Europäisches Beihilfenrecht Blog

State Aid Uncovered Blog/Guest State Aid Blog

On a weekly basis Phedon Nicolaides posts critical analysis pieces on the latest State aid judgments and decisions on his blog State Aid Uncovered. Each article presents the main points of a court ruling or Commission‘s decision, places them in the context of similar case law or practice, assesses the underlying reasoning, and identifies any inconsistencies or contradictions.
Occasional guest blog posts by other State aid experts complement the State aid knowledge hub.

Join the debate now!

- state aid ×

Non-recovery of Incompatible State aid Is Costly

corona virus poster
Legal and practical difficulties in the recovery of incompatible State aid do not constitute justifiable “absolute impossibility”. Temporary Framework On 1 May, the total number of State aid measures to combat covid-19 approved by the European Commission reached 102. Their legal basis was: Article 107(2)(b): 9; Article 107(3)(b): 86; Article 107(3)(c): 7   Introduction The 2020 Temporary Framework for State […]

Identification of Undertakings in Difficulty

corona virus poster
A company is in difficulty if, in practice, its accumulated net losses exceed 50% of its subscribed capital, regardless of whether the subscribed capital is formally written down. The classification of a company as being in difficulty is independent of the sector in which it operates and of whether a private investor would be willing to invest in it. Temporary […]

Follow Up Webinar with Phedon Nicolaides on ‚COVID-19 and State Aid Law‘ on 20 April

Woman sitting by the computer
The European Commission is working on quickly adapting the existing State aid legal framework to address the current Covid-19 pandemic. Join us on 20th April from the comfort and safety of your (home) office to get an insider update on the Covid-19 response by State aid experts from the European Commission and national governments. ✓ Join from wherever you are – […]

5 Most Read Articles on StateAidUncovered in 2019

Groundbreaking judgments like “Eesti Pagar”, applications of the private investor principle in air transport or questions of interpretation of the GBER besides many more, have moved and shaped this year’s judgments on State aid. Also Brexit and its meaning for State aid control in the UK has still been on everyone’s mind. See which articles by Prof. Phedon Nicolaides were […]

Retroactive Application of the GBER

When an aid scheme is adjusted by limiting the eligible beneficiaries, it becomes “new” aid and must be notified to the Commission. The GBER can be applied retroactively to aid that was granted before it came into force.   Introduction In July 2016, Dilly’s Wellnesshotel wrote legal history for being the first undertaking to contest the application of the General […]

How Can Incompatible State Aid Be Passed-on from one Company to another to Avoid Recovery?

Introduction State aid that is incompatible with the internal market has to be paid back, unless the repayment would be contrary to a general principle of EU law. Last November the Court of Justice ruled in case C‑622/16 P, Scuola Elementare Maria Montessori v European Commission that “(79) the principle that ‘no one is obliged to do the impossible’ is among the […]

Top 5 State Aid Uncovered Posts in 2017

Questions around grants for R&D&I projects, economic activities of religious establishments or concession agreements besides many more, have moved and shaped this year’s judgments on State aid. Also Brexit and its meaning for State aid control in the UK has been on everyone’s mind. See which articles by Prof. Phedon Nicolaides were the most popular ones in 2017. We have […]

15th Jubilee Feature – State Aid Experts Paying Court to EStAL: Alexander Rose

estal alexander rose
Since 2002 Lexxion Publisher’s European State Aid Law Quarterly – EStAL serves as a forum for dialogue and deliberation on all issues related to State aid. On the occasion of our 15th anniversary special feature we have gathered our State aid family to reflect upon their joint journey together with our precious EStAL and of course our favourite topic State […]

15th Jubilee Feature – State Aid Experts Paying Court to EStAL: Mihalis Kekelekis

EStAL Mihalis Kekelekis
Since 2002 Lexxion Publisher’s European State Aid Law Quarterly – EStAL serves as a forum for dialogue and deliberation on all issues related to State aid. On the occasion of our 15th anniversary special feature we have gathered our State aid family to reflect upon their joint journey together with our precious EStAL and of course our favourite topic State […]

15th Jubilee Feature – State Aid Experts Paying Court to EStAL: Birgit Haslinger

estal Birgit Haslinger
Since 2002 Lexxion Publisher’s European State Aid Law Quarterly – EStAL serves as a forum for dialogue and deliberation on all issues related to State aid. On the occasion of our 15th anniversary special feature we have gathered our State aid family to reflect upon their joint journey together with our precious EStAL and of course our favourite topic State […]

A Postscript on Brexit and State Aid

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 […]

State Aid is on the Agenda: Deal or No Deal

brexit
With great pleasure we welcome again Professor Erika Szyszczak to our blog. Erika is a Research Professor in Law and a Fellow of the UK Trade Policy Observatory. She is currently the Special Adviser to the House of Lords Internal Market Sub-Committee in respect of its inquiry into Brexit: competition. She is the author of The Regulation of the State […]

Public Service Obligations and Award for Damages

public bus
Providers of public services must keep separate accounts. The parameters for calculating the compensation for the extra costs of public services must be determined in advance. Awards for damages do not constitute State aid. However, no damages can be awarded as a substitute for incompatible State aid.   Introduction It is often asked how compensation measures for public service obligations […]

New Video: How to notify State aid?

youtube screenshot
What is State aid? Why do I need to be concerned about State aid? These and many more basic questions are answered in our videos on YouTube. Make sure to visit us!   Today one of our speakers and Attaché for State aid of the Hungarian central administration, Peter Staviczky explains how you notify State aid to the European Commission. Find out how to […]

State Aid Goes YouTube: Visit Phedon Nicolaides on our YouTube Channel

lexxion logo and eu flags
What is State aid? Why do I need to be concerned about State aid? What is General Block Exemption Regulation (GBER) and how to use it? These and many more basic questions will be answered in our videos on YouTube. Make sure to visit us!   With great pleasure we announce the beginning of a new era of e-learning about […]

