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. November 2016  |   State Aid Uncovered by Phedon Nicolaides

Media Plurality in Denmark
State Aid Blogs - m 10 1
State aid measures need not be open to all undertakings.   Introduction On 11 October 2016, the General Court rendered its judgment in case T-167/14, TSøndagsavisen v Commission.[1] Søndagsavisen requested annulment of Commission decision SA.36366 on a measure that had been notified by Denmark. The purpose of the measure was to support production and innovation in the newspaper and magazine sector […]
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23. November 2016  |   State Aid Uncovered by Phedon Nicolaides

No Affectation of Trade
State Aid Blogs - m 11 1
Public subsidies that do not affect cross-border trade either directly or indirectly do not constitute State aid in the meaning of Article 107(1). The direct trade effect is the impact on customers or users. The indirect trade effect is the impact on potential market entrants.   Introduction In April 2015, the Commission surprised us with seven decisions that concluded that […]
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15. November 2016  |   State Aid Uncovered by Phedon Nicolaides

Private Investor v Private Creditor
State Aid Blogs - 01.11.17 State aid
When the state, acting as a private investor, seeks to recover past public investments, it must aim to maximise the recoverable amount. However, public funds that were granted as State aid must be ignored when the recoverable amount of past investments is calculated.   Introduction On 15 September 2016, the General Court rendered its judgment in case T‑386/14, FIH Holding v […]
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8. November 2016  |   State Aid Uncovered by Phedon Nicolaides

1) Selectivity of Health Tests 2) Existing v New Aid in Preferential Electricity Tariffs
State Aid Blogs - m 14
A measure can be selective even if it applies to a whole sector. An existing aid measure becomes new when a court extends it temporarily.   Introduction This article reviews two judgments: one on BSE tests in Belgium and another on preferential electricity tariffs in Greece. The issue at hand with respect to the BSE test was whether a measure […]
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1. November 2016  |   State Aid Uncovered by Phedon Nicolaides

Turnover Taxes Can be Incompatible with the Internal Market
State Aid Blogs - m 12 1
Progressive taxes levied on turnover can provide State aid that is incompatible with the internal market. Flat turnover taxes are proportional and therefore likely to be free of State aid.   Introduction Hungary wanted to levy two types of turnover taxes whose purpose was to protect health. The first tax was levied on tobacco products.[1] The Commission found, in decision 2016/1846, […]
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25. October 2016  |   State Aid Uncovered by Phedon Nicolaides

Belgium’s Alternative Tax Regime for the Diamond Sector
State Aid Blogs - m 13 1
Alternative tax regimes do not provide State aid as long as they raise the amount of tax paid and they are justified by the nature or general scheme of the normal system of taxation.   Introduction During the past three years, the Commission has been pursuing multinational companies that pay too little tax. Its main objection to the tax treatment […]
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19. October 2016  |   Guest State Aid Blog by Gherardo Carullo

Right of Access and State Aid Procedures: a Look at the General Presumption of Confidentiality and the Overriding Public Interest in Case C-271/15, Sea Handling v Commission
airplane flying
Today we are glad to welcome Dr. Gherardo Carullo, research fellow and Ph.D. in law at University of Milan, LL.M. (King’s College London), to our State Aid Blog. He specialises in public law, from a national and European perspective, and in particular in State intervention in the markets, both in his academic studies and in the legal profession. In this […]
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18. October 2016  |   State Aid Uncovered by Phedon Nicolaides

Compliance with State Aid Rules in Cohesion Policy: A Special Report of the European Court of Auditors
State Aid Blogs - m 14 1
Control of State aid by national authorities needs to be strengthened. Typical mistake is to grant aid after a project has started or to subsidise ineligible costs. Aid measures for risk capital, SGEI and R&D appear to be particularly prone to error.    Introduction   On 4 October 2016, the European Court of Auditors [ECA] published a special report 24/2016 […]
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11. October 2016  |   State Aid Uncovered by Phedon Nicolaides

Non-economic Activities, Absolute Impossibility to Recover Incompatible Aid and the Powers of National Courts
State Aid Blogs - SAH blog48 Montessori Lexxion
This article reviews three judgments that were all rendered on 15 September 2016. The first two concern the concept of economic activity. The third is about the rights of national courts to consider the correctness of Commission decisions. The Court of Justice has said clearly that national courts may not question Commission decisions.   Economic activity The first two cases […]
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6. October 2016  |   State Aid Uncovered by Phedon Nicolaides

Compensation for the Extra Costs Imposed by Law
State Aid Blogs - m 15 1
When the state imposes obligations which create extra costs for a single undertaking, that undertaking suffers a disadvantage in relation to its competitors. The extra costs are abnormal because normal costs are those borne by all competitors. Introduction On 14 July 2016, the General Court rendered its judgment in case T 143/12, Germany v Commission.1 The outcome was a victory for […]
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8. September 2015  |   State Aid Uncovered by Phedon Nicolaides

