Europäisches Beihilfenrecht Blog

State Aid Uncovered Blog

In Lexxions Blog „State Aid Uncovered” veröffentlicht Prof. Phedon Nicolaides wöchentlich kritische Analysen zu den neuesten Urteilen und Entscheidungen zu staatlichen Beihilfen. Jeder Beitrag stellt die wichtigsten Punkte eines Gerichtsurteils oder einer EU-Kommissionsentscheidung vor, ordnet sie in den Kontext ähnlicher Rechtsprechung oder Praxis ein, bewertet die zugrundeliegende Argumentation und zeigt etwaige Ungereimtheiten oder Widersprüche auf.

In loser Folge werden auf diesem Blog auch Gastbeiträge von anderen Experten für staatliche Beihilfen veröffentlicht, welche die Inhalte der Blogbeiträge ergänzen.

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Professor at Maastricht University; Professor at University of Nicosia, and Academic Director at Lexxion Training

- incentive effect ×

Agricultural Insurance and Incentive Effect

Executive Summary: When faced with a recurring harmful event, undertakings should take out insurance before they can claim compensation for damage they have suffered.  The availability of compensation should not disincentivise undertakings from reducing their exposure to harmful events.     Table of Contents: Introduction  Background  Frequent events and availability of insurance   Unavailability of insurance for certain types of production  Uniform application of a regulation  […]

The Absolute Importance of the Incentive Effect of State Aid

Executive Summary: The aid application must be submitted before the start of works. Where required, the incentive effect of the aid on the basis of a credible counterfactual scenario must be demonstrated when the application for aid is submitted. It is very difficult to prove ex post the incentive effect of aid. Errors by the granting authorities do not relieve […]

A State Aid Measure that Lacks Incentive Effect, Causes Excessive Distortion and Confers a Disproportional Advantage – Part II

Executive Summary: The decision to provide funding may not be attributed to a Member State only when it is mandated by the EU, not when EU law allows Member States to decide whether to provide funding.  Relief from the cost of compliance with regulatory requirements confers an advantage in the meaning of Article 107(1) TFEU.  The state may amend technical […]

A State Aid Measure that Lacks Incentive Effect, Causes Excessive Distortion and Confers a Disproportional Advantage – Part I

Executive Summary: The decision to provide funding may not be attributed to a Member State only when it is mandated by the EU, not when EU law allows Member States to decide whether to provide funding. Relief from the cost of compliance with regulatory requirements confers an advantage in the meaning of Article 107(1) TFEU. The state may amend technical […]

Start of Works

Introduction Before any state aid granted, the granting authority must establish at a bare minimum that the application satisfies the formal incentive effect: that the project has not already started. The start of works is normally signified by the start of construction or the order of equipment or any other decision that indicates the commitment of the aid applicant to […]

Extra Aid to a Project that Has Already Started

Introduction State aid is not supposed to be granted to a project after work has already started because it lacks incentive effect. But when the project incurs unexpected costs, it is socially important so that it cannot be abandoned and without the aid it becomes commercially unviable, then the Commission may authorise additional aid. In March 2022, the Commission approved […]

Commission Approves State Aid after a Project Has Started

Introduction A fundamental rule of State aid is that no aid may be granted after a project has already started. This rule is repeated in every Commission regulation or set of guidelines. Aid to a project that has already started lacks incentive effect and as such it is a pure waste of public money. However, in December 2022, the Court […]

Compensation for Switching to a New Broadcasting Frequency

Introduction Normally the cost of compliance with mandatory regulations may not be offset, partially or fully, by State aid because it lacks incentive effect. The beneficiaries would have to incur those costs anyway. However, even in the case of mandatory compliance, State aid may still have an incentive effect if the undertakings concerned would cease altogether the activity in question. […]

Authorisation of State Aid after the Start of a Project

Introduction In June 2021, the European Commission, in decision SA.55526, approved an amount of EUR 167 million of State aid for the construction and operation of a liquefied natural gas [LNG] terminal close to Alexandroupolis in northern Greece. In December 2022, Greece notified a measure involving additional State aid of EUR 106 million for the same project. The Commission authorised […]

Restructuring State Aid

Introduction State aid to failing undertakings is the most distortionary form of public subsidies. They prevent the market exit of inefficient companies. For this reason, State aid for rescue or restructuring of undertakings in difficulty must always be notified to the Commission which examines each case very carefully and allows this kind of aid only when, among other things, the […]

- incentive effect ×

Agricultural Insurance and Incentive Effect

Executive Summary: When faced with a recurring harmful event, undertakings should take out insurance before they can claim compensation for damage they have suffered.  The availability of compensation should not disincentivise undertakings from reducing their exposure to harmful events.     Table of Contents: Introduction  Background  Frequent events and availability of insurance   Unavailability of insurance for certain types of production  Uniform application of a regulation  […]

The Absolute Importance of the Incentive Effect of State Aid

Executive Summary: The aid application must be submitted before the start of works. Where required, the incentive effect of the aid on the basis of a credible counterfactual scenario must be demonstrated when the application for aid is submitted. It is very difficult to prove ex post the incentive effect of aid. Errors by the granting authorities do not relieve […]

A State Aid Measure that Lacks Incentive Effect, Causes Excessive Distortion and Confers a Disproportional Advantage – Part II

Executive Summary: The decision to provide funding may not be attributed to a Member State only when it is mandated by the EU, not when EU law allows Member States to decide whether to provide funding.  Relief from the cost of compliance with regulatory requirements confers an advantage in the meaning of Article 107(1) TFEU.  The state may amend technical […]

A State Aid Measure that Lacks Incentive Effect, Causes Excessive Distortion and Confers a Disproportional Advantage – Part I