Luxembourg, Amazon, and the State aid connection

amazon package
The Commission’s opening decision: What should we make of Amazon’s ‘advance pricing agreement’ (APA) and its alleged (non-) compliance with the ‘arm’s length principle’ (ALP)? In early October 2014, the European Commission notified Luxembourg of its decision to open a state aid investigation in relation to the tax treatment of the Amazon group by the Luxembourgish tax authorities. This opening […]

Simultaneity of Investments by Public and Private Investors is a Necessary but not Sufficient Condition for Public Investments to be Free of State Aid

coins
If a public authority guarantees a loan to a company that is in financial difficulty and charges a low premium, the whole loan, not just the difference between the market rate of premium and the rate actually charged, will be considered to be State aid. Simultaneous capital injection by public and private investors is not enough to eliminate State aid […]

SMEs Linked through Natural Persons

corporate building
Two or more enterprises may constitute a single undertaking when their owners and/or managers are related in a way that they can act jointly to exercise influence over the decision of those enterprises. Introduction   On 27 February 2014, the Court of Justice rendered a judgment on the notion of “linked enterprises” following a request for preliminary ruling from a […]

The New Guidelines on State Aid to Airports and Airlines: Problematic Issues (part 2)

man looking airplane takeoff
Introduction Last week I reviewed the main provisions of the new Guidelines on State Aid to Airports and Airlines. This week I focus on three issues which are either not well explained or too ambiguous, leaving too much room for creative interpretation. [1] Investment funding gap The new Guidelines, like the other new rules, stress that aid must have an incentive […]

The New Guidelines on State Aid to Airports and Airlines (part 1)

man looking airplane takeoff
Introduction[1] One more set of State aid rules for 2014-20 has been adopted. On Thursday, 20 February 2014, the Commission published its Guidelines on State Aid to Airports and Airlines.[2] The other main substantive rules which are already in place are the following, in chronological order:[3] The package on services of general economic interest (SGEI): A Communication, a Decision (like a […]

The Role of National Courts in Recovery of Incompatible State Aid

court house
Introduction In December I examined the judgment in the case of Lufthansa v Frankfurt-Hahn, which laid down certain obligations for national courts whenever they are petitioned to suspend and even recover aid that happens to be at the same time under investigation by the Commission. In this article I review the judgment of the Court of Justice of 13 February […]

An Assessment of the State Aid Consistency of Financial Instruments Supported by Structural and Investment Funds (Regulation 1303/2013)

coins on the table
Introduction Last week I reviewed the new State aid guidelines on risk finance. This week I will examine the provisions on financial instruments in the new structural and investment funds regulation. The regulation was published in the Official Journal just before Christmas. Both sets of rules have been updated on the basis of similar principles. The primary aim of both […]

Guidelines on State Aid to Promote Risk Finance Investments

financial graph
Introduction   On 15 January the Commission adopted the fourth set of guidelines for the programming period 2014-2020 [the first three were those on broadband, SGEI, and regional aid]. The latest guidelines replaced those on risk capital for SMEs. What is immediately noticeable from the title of the new guidelines is that they are not confined only to funding in […]

Services of General Economic Interest and Horse Racing

horse racing
Introduction Public authorities often argue that the activities they support are important and that they should be considered as services of general economic interest. However, in many cases they are not. In this article I review the Commission Decision 2014/19 concerning a parafiscal levy that was intended to fund supposedly public service obligations assigned to French horse racing companies.[1] This Decision […]

The Possibly Conflicting Roles of EU Institutions on State Aid

EU flag
Introduction On 10 December 2013, the Court of Justice, in C‑272/12 P, wrote another chapter in the long-running case of the exemption from excise taxes for alumina producers in France, Ireland and Italy. This is not the last chapter. The Court annulled a judgment of the General Court and referred the case back to the General Court. In fact this […]

The Non-Equivalence of the Various Methods of Supporting Green Electricity

electrical sockets
Introduction Ever since the judgment of the Court of Justice in 2001 on PreussenElektra [case C-379/98], Member States have been grappling with the question of how to support electricity from renewable resources [green electricity] without granting State aid. In PreussenElektra the Court found that there was no transfer of state resources and no State aid, because the German government imposed […]

The New Rules on De minimis Aid for 2014-2020: Regulation 1407/2013

EU comission
Introduction[1] It is appropriate to start this year’s articles on State aid with an appraisal of one of the most important new legislative items for the period 2014-2020: the new de minimis rules. The European Commission adopted the new de minimis Regulation in mid-December and the formal text was published just before Christmas in the Official Journal of 24 December […]

Economically Rational Environmental Aid

water processing plant
Introduction A few months ago I wrote an article on this blog explaining the big puzzle of environmental State aid. Since the rules allow State aid which is only a proportion of the extra costs incurred by companies investing in environmentally friendly technology, it is puzzling why they make this investment. After all, they have the option of not incurring […]

Non-notified State Aid and the Role of National Courts C 284/12, Deutsche Lufthansa v Flughafen Frankfurt-Hahn

airplane on the runway
Introduction What prevents a Member State from granting State aid without first notifying it to the European Commission? Cynics would answer “nothing, in fact”. Indeed, nothing can stop a country that is determined to provide a subsidy. But after the judgment in case Lufthansa v Frankfurt Hahn Airport, the answer must be “unnecessary hassle”. Even if there is a slight […]

The Private Investor Principle Applied to Loans [Commission Decision 2013/528]

ship in the shipyard
Introduction The State aid issue in this case is relatively straightforward. Nauta, a Polish shipyard, received a two-year loan from IDA, the state-owned Polish Investment Agency. Because Nauta ran into some financial trouble, the loan was extended for another two years. In Decision 2013/528, the Commission had to examine two questions: First, did the initial loan market conform? Second, if […]

Private Vendor Principle: How to Organise a State-Aid-Free Sale of Public Assets

bank building
Introduction   The private investor principle (PIP) or market economy investor principle is well established in the case law. A closely related concept is the private vendor principle (PVP). The PIP applies when a public authority assumes risk by investing in an undertaking, for example through the purchase of shares, injection of capital, granting of a loan or provision of […]

