Executive Summary
- Commercial exploitation of a sports infrastructure is economic in nature.
- The operator of such infrastructure is an undertaking regardless of whether it is owned by the state, it is not-for-profit, it has certain public interest tasks, its fees are regulated and its revenue is reinvested in the infrastructure.
- Providing access to the infrastructure to amateur sport clubs and schools free of charge is non-economic in nature.
- The Commission checks whether public funding constitutes state aid at four different levels: ownership, construction, operation/management, users.
Table of Contents:
- Existence of advantage
- Lawfulness of the aid measure
- Assessment of compatibility with the internal market
Existence of advantage
The Commission examined whether the measure conferred an advantage in the meaning of Article 107(1) TFEU at five different levels: 1) Project management, 2) construction, 3) ownership [i.e. HOC], 4) operation [i.e. OAKA], 5) users.
1. Project management & implementation level
The manager was the Project Preparation Facility [PPF], functioned within the state agency Hellenic Republic Asset Development Fund [HRADF]. “(130) The Commission notes that the PPF’s involvement in the present measure stems directly from statutory delegation under Greek law and not from a contractual or market-based relationship … The PPF does not act as a commercial service provider but as an administrative unit performing public-law tasks on behalf of the State … It operates under the supervision of the Ministry of Finance and the Ministry of Education, Religious Affairs and Sports, in accordance with the applicable provisions governing projects of strategic importance”.
“(131) The PPF’s remuneration, capped at 0.5 % of the total project budget … merely covers its internal operational and administrative costs for engineering, procurement and financial management expertise. This payment does not include any profit margin or discretionary element and is not determined through a market mechanism. It therefore cannot be regarded as a selective economic benefit.”
“(132) Moreover, the PPF does not acquire, hold or exercise any ownership or exploitation rights over the infrastructure and cannot use the project results for economic gain. All contractual rights, obligations and financial accountability remain with Greece”.
“(133) In consequence, the Commission concludes that the PPF does not qualify as an undertaking within the meaning of Article 107(1) TFEU and does not receive any advantage under the measure.”
2. Construction level
“(134) At the construction level, the public funding … covers two distinct workstreams, consisting of (i) limited preparatory and urgent safety related works, which were necessary to allow for the safe re-opening and operation of the stadium and were therefore already carried out prior to the main restoration project, amounting to approximately EUR 5.8 million, and (ii) the main restoration and modernisation works to be implemented at a later stage. These works will be carried out by external contractors selected and remunerated by the PPF, acting on behalf of Greece and the OAKA Operator”.
“(135) An advantage for suppliers or contractors can only exist where public authorities procure goods or services on terms that deviate from market conditions. Conversely, where contracts are awarded through open and competitive procedures ensuring equal access and best value for money, the selected contractors are deemed to operate under market conditions and do not obtain any economic advantage within the meaning of Article 107(1) TFEU. This applies equally to contracts awarded under standard procurement procedures and to contracts awarded under exceptional procedures justified by extreme urgency, such as negotiated procedures without prior publication, provided that the remuneration reflects market conditions.”
“(136) The main contracts for the implementation of the project will be awarded through open, transparent and non-discriminatory public procurement procedures in accordance with European and national public procurement law … Consequently, in the Commission’s view, these entities do not obtain any selective economic advantage.”
“(138) The same holds true for the workstream covering the limited preparatory and urgent safety-related works already carried out in order to allow for the safe re opening and operation of the Stadium. … those contracts were awarded in accordance with Article 32(2)(c) of Directive 2014/24/EU, …, due to reasons of extreme urgency and public safety brought about by unforeseeable events. Although no open tendering procedure was conducted, invitations to submit offers were sent to at least three potential economic operators for each contract, ensuring competitive tension. The remuneration was determined on the basis of updated market price references and limited to the minimum necessary to address the identified safety risks and to ensure compliance with minimum safety requirements, without granting any economic advantage.”
