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

Attempting to Minimise Past State aid Is of No Interest to a Private Investor

A public authority acting as a private investor ignores past State aid. Introduction It is now a settled principle that when a public authority intends or pretends to act as a private investor it must not take into account any past aid it has granted to the company in which it wants to invest. On 19 September 2019, the General Court […]

Public Service Obligations, Duration of Entrustment and Reasonable Profit

The duration of entrustment should not exceed the economic life of the investment and the rate of return should reflect the commercial risk of that investment. Introduction Is a 55-year entrustment through a direct award compatible with EU rules? And is a profit rate that exceeds the risk-free rate of return reasonable? These are some of the questions that the […]

Enforcement of State Aid Rules by National Courts

Private enforcement has increased, but damages for illegal granting of State aid have been successfully claimed in just one case. Introduction   According to the annual competition report that was published in July, Member States use the GBER to implement 96% of their new aid measures.[1] This impressive outcome should be seen in conjunction with the recent rulings of the Court […]

“Invest-NL”: A New Promotional Bank

A state-owned promotional or development bank can pursue public policy objectives and also invest on terms which are acceptable to private investors. Introduction During the past decade or so several Member States have established “promotional” or “development” banks for the purpose of investing where the market does not. Private investors may be reluctant to commit their money for a variety […]

Sale of a Bank without State aid

The sale must be open, transparent, non-discriminatory, unconditional and the winning bid must be the offer with the highest price. Introduction The German HSH Nordbank used to be the largest provider of ship finance in the world. It had commercial presence in over 20 major financial centres. Before the outbreak of the financial crisis in 2008, HSH Nordbank had a […]

Individually Notified Regional Aid

All individual awards of aid granted to the same project over a three-year period have to be counted together and remain below the maximum allowable aid intensity in relation to the sum of eligible costs. Introduction Hungary operates an aid scheme that offers tax credits to encourage regional investment. The scheme has been implemented on the basis of the GBER […]

Presumed v Actual Compatibility of State aid with the Internal Market

State aid granted on the basis of the GBER may not be considered as authorised by the Commission. The task of Member States is to ensure that all of the requirements of the GBER are fulfilled. In particular, Member States must confirm the incentive effect of aid to large enterprises. Introduction[1]   In March 2019, the Court of Justice delivered […]

A Curious Case of Port Concessions

The obligations of a concessionaire may be made less onerous in order to enable it to remain in operation. Any adjustment of the obligations takes into account the possible legal defences of the concessionaire. Introduction The Market Economy Investor Principle [MEIP] is a powerful concept. Its many variations attest to its versatility [e.g. market economy investor, operator, vendor, creditor]. It […]

Repayable Advances for Support of Research Projects

The amount of State aid in a repayable advance to support research projects is the difference between the return a private investor would demand and the actual return for the funding authority. Introduction According to the staff working paper accompanying the 2018 annual competition report that was published on 15 July 2019, 95% of all State aid measures supporting R&D […]

Aid to Providers of Local Services through Exclusive Contracts Can still Affect Cross-border Trade

An exclusive contract can affect cross-border trade if the awarding authority has the option to use a competitive selection procedure. Aid to the operator of a legal monopoly may affect trade if the operator can cross-subsidise activities outside the area of the monopoly. Introduction A perennial question is whether aid to providers of local services can affect cross-border trade. Given […]

The Private Investor Principle in Air Transport – Part II

Public funds managed by private airport operators can be classified as state resources. Prices charged by airport operators can be used as a benchmark for market prices only if their activities and size are comparable and their costs are not subsidised by State aid. Before a private investor enters into any commercial arrangement, it takes into account all relevant information, […]

The Private Investor Principle in Air Transport – Part I

Public funds managed by private airport operators can be classified as state resources. Prices charged by airport operators can be used as a benchmark for market prices only if their activities and size are comparable and their costs are not subsidised by State aid. Before a private investor enters into any commercial arrangement, it takes into account all relevant information, […]

Justification of a Tax Exemption

Prevention of excessive taxation may justify tax exemption. Prevention of abuse may justify limits to the tax exemption.   Introduction   A tax exemption may not constitute state aid if it is justified by reasons which are linked to the nature or general scheme of the tax system. This is what the Court of Justice said on 19 December 2018, […]

Infrastructure Projects, State Guarantees and Distortion of Competition

State guarantees must be limited in duration and amount and the conditions for their mobilization must be defined in advance. Public funding to an operator in a closed sector does not affect trade and, therefore, does not constitute State aid.   Introduction Large infrastructure projects are complex, encounter many unforeseen problems and often fall behind schedule for years. Consider, for […]

The Date and Scope of Public Service Compensation

Aid is deemed to be granted on the date the beneficiary undertaking acquires the legal right to it, regardless of whether it is actually paid on that date. It is not enough for a public authority to define the service that it wants an operator to provide and the price that it should charge. It must also define where and […]

The Challenge of Identifying the Reference Tax System: The Spanish Goodwill Case, Again

To determine whether an aid measure is selective, the treatment of the beneficiaries has to be compared to those undertakings which are in a comparable position.   Introduction   On 15 November 2018, the General Court ruled in case T-239/11, Sigma Alimentos Exterior v European Commission.1 Sigma Alimentos Exterior (SAE), a Spanish company, appealed against Commission decision 2011/282 which found that […]

The Recovery of Incompatible Aid Cannot be Absolutely Impossible Unless it is first Attempted

Introduction In its ruling of 6 November 2018 in cases C‑622/16 P to C‑624/16 P, Scuola Elementare Maria Montessori v European Commission, the Court of Justice made it harder for Member States to escape from their recovery obligations.[1] Montessori appealed against the judgment of the General Court in case T‑220/13, Scuola Elementare Maria Montessori v European Commission. That judgment was reviewed here on […]

Legal Standing of Investors in Failed Banks

Investors that lodge claims before national courts for damages from resolution of banks have legal standing to request annulment of Commission decisions authorising State aid to those banks. Introduction It is now ten years since the start of the financial crisis. In these ten years, the Commission has adopted about 500 decisions dealing with State aid to banks and other […]

State Aid Provisions in the Draft Agreement on the Withdrawal of the UK from the EU

The agreement on the withdrawal of the UK from the EU requires compliance with EU State aid rules.   Introduction   On 14 November 2018, EU and UK negotiators finalised the text of the Agreement on the withdrawal of the UK from the EU.[1] The Agreement has to be ratified by the UK and the other 27 Member States. Given immediate […]

Using the Correct Methodology to Calculate Public Service Compensation

Compensation for the extra costs of a public service obligation may include a reasonable profit that reflects the risk borne by the provider of the public service.   Introduction   The calculation of the amount of compensation for the extra costs of public service obligations can be difficult and tricky. In the absence of such calculation, aid to providers of […]

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