A Public Authority Can Behave Like a Private Investor even when the Beneficiary Has Little Prospect of Future Profitability

airplane flying
Introduction When a public authority invests in an undertaking, it must earn a return at market rates, otherwise the investment is State aid. Normally, it is much easier to prove that the investment has a reasonable prospect of profitability and, therefore, that it would be made by a private investor, when the recipient undertaking is in a good financial situation. […]

A Case of Public Funding of Infrastructure that Does not Constitute State Aid: But Many Questions Remain

fortress
Introduction After the landmark judgment in Leipzig-Halle, public authorities are justifiably careful to ensure that the infrastructure they fund is either free of State aid or, if that is unavoidable, that the State aid is compatible with the internal market. Recent cases have shown that there are two problems in this regard. First, public authorities must verify whether the organisations […]

The Offsetting of a Structural Disadvantage Is still State Aid

scale and a book
Introduction Normally it is conceptually and technically fairly easy to determine whether an undertaking benefits from a public measure. However, this task becomes considerably more difficult in two situations: i) when a public authority claims that it acts like a private investor and ii) when a public measure is intended to compensate for a disadvantage suffered by the beneficiary undertaking […]

Privatisation of Aeroportos de Portugal: Conflict between the National Economic Adjustment Programme and State Aid Rules?

people at the airport
Background Portugal notified to the Commission the privatisation of the “Aeroportos de Portugal” [ANA] for reasons of legal certainty [SA.36197].[1] ANA is the operator of most Portuguese airports. It manages eight airports across Portugal (Lisbon, Porto, Faro, Beja, and 4 airports in the Azores) that account for the vast majority of the commercial air traffic in the country. It is worth […]

Public Support without State Aid

tablet with chart tabelle
Public measures that do not constitute state aid are as interesting as the measures that do provide aid. This posting examines two measures that have been found not to fall within the scope of Article 107(1) TFEU because they do not satisfy one or more of the four criteria laid down in that Article. Non-economic activity: Commission Decision SA.35529 on […]

PuState Resources and Payments between Undertakings

euro coins
Introduction A couple of years ago, the big issue in State aid law was the concept of selectivity. The judgments in the British Aggregates and Dutch NOx cases expanded, elaborated, and, some argued, convoluted the criteria for determining whether a measure was selective or not. This year, the big issue for sure is the concept of State resources. First came […]

Fiscal Leveraging: Donations and State Aid for Culture and Sports

runners on the track
Introduction In this blog I examine primarily a Dutch measure that supports cultural institutions by providing tax incentives to individuals and corporations to make donations to those institutions. This is an unusual construction because the direct beneficiaries are different from the indirect beneficiaries which, however, are the main targets of the measure. This construction has been used rather extensively in […]

Ex Post Evaluation of State Aid: A New Instrument

evaluation smileys
Introduction: The need for evaluation The State Aid Modernisation that was launched by the European Commission in May 2012 aims primarily to channel State aid to remedying genuine market failure. Subsequent policy documents have all been based on this underlying aim: to ensure that State aid is truly needed and effective in addressing market failure. The need and effectiveness of […]

Sale of State-owned Airlines [Commission Decision SA.33337 on sale of subsidiaries by LOT Polish Airlines]

airplane on the runway
Introduction In the previous posting I examined the funding of a regional airport. In this posting I look at a case concerning an airline; more specifically, the sale of three subsidiaries of Polish airline LOT.[1] During the past five or so years, the Commission has had to deal with many measures involving different kinds of public support to airlines [e.g. Alitalia, […]

The Market Economy Vendor Principle: Sale of Public Land by the Dutch Municipality of Leidschendam-Voorburg [Commission Decision SA.24123]

Cadastre
The previous posting examined a case where the European Commission applied the Market Economy Investor Principle [MEIP]. This is the principle that is used to determine whether there is state aid in commercial transactions between public authorities and undertakings. According to Article 345 of the Treaty on the Functioning of the European Union [TFEU], the European Union is neutral with […]

Blog Intro

pen and paper
State Aid Uncovered State aid law and policy evolve all the time. The basic rules are fairly stable but their interpretation and application are frequently adjusted to take into account changes in market conditions, novel forms of cooperation between public authorities and companies and ever more complex funding instruments and arrangements. This blog tracks the evolution of state aid law […]

- state aid ×

Non-recovery of Incompatible State aid Is Costly

corona virus poster
Legal and practical difficulties in the recovery of incompatible State aid do not constitute justifiable “absolute impossibility”. Temporary Framework On 1 May, the total number of State aid measures to combat covid-19 approved by the European Commission reached 102. Their legal basis was: Article 107(2)(b): 9; Article 107(3)(b): 86; Article 107(3)(c): 7   Introduction The 2020 Temporary Framework for State […]

Identification of Undertakings in Difficulty

corona virus poster
A company is in difficulty if, in practice, its accumulated net losses exceed 50% of its subscribed capital, regardless of whether the subscribed capital is formally written down. The classification of a company as being in difficulty is independent of the sector in which it operates and of whether a private investor would be willing to invest in it. Temporary […]

Follow Up Webinar with Phedon Nicolaides on ‚COVID-19 and State Aid Law‘ on 20 April

Woman sitting by the computer
The European Commission is working on quickly adapting the existing State aid legal framework to address the current Covid-19 pandemic. Join us on 20th April from the comfort and safety of your (home) office to get an insider update on the Covid-19 response by State aid experts from the European Commission and national governments. ✓ Join from wherever you are – […]

5 Most Read Articles on StateAidUncovered in 2019

Groundbreaking judgments like “Eesti Pagar”, applications of the private investor principle in air transport or questions of interpretation of the GBER besides many more, have moved and shaped this year’s judgments on State aid. Also Brexit and its meaning for State aid control in the UK has still been on everyone’s mind. See which articles by Prof. Phedon Nicolaides were […]

Retroactive Application of the GBER

When an aid scheme is adjusted by limiting the eligible beneficiaries, it becomes “new” aid and must be notified to the Commission. The GBER can be applied retroactively to aid that was granted before it came into force.   Introduction In July 2016, Dilly’s Wellnesshotel wrote legal history for being the first undertaking to contest the application of the General […]

How Can Incompatible State Aid Be Passed-on from one Company to another to Avoid Recovery?