“(139) In consequence, the Commission is of the opinion that no State aid within the meaning of Article 107(1) TFEU is present at the level of the contractors involved either in the preparatory and urgent safety-related works or in the design and execution of the restoration and modernisation works of the Stadium.”
3. Ownership level
“(141) With respect to a potential advantage [for HOC] it has to be noted, that publicly financed improvements of existing infrastructure normally confer an advantage upon the owner, as they enhance the value, functionality or longevity of the asset without the owner bearing the corresponding costs. In such cases, the owner’s financial position is improved through a State-funded capital investment which it would otherwise have had to finance itself. However, according to the Leipzig/Halle airport judgment of the Court of Justice, the public funding of the construction may constitute State aid only, when said infrastructure will be used for commercial activities. Following the Court’s judgement, the economic character of the later use of the infrastructure would determine the economic nature of its construction. In particular, an investment in infrastructure used for non-economic public purposes does not grant an advantage to the owner if that owner does not derive any market-related benefit or strengthened competitive position. This applies, in particular, where the owner does not itself carry out any economic activity through the use of the infrastructure and where its role is limited to holding the infrastructure as a public asset, without any right to commercially operate or otherwise economically exploit it. In such circumstances, the public financing is not liable to improve the owner’s position in relation to any economic activity and therefore does not confer an advantage within the meaning of Article 107(1) TFEU.”
At this point footnote 43 of the decision refers to the paragraph 16 of the Commission’s 2016 Notice on the Notion of State Aid and paragraphs 107-118 of the seminal judgment in case C-222/04, Cassa di Risparmio di Firenze. Those paragraphs make a distinction between the owner of an undertaking and the undertaking itself. If the owner is not involved in the management of the undertaking and if the owner has no other commercial activities, then the owner is not an undertaking. Therefore, the decisive element with respect to HOC was its non-involvement in the operations of OAKA, not that it derived no advantage. Naturally, since it was a non-undertaking, necessarily it could not use any public money for commercial purposes or to gain a commercial advantage.
“(144) In the present case, the HOC holds the property rights (in rem) over the Stadium … However, the HOC has no competence to manage, operate or economically exploit the Stadium … all powers of management, operation and exploitation have been permanently entrusted by law to the OAKA Operator, a distinct legal entity governed by private law belonging to the public sector and wholly owned by Greece”.
“(146) The HOC neither bears the costs of maintaining the Stadium nor receives any income or compensation linked to its operation … All revenues from the Stadium’s use go to the OAKA Operator, which manages them within the framework of its public-service mission and under ministerial supervision … The HOC is thus fully insulated from the economic and financial consequences of the public investment. As established in the NoA and already mentioned above … where the formal owner of an infrastructure does not exercise effective ownership rights or derive economic benefits, the entity entrusted with its management and exploitation is regarded as replacing the owner for the purposes of assessing the existence of an advantage. In the present case, that role is performed by the OAKA Operator.”
“(147-148) Consequently, even though the restoration and modernisation works financed under the measure will enhance the physical and residual value of the Stadium, this improvement does not translate into a financial or economic benefit for the HOC. … The measure does therefore not confer any advantage on the HOC within the meaning of Article 107(1) TFEU.”
4. Operational level
“(149) A potential advantage may arise for the OAKA Operator, which is entrusted by law with the management, operation and exploitation of the Stadium … In the present case, the assessment at the operational level requires a distinction between (i) the limited preparatory and urgent safety-related works already carried out and (ii) the main restoration and energy-upgrading project forming the core of the notified measure.”
“(151) As regards the preparatory and urgent safety-related works amounting to approximately EUR 5.8 million, the Commission notes that those measures were strictly limited to mitigating immediate safety risks identified following the suspension of the Stadium’s activities and to enabling its provisional reopening. Those interventions were temporary and precautionary in nature and did not entail any structural, functional or commercial upgrading of the infrastructure. In particular, they did not increase the Stadium’s capacity, quality, energy performance or long-term profitability, nor did they extend its economic life beyond what was necessary to ensure compliance with minimum safety requirements.”