Executive Summary: The decision to provide funding may not be attributed to a Member State only when it is mandated by the EU, not when EU law allows Member States to decide whether to provide funding. Relief from the cost of compliance with regulatory requirements confers an advantage in the meaning of Article 107(1) TFEU. The state may amend technical […]

Start of Works

Introduction Before any state aid granted, the granting authority must establish at a bare minimum that the application satisfies the formal incentive effect: that the project has not already started. The start of works is normally signified by the start of construction or the order of equipment or any other decision that indicates the commitment of the aid applicant to […]

Extra Aid to a Project that Has Already Started

Introduction State aid is not supposed to be granted to a project after work has already started because it lacks incentive effect. But when the project incurs unexpected costs, it is socially important so that it cannot be abandoned and without the aid it becomes commercially unviable, then the Commission may authorise additional aid. In March 2022, the Commission approved […]

Commission Approves State Aid after a Project Has Started

Introduction A fundamental rule of State aid is that no aid may be granted after a project has already started. This rule is repeated in every Commission regulation or set of guidelines. Aid to a project that has already started lacks incentive effect and as such it is a pure waste of public money. However, in December 2022, the Court […]

Compensation for Switching to a New Broadcasting Frequency

Introduction Normally the cost of compliance with mandatory regulations may not be offset, partially or fully, by State aid because it lacks incentive effect. The beneficiaries would have to incur those costs anyway. However, even in the case of mandatory compliance, State aid may still have an incentive effect if the undertakings concerned would cease altogether the activity in question. […]

Authorisation of State Aid after the Start of a Project

Introduction In June 2021, the European Commission, in decision SA.55526, approved an amount of EUR 167 million of State aid for the construction and operation of a liquefied natural gas [LNG] terminal close to Alexandroupolis in northern Greece. In December 2022, Greece notified a measure involving additional State aid of EUR 106 million for the same project. The Commission authorised […]

Restructuring State Aid

Introduction State aid to failing undertakings is the most distortionary form of public subsidies. They prevent the market exit of inefficient companies. For this reason, State aid for rescue or restructuring of undertakings in difficulty must always be notified to the Commission which examines each case very carefully and allows this kind of aid only when, among other things, the […]

- incentive effect ×

Agricultural Insurance and Incentive Effect

Executive Summary: When faced with a recurring harmful event, undertakings should take out insurance before they can claim compensation for damage they have suffered.  The availability of compensation should not disincentivise undertakings from reducing their exposure to harmful events.     Table of Contents: Introduction  Background  Frequent events and availability of insurance   Unavailability of insurance for certain types of production  Uniform application of a regulation  […]

The Absolute Importance of the Incentive Effect of State Aid

Executive Summary: The aid application must be submitted before the start of works. Where required, the incentive effect of the aid on the basis of a credible counterfactual scenario must be demonstrated when the application for aid is submitted. It is very difficult to prove ex post the incentive effect of aid. Errors by the granting authorities do not relieve […]

A State Aid Measure that Lacks Incentive Effect, Causes Excessive Distortion and Confers a Disproportional Advantage – Part II

Executive Summary: The decision to provide funding may not be attributed to a Member State only when it is mandated by the EU, not when EU law allows Member States to decide whether to provide funding.  Relief from the cost of compliance with regulatory requirements confers an advantage in the meaning of Article 107(1) TFEU.  The state may amend technical […]

A State Aid Measure that Lacks Incentive Effect, Causes Excessive Distortion and Confers a Disproportional Advantage – Part I

Executive Summary: The decision to provide funding may not be attributed to a Member State only when it is mandated by the EU, not when EU law allows Member States to decide whether to provide funding. Relief from the cost of compliance with regulatory requirements confers an advantage in the meaning of Article 107(1) TFEU. The state may amend technical […]

Start of Works

Introduction Before any state aid granted, the granting authority must establish at a bare minimum that the application satisfies the formal incentive effect: that the project has not already started. The start of works is normally signified by the start of construction or the order of equipment or any other decision that indicates the commitment of the aid applicant to […]

Extra Aid to a Project that Has Already Started

Introduction State aid is not supposed to be granted to a project after work has already started because it lacks incentive effect. But when the project incurs unexpected costs, it is socially important so that it cannot be abandoned and without the aid it becomes commercially unviable, then the Commission may authorise additional aid. In March 2022, the Commission approved […]

Commission Approves State Aid after a Project Has Started

Introduction A fundamental rule of State aid is that no aid may be granted after a project has already started. This rule is repeated in every Commission regulation or set of guidelines. Aid to a project that has already started lacks incentive effect and as such it is a pure waste of public money. However, in December 2022, the Court […]

Compensation for Switching to a New Broadcasting Frequency

Introduction Normally the cost of compliance with mandatory regulations may not be offset, partially or fully, by State aid because it lacks incentive effect. The beneficiaries would have to incur those costs anyway. However, even in the case of mandatory compliance, State aid may still have an incentive effect if the undertakings concerned would cease altogether the activity in question. […]

Authorisation of State Aid after the Start of a Project

Introduction In June 2021, the European Commission, in decision SA.55526, approved an amount of EUR 167 million of State aid for the construction and operation of a liquefied natural gas [LNG] terminal close to Alexandroupolis in northern Greece. In December 2022, Greece notified a measure involving additional State aid of EUR 106 million for the same project. The Commission authorised […]

Restructuring State Aid

Introduction State aid to failing undertakings is the most distortionary form of public subsidies. They prevent the market exit of inefficient companies. For this reason, State aid for rescue or restructuring of undertakings in difficulty must always be notified to the Commission which examines each case very carefully and allows this kind of aid only when, among other things, the […]

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