Introduction State aid that is incompatible with the internal market has to be paid back, unless the repayment would be contrary to a general principle of EU law. Last November the Court of Justice ruled in case C‑622/16 P, Scuola Elementare Maria Montessori v European Commission that “(79) the principle that ‘no one is obliged to do the impossible’ is among the […]

Top 5 State Aid Uncovered Posts in 2017

Questions around grants for R&D&I projects, economic activities of religious establishments or concession agreements besides many more, have moved and shaped this year’s judgments on State aid. Also Brexit and its meaning for State aid control in the UK has been on everyone’s mind. See which articles by Prof. Phedon Nicolaides were the most popular ones in 2017. We have […]

15th Jubilee Feature – State Aid Experts Paying Court to EStAL: Alexander Rose

estal alexander rose
Since 2002 Lexxion Publisher’s European State Aid Law Quarterly – EStAL serves as a forum for dialogue and deliberation on all issues related to State aid. On the occasion of our 15th anniversary special feature we have gathered our State aid family to reflect upon their joint journey together with our precious EStAL and of course our favourite topic State […]

15th Jubilee Feature – State Aid Experts Paying Court to EStAL: Mihalis Kekelekis

EStAL Mihalis Kekelekis
Since 2002 Lexxion Publisher’s European State Aid Law Quarterly – EStAL serves as a forum for dialogue and deliberation on all issues related to State aid. On the occasion of our 15th anniversary special feature we have gathered our State aid family to reflect upon their joint journey together with our precious EStAL and of course our favourite topic State […]

15th Jubilee Feature – State Aid Experts Paying Court to EStAL: Birgit Haslinger

estal Birgit Haslinger
Since 2002 Lexxion Publisher’s European State Aid Law Quarterly – EStAL serves as a forum for dialogue and deliberation on all issues related to State aid. On the occasion of our 15th anniversary special feature we have gathered our State aid family to reflect upon their joint journey together with our precious EStAL and of course our favourite topic State […]

A Postscript on Brexit and State Aid

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 […]

State Aid is on the Agenda: Deal or No Deal

brexit
With great pleasure we welcome again Professor Erika Szyszczak to our blog. Erika is a Research Professor in Law and a Fellow of the UK Trade Policy Observatory. She is currently the Special Adviser to the House of Lords Internal Market Sub-Committee in respect of its inquiry into Brexit: competition. She is the author of The Regulation of the State […]

Public Service Obligations and Award for Damages

public bus
Providers of public services must keep separate accounts. The parameters for calculating the compensation for the extra costs of public services must be determined in advance. Awards for damages do not constitute State aid. However, no damages can be awarded as a substitute for incompatible State aid.   Introduction It is often asked how compensation measures for public service obligations […]

New Video: How to notify State aid?

youtube screenshot
What is State aid? Why do I need to be concerned about State aid? These and many more basic questions are answered in our videos on YouTube. Make sure to visit us!   Today one of our speakers and Attaché for State aid of the Hungarian central administration, Peter Staviczky explains how you notify State aid to the European Commission. Find out how to […]

State Aid Goes YouTube: Visit Phedon Nicolaides on our YouTube Channel

lexxion logo and eu flags
What is State aid? Why do I need to be concerned about State aid? What is General Block Exemption Regulation (GBER) and how to use it? These and many more basic questions will be answered in our videos on YouTube. Make sure to visit us!   With great pleasure we announce the beginning of a new era of e-learning about […]

Luxembourg, Amazon, and the State aid connection

amazon package
The Commission’s opening decision: What should we make of Amazon’s ‘advance pricing agreement’ (APA) and its alleged (non-) compliance with the ‘arm’s length principle’ (ALP)? In early October 2014, the European Commission notified Luxembourg of its decision to open a state aid investigation in relation to the tax treatment of the Amazon group by the Luxembourgish tax authorities. This opening […]

Simultaneity of Investments by Public and Private Investors is a Necessary but not Sufficient Condition for Public Investments to be Free of State Aid

coins
If a public authority guarantees a loan to a company that is in financial difficulty and charges a low premium, the whole loan, not just the difference between the market rate of premium and the rate actually charged, will be considered to be State aid. Simultaneous capital injection by public and private investors is not enough to eliminate State aid […]

SMEs Linked through Natural Persons

corporate building
Two or more enterprises may constitute a single undertaking when their owners and/or managers are related in a way that they can act jointly to exercise influence over the decision of those enterprises. Introduction   On 27 February 2014, the Court of Justice rendered a judgment on the notion of “linked enterprises” following a request for preliminary ruling from a […]

The New Guidelines on State Aid to Airports and Airlines: Problematic Issues (part 2)

man looking airplane takeoff
Introduction Last week I reviewed the main provisions of the new Guidelines on State Aid to Airports and Airlines. This week I focus on three issues which are either not well explained or too ambiguous, leaving too much room for creative interpretation. [1] Investment funding gap The new Guidelines, like the other new rules, stress that aid must have an incentive […]

The New Guidelines on State Aid to Airports and Airlines (part 1)

man looking airplane takeoff
Introduction[1] One more set of State aid rules for 2014-20 has been adopted. On Thursday, 20 February 2014, the Commission published its Guidelines on State Aid to Airports and Airlines.[2] The other main substantive rules which are already in place are the following, in chronological order:[3] The package on services of general economic interest (SGEI): A Communication, a Decision (like a […]

The Role of National Courts in Recovery of Incompatible State Aid

court house
Introduction In December I examined the judgment in the case of Lufthansa v Frankfurt-Hahn, which laid down certain obligations for national courts whenever they are petitioned to suspend and even recover aid that happens to be at the same time under investigation by the Commission. In this article I review the judgment of the Court of Justice of 13 February […]

An Assessment of the State Aid Consistency of Financial Instruments Supported by Structural and Investment Funds (Regulation 1303/2013)

coins on the table
Introduction Last week I reviewed the new State aid guidelines on risk finance. This week I will examine the provisions on financial instruments in the new structural and investment funds regulation. The regulation was published in the Official Journal just before Christmas. Both sets of rules have been updated on the basis of similar principles. The primary aim of both […]