“(152) The Commission further notes that those urgent safety-related measures correspond to obligations linked to public safety and risk prevention and cannot be equated with capital investments undertaken for the purpose of economic exploitation. However, the fact that such measures are linked to public safety objectives does not, as such, preclude the existence of an advantage where the works are necessary to enable the reopening and continued operation of an infrastructure used for economic activities. The fact that those urgent safety related measures were implemented as a separate workstream in the context of the same notified measure does not affect this conclusion, as the assessment under Article 107(1) TFEU must be based on the concrete effects of each public expenditure on the economic position of the beneficiary.”
“(153) In the present case, the urgent safety-related works were a necessary precondition for the reopening and continued use of the Stadium for economic activities. The financing of works which are necessary for the reopening and continued operation of an infrastructure used for economic activities relieves the OAKA Operator of costs that it would normally have to bear in order to carry out that activity. In those circumstances, the public financing of the urgent safety-related works conferred an economic advantage within the meaning of Article 107(1) TFEU. The fact that those urgent safety-related measures were implemented as a separate workstream in the context of the same notified measure does not affect this conclusion. On the contrary, given their distinct scope and objective, they must be assessed separately from the other components of the notified measure. The assessment under Article 107(1) TFEU must therefore be based on the concrete effects of this specific public expenditure on the economic position of the beneficiary, independently of the legal or factual links with the remaining parts of the measure.”
“(154) By contrast, the public funding of the main restoration and energy-upgrading project relieves the OAKA Operator of substantial capital expenditure that it would otherwise have had to bear in order to ensure the long-term preservation, structural adequacy and economic usability of the Stadium. Moreover, the restoration and energy-upgrading project enhances the overall quality and attractiveness of the Stadium as a venue for sporting and cultural events … As a result, the OAKA Operator may, in principle, benefit from improved operational conditions, including potential increases in demand and higher revenues from rental or usage fees, while not having borne the cost of the underlying investment.”
At this point, the Commission noted that the public financing of the project did not comply with the Market Economy Operator Principle. This is because the funding was in the form of a non-repayable grant.
Therefore, the Commission considered that “(157) the public funding granted both for the preparatory and urgent safety-related works and for the main restoration and modernisation works of the Main Olympic Stadium confers an economic advantage on the OAKA Operator within the meaning of Article 107(1) TFEU.”
5. User level
“(159) First, it has to be noted that the Stadium is … not dedicated to a single user or category of users, and access remains open on a rotational, non-exclusive user or category of users, and access remains open on a rotational, non-exclusive basis”.
“(160) Second, the conditions governing the use of the Stadium, including access procedures and rental fees, are determined by a binding legal and administrative framework. These instruments lay down objective, transparent and standardised procedures for leasing any OAKA facility, including the Stadium”.
“(163) Third, the OAKA Operator is not authorised to grant discounts, exemptions or preferential treatment to any user.”
“(164) The Commission notes that, where publicly financed infrastructure is made available to multiple users on equal and non-discriminatory terms at market-based rates, no economic advantage can be identified at the level of the users. In the present case, … the access and pricing mechanisms applicable to the Stadium ensure that the use of the facility remains open, transparent and based on valuations reflecting market conditions.”
“(166) The Commission therefore concludes that the measure does not confer any advantage within the meaning of Article 107(1) TFEU at the level of the users of the Stadium.”
The overall conclusion of the Commission was that only OAKA obtained an advantage in the meaning of Article 107(1) TFEU.
The measure also satisfied the other criteria of Article 107(1): It was selective, involved state resources, was attributed to a decision of the state, and was likely to affect trade and distort competition.
Lawfulness of the aid measure
Since the measure had been notified to the Commission before its implementation, the Commission considered it to be lawful. However, the funding of the emergency measures was granted without any prior notification to the Commission.
