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

State Aid to Group of Companies

In assessing the compatibility of State aid with the internal market, the Commission must also consider previous awards to a legally distinct but related company. In assessing the need for rescue/restructuring aid, the Commission must also consider whether the recipient is a member of a group that can provide internal funding. Introduction Paragraph 11 of the Commission’s Notice on the […]

Economic Continuity and Recovery of Indirect State Aid

Special insolvency procedures can confer a selective advantage that constitutes State aid. A recovery order can be extended to the new owner of a company that had received incompatible State aid. Introduction Recipients of State aid that is found to be incompatible with the internal market have to pay it back with interest. This liability for repayment also extend to […]

The Impossibility of Proving the Absolute Impossibility to Recover Incompatible State Aid

It is not sufficient to claim that is it absolutely impossible to recover incompatible State aid. It must be shown that alternative methods have been actually tried without success. Introduction It is rather impossible for Member States to prove that it is absolutely impossible to recover State aid that has been found by the Commission, and confirmed by EU courts, […]

Compensation for Universal Service Provision

As long as the compensation does not exceed the net extra costs of the universal service activities, it may be used to offset other costs. Introduction The rules on State aid for services of general economic interest [SGEI] are very generous because they allow both investment and operating aid. Yet, it is not easy to comply with those rules because […]

State Aid and Essential National Interest

State aid that is necessary for protecting essential national interests can be compatible with the internal market. Introduction State aid should support outcomes that the market by itself cannot achieve. This implies that State aid that is restricted to only one or a few undertakings is unlikely to be capable of delivering the desired outcome. Yet, sometimes there may be […]

State Aid Measures May not be Funded through Discriminatory Taxes

A tax that is levied on both imported and domestic products but its revenue finances only domestic products infringes fundamental provisions of the EU Treaty. Introduction Member States finance the generation of electricity from renewable energy sources [RES] with revenue they raise through levies or charges on consumers of electricity. On 14 April 2021, the General Court in judgment in […]

Turnover Taxes Can Be Progressive without Being Selective

Progressive rates can be part of a reference tax system. The reference tax system is, in principle, made up of the tax base, the tax rates and the taxable events. Introduction Progressive turnover taxes were thought to be selective because they are levied on gross revenue before costs are deducted and larger volumes of revenue are taxed at higher rates. […]

Individual Aid Measures to Combat Covid-19

Aid to remedy a serious economic disturbance may be granted to a single company that is important for the national economy. EU law does not extend to competitors a right to the same aid. Introduction Between March 2020 and April 2021, the European Commission has authorised aid totalling more than EUR 2.5 trillion to remedy the serious economic disturbance caused […]

Draft New RDI Framework

The new RDI Framework provides continuity with clarity. On Monday, 19 April 2021, the European Commission published the new Regional Aid Guidelines for the period 2022-2027. They can be accessed at: https://ec.europa.eu/competition/state_aid/regional_aid/RAG_2021_adopted_communication.zip Introduction On 8 April 2021, the European Commission published the text of the draft new RDI Framework and launched public consultation.[1] The draft RDI Framework is accompanied by […]

State Guarantee to an Energy Project

A state guarantee can bridge the funding gap of an infrastructure project. Introduction State aid rules allow energy infrastructure projects to be supported by as much aid as is necessary to bridge their “funding gap”; i.e. the difference between the initial investment cost and the present value of their expected net operating revenue which is the future gross revenue minus […]

State Aid for i) Water Development ii) Travel

Aid to individuals in the context of social policy is compatible with the internal market as long as it is granted without discrimination on the origin of products or services. Temporary Framework: Number of approved covid-19 measures, as of 22 May 2020: 129* Legal basis: Article 107(2)(b): 9; Article 107(3)(b): 111; Article 107(3)(c): 12 * Excludes amendments to previously notified […]

No New Aid to Undertakings that Have not Yet Repaid Incompatible Aid

There is no rule in EU law obliging Member States to grant State aid. The European Commission may refuse to authorise aid until previous aid that was found to be incompatible with the internal market is paid back. Temporary Framework: Number of approved covid-19 measures, as of 16 May 2020: 125* Legal basis: Article 107(2)(b): 10; Article 107(3)(b): 105; Article […]

Advantage Must be Proven, Not Assumed

The European Commission has to consider whether the private investor principle is applicable in cases of state investments. It is for Member States to prove that their investments conform with the private investor principle. Temporary Framework As of 9 May 2020, the European Commission had approved 113 State aid measures to combat covid-19. Their legal basis was: Article 107(2)(b): 10; […]

Non-recovery of Incompatible State aid Is Costly

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

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 […]

How to Price a Guarantee

The pricing of a guarantee must take into account not only the financial situation of the borrower but also the value of any collateral. Temporary Framework As of 17 April 2020, the European Commission authorised 61 State aid measures from 23 Member States and the UK to combat covid-19.   Introduction State guarantees on loans make up the largest category […]

Errors in State aid Procedures Need not Result in Annulment of a Commission Decision

Interested parties have a right to know how the compatibility of aid with the internal market is assessed. Temporary Framework developments As of 13 April 2020, the European Commission had authorised 51 measures adopted by 23 Member States. According to the statement of the Eurozone finance ministers of 9 April 2020, Member States had provided liquidity in the form of […]

EU Decisions Override National Decisions on Compensation for Public Service Obligations

The principle of res judicata cannot be used to avoid recovery of incompatible State aid.   An update on State aid measures to counter the impact of COVID-19 As of 3 April 2020, the Commission has approved 29 measures submitted by 16 Member States. Article 107(3)(b) is the legal basis for 26 of those measures, while Article 107(2)(b) is the […]

How to Make Good the Damage Caused by a Natural Disaster

Compensation for costs incurred as a result of a natural disaster is State aid. The compensation must be for damage directly caused by the natural disaster. Introduction State aid to make good the damage caused by an “exceptional occurrence” such as the corona virus covid-19 is compatible with the internal market. The legal basis for exemption is Article 107(2)(b). Of […]

A New Temporary State aid Framework to Fight the Effects of the Corona Virus

Member States will be allowed to provide grants, guarantees and loans to companies to alleviate the effects of the corona virus. Introduction At the end of 2009, the European Commission adopted a Temporary Framework of State aid rules to enable Member States to support companies that were harmed by the outbreak of the financial crisis in 2008. Now, the corona […]

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