Guidelines on State Aid to Promote Risk Finance Investments

financial graph
Introduction   On 15 January the Commission adopted the fourth set of guidelines for the programming period 2014-2020 [the first three were those on broadband, SGEI, and regional aid]. The latest guidelines replaced those on risk capital for SMEs. What is immediately noticeable from the title of the new guidelines is that they are not confined only to funding in […]

Services of General Economic Interest and Horse Racing

horse racing
Introduction Public authorities often argue that the activities they support are important and that they should be considered as services of general economic interest. However, in many cases they are not. In this article I review the Commission Decision 2014/19 concerning a parafiscal levy that was intended to fund supposedly public service obligations assigned to French horse racing companies.[1] This Decision […]

The Possibly Conflicting Roles of EU Institutions on State Aid

EU flag
Introduction On 10 December 2013, the Court of Justice, in C‑272/12 P, wrote another chapter in the long-running case of the exemption from excise taxes for alumina producers in France, Ireland and Italy. This is not the last chapter. The Court annulled a judgment of the General Court and referred the case back to the General Court. In fact this […]

The Non-Equivalence of the Various Methods of Supporting Green Electricity

electrical sockets
Introduction Ever since the judgment of the Court of Justice in 2001 on PreussenElektra [case C-379/98], Member States have been grappling with the question of how to support electricity from renewable resources [green electricity] without granting State aid. In PreussenElektra the Court found that there was no transfer of state resources and no State aid, because the German government imposed […]

The New Rules on De minimis Aid for 2014-2020: Regulation 1407/2013

EU comission
Introduction[1] It is appropriate to start this year’s articles on State aid with an appraisal of one of the most important new legislative items for the period 2014-2020: the new de minimis rules. The European Commission adopted the new de minimis Regulation in mid-December and the formal text was published just before Christmas in the Official Journal of 24 December […]

Economically Rational Environmental Aid

water processing plant
Introduction A few months ago I wrote an article on this blog explaining the big puzzle of environmental State aid. Since the rules allow State aid which is only a proportion of the extra costs incurred by companies investing in environmentally friendly technology, it is puzzling why they make this investment. After all, they have the option of not incurring […]

Non-notified State Aid and the Role of National Courts C 284/12, Deutsche Lufthansa v Flughafen Frankfurt-Hahn

airplane on the runway
Introduction What prevents a Member State from granting State aid without first notifying it to the European Commission? Cynics would answer “nothing, in fact”. Indeed, nothing can stop a country that is determined to provide a subsidy. But after the judgment in case Lufthansa v Frankfurt Hahn Airport, the answer must be “unnecessary hassle”. Even if there is a slight […]

The Private Investor Principle Applied to Loans [Commission Decision 2013/528]

ship in the shipyard
Introduction The State aid issue in this case is relatively straightforward. Nauta, a Polish shipyard, received a two-year loan from IDA, the state-owned Polish Investment Agency. Because Nauta ran into some financial trouble, the loan was extended for another two years. In Decision 2013/528, the Commission had to examine two questions: First, did the initial loan market conform? Second, if […]

Private Vendor Principle: How to Organise a State-Aid-Free Sale of Public Assets

bank building
Introduction   The private investor principle (PIP) or market economy investor principle is well established in the case law. A closely related concept is the private vendor principle (PVP). The PIP applies when a public authority assumes risk by investing in an undertaking, for example through the purchase of shares, injection of capital, granting of a loan or provision of […]

A Public Authority Can Behave Like a Private Investor even when the Beneficiary Has Little Prospect of Future Profitability

airplane flying
Introduction When a public authority invests in an undertaking, it must earn a return at market rates, otherwise the investment is State aid. Normally, it is much easier to prove that the investment has a reasonable prospect of profitability and, therefore, that it would be made by a private investor, when the recipient undertaking is in a good financial situation. […]

A Case of Public Funding of Infrastructure that Does not Constitute State Aid: But Many Questions Remain

fortress
Introduction After the landmark judgment in Leipzig-Halle, public authorities are justifiably careful to ensure that the infrastructure they fund is either free of State aid or, if that is unavoidable, that the State aid is compatible with the internal market. Recent cases have shown that there are two problems in this regard. First, public authorities must verify whether the organisations […]

The Offsetting of a Structural Disadvantage Is still State Aid

scale and a book
Introduction Normally it is conceptually and technically fairly easy to determine whether an undertaking benefits from a public measure. However, this task becomes considerably more difficult in two situations: i) when a public authority claims that it acts like a private investor and ii) when a public measure is intended to compensate for a disadvantage suffered by the beneficiary undertaking […]

Privatisation of Aeroportos de Portugal: Conflict between the National Economic Adjustment Programme and State Aid Rules?

people at the airport
Background Portugal notified to the Commission the privatisation of the “Aeroportos de Portugal” [ANA] for reasons of legal certainty [SA.36197].[1] ANA is the operator of most Portuguese airports. It manages eight airports across Portugal (Lisbon, Porto, Faro, Beja, and 4 airports in the Azores) that account for the vast majority of the commercial air traffic in the country. It is worth […]

Public Support without State Aid

tablet with chart tabelle
Public measures that do not constitute state aid are as interesting as the measures that do provide aid. This posting examines two measures that have been found not to fall within the scope of Article 107(1) TFEU because they do not satisfy one or more of the four criteria laid down in that Article. Non-economic activity: Commission Decision SA.35529 on […]

PuState Resources and Payments between Undertakings

euro coins
Introduction A couple of years ago, the big issue in State aid law was the concept of selectivity. The judgments in the British Aggregates and Dutch NOx cases expanded, elaborated, and, some argued, convoluted the criteria for determining whether a measure was selective or not. This year, the big issue for sure is the concept of State resources. First came […]

Fiscal Leveraging: Donations and State Aid for Culture and Sports

runners on the track
Introduction In this blog I examine primarily a Dutch measure that supports cultural institutions by providing tax incentives to individuals and corporations to make donations to those institutions. This is an unusual construction because the direct beneficiaries are different from the indirect beneficiaries which, however, are the main targets of the measure. This construction has been used rather extensively in […]