With respect to the funding of the emergency measures the Commission noted that, “(207) following the suspension of all activities at the Stadium for safety reasons, certain urgent measures were implemented to mitigate the risks identified and to ensure public safety … These measures included the award of contracts for technical inspection services, the preparation for the removal of the polycarbonate panels, and the removal of the panels themselves, which enabled the provisional reopening of the facility … the preparatory and urgent safety-related works, including the related technical inspections and provisional interventions carried out prior to the main investment phase, conferred an economic advantage on the OAKA Operator and therefore constitute State aid within the meaning of Article 107(1) TFEU. Since those measures were implemented and public funds were disbursed prior to their notification to and approval by the Commission, they were put into effect in breach of the standstill obligation laid down in Article 108(3) TFEU and therefore constitute unlawful aid within the meaning of Article 1(f) of Regulation (EU) 2015/1589. The assessment of their compatibility with the internal market is carried out below together with the compatibility assessment of the main works.”
Assessment of compatibility with the internal market
The measure was assessed on the basis of Article 107(3)(c) TFEU. The Commission found that the measure conformed with both the positive and negative condition of Article 107(3)(c) TFEU.
With respect to the incentive effect, the Commission accepted that in the absence of public funding, OAKA would not have been able to carry out the project, given the 100% funding gap. Its annual budget covered only operational and maintenance expenses. Its annual revenue was not sufficient to offset the initial investment costs.
“(232) As regards the preparatory and urgent safety-related works already implemented in late 2023 and early 2024 following the structural assessment and temporary closure of the Stadium … and therefore before the notification of the measure to the Commission, the Commission notes that these urgent works form part of the same integrated investment project formally included in the NRRP framework by the Inclusion Act. Their implementation prior to notification was dictated by the exceptional urgency arising from the identified safety risks and by the necessity to adopt immediate measures in order to mitigate those risks and enable the provisional reopening of the Stadium. Those interventions were not financed through a separate emergency funding scheme but were implemented within the financial envelope and budgetary framework established by the Inclusion Act and reflected in the approved Project Fiche.”
“(233) In those circumstances, the Commission assesses the incentive effect by examining whether, at the time the decision to implement the integrated investment project was taken within the framework established by the Inclusion Act, the availability of RRF and national financing influenced that decision, rather than by reference to the later notification date. The FGA … demonstrates that the OAKA Operator did not possess sufficient own resources to finance either the comprehensive restoration works or the preparatory safety-related interventions. In the absence of the public financing secured under the Inclusion Act, the beneficiary would therefore not have had the financial capacity to undertake even those urgent measures.”
“(234) In that context, the availability of RRF and national funding constituted a necessary and decisive condition for the implementation of the integrated investment project, including both the urgent interventions and the subsequent comprehensive restoration works.”
With respect to the proportionality of the aid, the Commission considered that since the aid did not exceed the funding gap, it was the minimum necessary for the execution of the project.
“(276) In the present case, the FGA shows a negative present value of net revenues, implying that none of the project’s costs are recoverable through its operation … Consequently, the eligible public funding equals 100% of the investment cost, including the non-recoverable part of VAT (24%). This reflects the absence of any commercially exploitable revenue stream capable of contributing to the financing of the investment. The aid intensity thus corresponds precisely to the funding gap, is limited to the net additional cost borne by the public authorities and ensures that the beneficiary receives no overcompensation.”
“(279) In addition to the investment costs, the measure also covers limited technical assistance, project-management and consultancy expenses carried out by the PPF acting on behalf of the OAKA Operator. … the PPF’s remuneration is capped at 0.5 % of the total project budget and restricted to the actual administrative costs incurred, ensuring that no profit is generated and that public support remains confined to the minimum necessary”.
Since the Commission also did not identify any undue negative effects or any manifestly negative effects, it approved the measure.
