |   State Aid Uncovered by Phedon Nicolaides

Application of the Market Economy Investor Principle to a Company Processing Agricultural Products
State Aid Blogs - Application of the Market Economy Investor Principle to a Company Processing Agricultural Products
When a public entity injects fresh capital in a company in which it is already a shareholder, the new capital does not constitute State aid when it satisfies three conditions: i) all shareholders contribute in proportion to the shares they own, ii) the private participation is simultaneous and iii) the private participation is economically significant. Introduction   In this article […]
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9. December 2014  |   State Aid Uncovered by Phedon Nicolaides

A Surprising Interpretation of the Concept of Selectivity
State Aid Blogs - A Surprising Interpretation of the Concept of Selectivity
Tax measures are selective when they constitute an exception or deviation from the normal or common system of taxation. In addition, the exception must be open only to a pre-defined category of undertakings. IntroductionOften, the decisive element in whether a tax measure constitutes State aid is the existence of selectivity. On 7 November 2014, the General Court ruled on two […]
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1. December 2014  |   State Aid Uncovered by Phedon Nicolaides

The First Application of the New GBER to Sport Infrastructure
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Public funding of local sport infrastructure may constitute State aid. The granting of a concession contract for the construction and/or operation of the infrastructure may not exclude State aid for the concessionaire. Measures based on the new GBER have to satisfy both its general and specific provisions. The funding gap method can be used in the context of the GBER. […]
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24. November 2014  |   State Aid Uncovered by Phedon Nicolaides

Land Transactions: Commercial Deals v Regulatory Acts
State Aid Blogs - Land Transactions Commercial Deals v Regulatory Acts
Regulation on land use or changes in such regulations do not constitute State aid. Administrative methods for calculating the value of public land do not necessarily prevent the granting of State aid if they do not reflect the evolution in market valuations.   IntroductionMany local authorities own land or regulate the use of land. They also sell or buy land. […]
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18. November 2014  |   State Aid Uncovered by Phedon Nicolaides

Recovery of State Aid and Penalty for Failing to Recover Incompatible Aid
State Aid Blogs - Recovery of State Aid and Penalty for Failing to Recover Incompatible Aid
Extension of an existing aid measure results in the granting of new aid. Only conditions of absolute impossibility can justify non-recovery of incompatible aid. Member States have to exhaust all possible options to recover incompatible aid and, if necessary, have to force the closure of the recipient of the aid. IntroductionIn this article I examine two recent judgments both of […]
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11. November 2014  |   State Aid Uncovered by Phedon Nicolaides

Reduction of Property Taxes and Electricity Tariffs
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Relief from property tax is State aid even when the user of the property is involved in defence contracts. Providing cheaper electricity to a few manufacturers cannot be considered to be an appropriate measure for regional development. Introduction This article summarises several judgments which were delivered in October 2014. They concern a tax exemption in Spain and reduction of electricity […]
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