Ex Post Evaluation of State Aid: A New Instrument

evaluation smileys
Introduction: The need for evaluation The State Aid Modernisation that was launched by the European Commission in May 2012 aims primarily to channel State aid to remedying genuine market failure. Subsequent policy documents have all been based on this underlying aim: to ensure that State aid is truly needed and effective in addressing market failure. The need and effectiveness of […]

Sale of State-owned Airlines [Commission Decision SA.33337 on sale of subsidiaries by LOT Polish Airlines]

airplane on the runway
Introduction In the previous posting I examined the funding of a regional airport. In this posting I look at a case concerning an airline; more specifically, the sale of three subsidiaries of Polish airline LOT.[1] During the past five or so years, the Commission has had to deal with many measures involving different kinds of public support to airlines [e.g. Alitalia, […]

The Market Economy Vendor Principle: Sale of Public Land by the Dutch Municipality of Leidschendam-Voorburg [Commission Decision SA.24123]

Cadastre
The previous posting examined a case where the European Commission applied the Market Economy Investor Principle [MEIP]. This is the principle that is used to determine whether there is state aid in commercial transactions between public authorities and undertakings. According to Article 345 of the Treaty on the Functioning of the European Union [TFEU], the European Union is neutral with […]

Blog Intro

pen and paper
State Aid Uncovered State aid law and policy evolve all the time. The basic rules are fairly stable but their interpretation and application are frequently adjusted to take into account changes in market conditions, novel forms of cooperation between public authorities and companies and ever more complex funding instruments and arrangements. This blog tracks the evolution of state aid law […]

- state aid ×

Non-recovery of Incompatible State aid Is Costly

corona virus poster
Legal and practical difficulties in the recovery of incompatible State aid do not constitute justifiable “absolute impossibility”. Temporary Framework On 1 May, the total number of State aid measures to combat covid-19 approved by the European Commission reached 102. Their legal basis was: Article 107(2)(b): 9; Article 107(3)(b): 86; Article 107(3)(c): 7   Introduction The 2020 Temporary Framework for State […]

Identification of Undertakings in Difficulty

corona virus poster
A company is in difficulty if, in practice, its accumulated net losses exceed 50% of its subscribed capital, regardless of whether the subscribed capital is formally written down. The classification of a company as being in difficulty is independent of the sector in which it operates and of whether a private investor would be willing to invest in it. Temporary […]

Follow Up Webinar with Phedon Nicolaides on ‚COVID-19 and State Aid Law‘ on 20 April

Woman sitting by the computer
The European Commission is working on quickly adapting the existing State aid legal framework to address the current Covid-19 pandemic. Join us on 20th April from the comfort and safety of your (home) office to get an insider update on the Covid-19 response by State aid experts from the European Commission and national governments. ✓ Join from wherever you are – […]

5 Most Read Articles on StateAidUncovered in 2019

Groundbreaking judgments like “Eesti Pagar”, applications of the private investor principle in air transport or questions of interpretation of the GBER besides many more, have moved and shaped this year’s judgments on State aid. Also Brexit and its meaning for State aid control in the UK has still been on everyone’s mind. See which articles by Prof. Phedon Nicolaides were […]

Retroactive Application of the GBER

When an aid scheme is adjusted by limiting the eligible beneficiaries, it becomes “new” aid and must be notified to the Commission. The GBER can be applied retroactively to aid that was granted before it came into force.   Introduction In July 2016, Dilly’s Wellnesshotel wrote legal history for being the first undertaking to contest the application of the General […]

How Can Incompatible State Aid Be Passed-on from one Company to another to Avoid Recovery?

Introduction State aid that is incompatible with the internal market has to be paid back, unless the repayment would be contrary to a general principle of EU law. Last November the Court of Justice ruled in case C‑622/16 P, Scuola Elementare Maria Montessori v European Commission that “(79) the principle that ‘no one is obliged to do the impossible’ is among the […]

Top 5 State Aid Uncovered Posts in 2017

Questions around grants for R&D&I projects, economic activities of religious establishments or concession agreements besides many more, have moved and shaped this year’s judgments on State aid. Also Brexit and its meaning for State aid control in the UK has been on everyone’s mind. See which articles by Prof. Phedon Nicolaides were the most popular ones in 2017. We have […]

15th Jubilee Feature – State Aid Experts Paying Court to EStAL: Alexander Rose

estal alexander rose
Since 2002 Lexxion Publisher’s European State Aid Law Quarterly – EStAL serves as a forum for dialogue and deliberation on all issues related to State aid. On the occasion of our 15th anniversary special feature we have gathered our State aid family to reflect upon their joint journey together with our precious EStAL and of course our favourite topic State […]

15th Jubilee Feature – State Aid Experts Paying Court to EStAL: Mihalis Kekelekis

EStAL Mihalis Kekelekis
Since 2002 Lexxion Publisher’s European State Aid Law Quarterly – EStAL serves as a forum for dialogue and deliberation on all issues related to State aid. On the occasion of our 15th anniversary special feature we have gathered our State aid family to reflect upon their joint journey together with our precious EStAL and of course our favourite topic State […]

15th Jubilee Feature – State Aid Experts Paying Court to EStAL: Birgit Haslinger

estal Birgit Haslinger
Since 2002 Lexxion Publisher’s European State Aid Law Quarterly – EStAL serves as a forum for dialogue and deliberation on all issues related to State aid. On the occasion of our 15th anniversary special feature we have gathered our State aid family to reflect upon their joint journey together with our precious EStAL and of course our favourite topic State […]

A Postscript on Brexit and State Aid

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 […]

State Aid is on the Agenda: Deal or No Deal

brexit
With great pleasure we welcome again Professor Erika Szyszczak to our blog. Erika is a Research Professor in Law and a Fellow of the UK Trade Policy Observatory. She is currently the Special Adviser to the House of Lords Internal Market Sub-Committee in respect of its inquiry into Brexit: competition. She is the author of The Regulation of the State […]