Services of General Economic Interest: How to Compensate and Induce more Efficiency
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Even traditional monopolists, like postal operators, have to comply with the rules on compensation for the extra costs of public service obligations. SGEI providers can be compensated in a way that induces them to become more efficient.   Introduction This article examines case Commission decision SA.38788 concerning compensation for the UK Post Office Ltd [POL] in the period 2015-18.[1] It is […]
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2. September 2015  |   State Aid Uncovered by Phedon Nicolaides

When Do Public Pronouncements Confer an Advantage to Undertakings?
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Public pronouncements can confer an advantage if they are sufficiently precise and clearly commit a public authority to support an undertaking.   Introduction[1] Politicians often claim that they would never allow important national companies to go bust. Occasionally, such claims appear to sway market sentiment in favour of those companies. Private investors are heartened by the avowed support of the […]
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25. August 2015  |   State Aid Uncovered by Phedon Nicolaides

The Challenge of Calculating a Market Price
State Aid Blogs - m 10 2
The market price of land or buildings can be determined via auction, expert valuation or other appropriate methods.   Introduction On 16 July 2015, the Court of Justice delivered its judgment in case C‑39/14, BVVG Bodenverwertungs- und -verwaltungs GmbH [BVVG] v Landkreis Jerichower Land in Germany.[1] The judgment was in response to a request for a preliminary ruling concerning a dispute […]
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18. August 2015  |   State Aid Uncovered by Phedon Nicolaides

Why Do some Member States Offer so much Fiscal Aid?
State Aid Blogs - StateaidHub blogpost11 Lexxion 2019 Tax Commission EU judgement
Member States differ significantly in their propensity to grant fiscal aid.   Introduction Interest in fiscal aid has been rekindled recently by two unrelated events. First, the Commission opened a number of investigations on the alleged special tax treatment accorded to multinational companies such as Apple and Starbucks. These investigations are believed to be almost completed and the Commission is […]
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11. August 2015  |   State Aid Uncovered by Phedon Nicolaides

Ex post Evaluation of State Aid Measures
State Aid Blogs - 21.11.State resources State control
Ex post evaluation is not just a “pillar” of State Aid Modernisation. It is also an indispensable tool for understanding the impact and effectiveness of State aid. State aid modernisation and decentralisation   One of the pillars of the Commission’s State Aid Modernisation initiative is the decentralisation of responsibility for the implementation of State aid measures. The decentralisation works by […]
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4. August 2015  |   State Aid Uncovered by Phedon Nicolaides

The Use and Abuse of De Minimis Aid & State Resources
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Individual awards of de minimis aid must remain below the relevant threshold as well as the sum of all individual awards in any three-year period. Aid measures which are funded by beneficiaries themselves are unlikely to constitute State aid.   Introduction This article reviews two cases that, among other things, deal with the use and abuse of de minimis aid […]
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28. July 2015  |   State Aid Uncovered by Phedon Nicolaides

The Market Economy Investor Principle Applies also to Avoidance of Losses
State Aid Blogs - m 11 2
A public authority can act as a private investor in paying to avoid costly contractual clauses. A public authority can act as a private investor in paying to bring forward future revenue. Introduction   When a market operator invests to make profit, its underlying logic is the same as when it pays to avoid losses. In both cases it is […]
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21. July 2015  |   State Aid Uncovered by Phedon Nicolaides

Application of the MEIP to Transactions between Parent and Subsidiary Companies
State Aid Blogs - m 1 4
The Market Economy Investor Principle also applies to transactions between related companies. A private investor enjoys a margin of discretion in deciding in favour or against an investment. However, despite that margin of discretion, a prudent private investor always carries out an assessment of the potential profitability of the investment before it commits any money.   Introduction When a public […]
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14. July 2015  |   State Aid Uncovered by Phedon Nicolaides

Using Loans to Grant De Minimis Aid and GBER Compatible Aid
State Aid Blogs - StateAidHub blogpost23
De minimis aid underpins “off-the-shelf” financial instruments which leverage private investment and at the same time ensure that all aid is passed on to the final beneficiary.   Introduction One of the most convenient aid instruments is de minimis aid. It can be used for any purpose [apart from promotion of exports or on condition that domestic products are favoured] […]
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7. July 2015  |   State Aid Uncovered by Phedon Nicolaides

Privatisation by Splitting the Assets
State Aid Blogs - m 12 2
The sale of a public undertaking [privatisation] needs to be preceded by independent valuation and be carried out on the basis of a competitive procedure. Certain guarantees may be provided to prospective buyers, if they could increase the sale price. The break-up of an undertaking and the disposal of the different parts through separate sales should be shown to generate […]
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