Public Service Obligations and Award for Damages

public bus
Providers of public services must keep separate accounts. The parameters for calculating the compensation for the extra costs of public services must be determined in advance. Awards for damages do not constitute State aid. However, no damages can be awarded as a substitute for incompatible State aid.   Introduction It is often asked how compensation measures for public service obligations […]

New Video: How to notify State aid?

youtube screenshot
What is State aid? Why do I need to be concerned about State aid? These and many more basic questions are answered in our videos on YouTube. Make sure to visit us!   Today one of our speakers and Attaché for State aid of the Hungarian central administration, Peter Staviczky explains how you notify State aid to the European Commission. Find out how to […]

State Aid Goes YouTube: Visit Phedon Nicolaides on our YouTube Channel

lexxion logo and eu flags
What is State aid? Why do I need to be concerned about State aid? What is General Block Exemption Regulation (GBER) and how to use it? These and many more basic questions will be answered in our videos on YouTube. Make sure to visit us!   With great pleasure we announce the beginning of a new era of e-learning about […]

Luxembourg, Amazon, and the State aid connection

amazon package
The Commission’s opening decision: What should we make of Amazon’s ‘advance pricing agreement’ (APA) and its alleged (non-) compliance with the ‘arm’s length principle’ (ALP)? In early October 2014, the European Commission notified Luxembourg of its decision to open a state aid investigation in relation to the tax treatment of the Amazon group by the Luxembourgish tax authorities. This opening […]

Simultaneity of Investments by Public and Private Investors is a Necessary but not Sufficient Condition for Public Investments to be Free of State Aid

coins
If a public authority guarantees a loan to a company that is in financial difficulty and charges a low premium, the whole loan, not just the difference between the market rate of premium and the rate actually charged, will be considered to be State aid. Simultaneous capital injection by public and private investors is not enough to eliminate State aid […]

SMEs Linked through Natural Persons

corporate building
Two or more enterprises may constitute a single undertaking when their owners and/or managers are related in a way that they can act jointly to exercise influence over the decision of those enterprises. Introduction   On 27 February 2014, the Court of Justice rendered a judgment on the notion of “linked enterprises” following a request for preliminary ruling from a […]

The New Guidelines on State Aid to Airports and Airlines: Problematic Issues (part 2)

man looking airplane takeoff
Introduction Last week I reviewed the main provisions of the new Guidelines on State Aid to Airports and Airlines. This week I focus on three issues which are either not well explained or too ambiguous, leaving too much room for creative interpretation. [1] Investment funding gap The new Guidelines, like the other new rules, stress that aid must have an incentive […]

The New Guidelines on State Aid to Airports and Airlines (part 1)

man looking airplane takeoff
Introduction[1] One more set of State aid rules for 2014-20 has been adopted. On Thursday, 20 February 2014, the Commission published its Guidelines on State Aid to Airports and Airlines.[2] The other main substantive rules which are already in place are the following, in chronological order:[3] The package on services of general economic interest (SGEI): A Communication, a Decision (like a […]

The Role of National Courts in Recovery of Incompatible State Aid

court house
Introduction In December I examined the judgment in the case of Lufthansa v Frankfurt-Hahn, which laid down certain obligations for national courts whenever they are petitioned to suspend and even recover aid that happens to be at the same time under investigation by the Commission. In this article I review the judgment of the Court of Justice of 13 February […]

An Assessment of the State Aid Consistency of Financial Instruments Supported by Structural and Investment Funds (Regulation 1303/2013)

coins on the table
Introduction Last week I reviewed the new State aid guidelines on risk finance. This week I will examine the provisions on financial instruments in the new structural and investment funds regulation. The regulation was published in the Official Journal just before Christmas. Both sets of rules have been updated on the basis of similar principles. The primary aim of both […]

Guidelines on State Aid to Promote Risk Finance Investments

financial graph
Introduction   On 15 January the Commission adopted the fourth set of guidelines for the programming period 2014-2020 [the first three were those on broadband, SGEI, and regional aid]. The latest guidelines replaced those on risk capital for SMEs. What is immediately noticeable from the title of the new guidelines is that they are not confined only to funding in […]

Services of General Economic Interest and Horse Racing

horse racing
Introduction Public authorities often argue that the activities they support are important and that they should be considered as services of general economic interest. However, in many cases they are not. In this article I review the Commission Decision 2014/19 concerning a parafiscal levy that was intended to fund supposedly public service obligations assigned to French horse racing companies.[1] This Decision […]

The Possibly Conflicting Roles of EU Institutions on State Aid

EU flag
Introduction On 10 December 2013, the Court of Justice, in C‑272/12 P, wrote another chapter in the long-running case of the exemption from excise taxes for alumina producers in France, Ireland and Italy. This is not the last chapter. The Court annulled a judgment of the General Court and referred the case back to the General Court. In fact this […]

The Non-Equivalence of the Various Methods of Supporting Green Electricity

electrical sockets
Introduction Ever since the judgment of the Court of Justice in 2001 on PreussenElektra [case C-379/98], Member States have been grappling with the question of how to support electricity from renewable resources [green electricity] without granting State aid. In PreussenElektra the Court found that there was no transfer of state resources and no State aid, because the German government imposed […]

The New Rules on De minimis Aid for 2014-2020: Regulation 1407/2013

EU comission
Introduction[1] It is appropriate to start this year’s articles on State aid with an appraisal of one of the most important new legislative items for the period 2014-2020: the new de minimis rules. The European Commission adopted the new de minimis Regulation in mid-December and the formal text was published just before Christmas in the Official Journal of 24 December […]

Economically Rational Environmental Aid

water processing plant
Introduction A few months ago I wrote an article on this blog explaining the big puzzle of environmental State aid. Since the rules allow State aid which is only a proportion of the extra costs incurred by companies investing in environmentally friendly technology, it is puzzling why they make this investment. After all, they have the option of not incurring […]

Non-notified State Aid and the Role of National Courts C 284/12, Deutsche Lufthansa v Flughafen Frankfurt-Hahn

airplane on the runway
Introduction What prevents a Member State from granting State aid without first notifying it to the European Commission? Cynics would answer “nothing, in fact”. Indeed, nothing can stop a country that is determined to provide a subsidy. But after the judgment in case Lufthansa v Frankfurt Hahn Airport, the answer must be “unnecessary hassle”. Even if there is a slight […]

The Private Investor Principle Applied to Loans [Commission Decision 2013/528]

ship in the shipyard
Introduction The State aid issue in this case is relatively straightforward. Nauta, a Polish shipyard, received a two-year loan from IDA, the state-owned Polish Investment Agency. Because Nauta ran into some financial trouble, the loan was extended for another two years. In Decision 2013/528, the Commission had to examine two questions: First, did the initial loan market conform? Second, if […]

Private Vendor Principle: How to Organise a State-Aid-Free Sale of Public Assets

bank building
Introduction   The private investor principle (PIP) or market economy investor principle is well established in the case law. A closely related concept is the private vendor principle (PVP). The PIP applies when a public authority assumes risk by investing in an undertaking, for example through the purchase of shares, injection of capital, granting of a loan or provision of […]

A Public Authority Can Behave Like a Private Investor even when the Beneficiary Has Little Prospect of Future Profitability

airplane flying
Introduction When a public authority invests in an undertaking, it must earn a return at market rates, otherwise the investment is State aid. Normally, it is much easier to prove that the investment has a reasonable prospect of profitability and, therefore, that it would be made by a private investor, when the recipient undertaking is in a good financial situation. […]

A Case of Public Funding of Infrastructure that Does not Constitute State Aid: But Many Questions Remain

fortress
Introduction After the landmark judgment in Leipzig-Halle, public authorities are justifiably careful to ensure that the infrastructure they fund is either free of State aid or, if that is unavoidable, that the State aid is compatible with the internal market. Recent cases have shown that there are two problems in this regard. First, public authorities must verify whether the organisations […]

The Offsetting of a Structural Disadvantage Is still State Aid

scale and a book
Introduction Normally it is conceptually and technically fairly easy to determine whether an undertaking benefits from a public measure. However, this task becomes considerably more difficult in two situations: i) when a public authority claims that it acts like a private investor and ii) when a public measure is intended to compensate for a disadvantage suffered by the beneficiary undertaking […]

Privatisation of Aeroportos de Portugal: Conflict between the National Economic Adjustment Programme and State Aid Rules?

people at the airport
Background Portugal notified to the Commission the privatisation of the “Aeroportos de Portugal” [ANA] for reasons of legal certainty [SA.36197].[1] ANA is the operator of most Portuguese airports. It manages eight airports across Portugal (Lisbon, Porto, Faro, Beja, and 4 airports in the Azores) that account for the vast majority of the commercial air traffic in the country. It is worth […]

Public Support without State Aid

tablet with chart tabelle
Public measures that do not constitute state aid are as interesting as the measures that do provide aid. This posting examines two measures that have been found not to fall within the scope of Article 107(1) TFEU because they do not satisfy one or more of the four criteria laid down in that Article. Non-economic activity: Commission Decision SA.35529 on […]

PuState Resources and Payments between Undertakings

euro coins
Introduction A couple of years ago, the big issue in State aid law was the concept of selectivity. The judgments in the British Aggregates and Dutch NOx cases expanded, elaborated, and, some argued, convoluted the criteria for determining whether a measure was selective or not. This year, the big issue for sure is the concept of State resources. First came […]

Fiscal Leveraging: Donations and State Aid for Culture and Sports

runners on the track
Introduction In this blog I examine primarily a Dutch measure that supports cultural institutions by providing tax incentives to individuals and corporations to make donations to those institutions. This is an unusual construction because the direct beneficiaries are different from the indirect beneficiaries which, however, are the main targets of the measure. This construction has been used rather extensively in […]

Ex Post Evaluation of State Aid: A New Instrument

evaluation smileys
Introduction: The need for evaluation The State Aid Modernisation that was launched by the European Commission in May 2012 aims primarily to channel State aid to remedying genuine market failure. Subsequent policy documents have all been based on this underlying aim: to ensure that State aid is truly needed and effective in addressing market failure. The need and effectiveness of […]

Sale of State-owned Airlines [Commission Decision SA.33337 on sale of subsidiaries by LOT Polish Airlines]

airplane on the runway
Introduction In the previous posting I examined the funding of a regional airport. In this posting I look at a case concerning an airline; more specifically, the sale of three subsidiaries of Polish airline LOT.[1] During the past five or so years, the Commission has had to deal with many measures involving different kinds of public support to airlines [e.g. Alitalia, […]

The Market Economy Vendor Principle: Sale of Public Land by the Dutch Municipality of Leidschendam-Voorburg [Commission Decision SA.24123]

Cadastre
The previous posting examined a case where the European Commission applied the Market Economy Investor Principle [MEIP]. This is the principle that is used to determine whether there is state aid in commercial transactions between public authorities and undertakings. According to Article 345 of the Treaty on the Functioning of the European Union [TFEU], the European Union is neutral with […]

Blog Intro

pen and paper
State Aid Uncovered State aid law and policy evolve all the time. The basic rules are fairly stable but their interpretation and application are frequently adjusted to take into account changes in market conditions, novel forms of cooperation between public authorities and companies and ever more complex funding instruments and arrangements. This blog tracks the evolution of state aid law […]

How to Submit a Blog Post

Do you want to share your analysis of a State aid law topic? We invite you to submit your post on, for example: recent European, national or international judgments or legislation with relevance to EU State aid law; new developments, publications, hot topics in EU State aid law. The recommended length of the post is 500-2,000 words incl. references (endnotes). Your analysis will be published under the category ‘Guest State Aid Blog’.

Here’s how you can publish a post on as a guest author:

Step 1: Submit your draft post as a Word file to stateaidhub[a]lexxion.eu.

Step 2: The StateAidHub team will review your draft to make sure its content and quality fit the blog. If needed, they will suggest what improvements you should make.

Step 3: Once your draft has been finalised and accepted, we will send you a link to register and log-in to the State aid blog as a guest author.

Step 4: Once you have logged-in to the blog, you can upload and publish your post.

Step 5: Enjoy the fame!

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