State Aid Law Blog

State Aid Uncovered by Prof Phedon Nicolaides

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.

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

15. July 2021  |   Guest State Aid Blog by Lexxion Publisher

Public Support to Ultrafast Networks in the Italian NRRP
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As part of the investments to support the digitisation, innovation and competitiveness of the production system[1], the Italian Recovery and Resilience Plan (NRRP) has allocated €6.71 billion for interventions in favor of ultra-fast networks (ultra-broadband and 5G)[2]. The amount will be deployed by 2026 to achieve the objectives defined in the “Italian Strategy for ultra-broadband”[3] in accordance with the EU […]
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13. July 2021  |   State Aid Uncovered by Phedon Nicolaides

Existing Aid, New Aid and Retroactive Application of a Block Exemption Regulation
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Changes to approved aid measures result in new aid. Only purely formal or administrative changes do not turn existing aid into new. Prolongation of an existing aid measure is not purely formal or administrative. Introduction Any change to an approved aid measure that affects its compatibility with the internal market turns it into a new aid that has to be […]
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8. July 2021  |   Guest State Aid Blog by Alexander Rose

The UK’s New Subsidy Control Bill: Targeting a Faster, More Permissive Regime Than EU State Aid Rules
The long awaited Subsidy Control Bill has been published by the UK Government with bold promises that it will “create a new system for subsidies that can enable key domestic priorities, such as levelling up economic growth across the UK and driving our green industrial revolution“.  In this article we identify the main changes immediately emerging from the draft legislation, […]
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6. July 2021  |   State Aid Uncovered by Phedon Nicolaides

Disentangling the Impact of Covid-19 from other Business Problems
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State aid may only compensate for the direct damage caused by covid-19. Introduction Aid that compensates for damage caused by natural disasters or exceptional occurrences is declared by Article 107(2)(b) TFEU to be compatible with the internal market. That is why Article 1(4)(c) of the GBER does not exclude, as is normally the practice, undertakings in difficulty from schemes that […]
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29. June 2021  |   State Aid Uncovered by Phedon Nicolaides

Amazon and the Difficulty of Finding a Comparable Tax Payer
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To apply the Arm’s Length Principle to transactions between two related companies, the Commission must identify the less complex company of the two and compare it to a similar independent company. Methodological errors in the application of the Arm’s Length Principle by national authorities does not necessarily prove the existence of advantage. Introduction On 12 May 2021 the Commission suffered […]
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22. June 2021  |   State Aid Uncovered by Phedon Nicolaides

Is State Aid for Locally Established Undertakings Compatible with the Internal Market?
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Limitation of State aid to companies which have a durable link with the local economy can be compatible with the internal market. Introduction By prohibiting barriers to free movement and establishment in the internal market, the EU seeks to make the choice of location of a company largely irrelevant. All companies should be treated the same regardless of where they […]
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15. June 2021  |   State Aid Uncovered by Phedon Nicolaides

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 […]
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8. June 2021  |   State Aid Uncovered by Phedon Nicolaides

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 […]
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1. June 2021  |   State Aid Uncovered by Phedon Nicolaides

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, […]
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25. May 2021  |   State Aid Uncovered by Phedon Nicolaides

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 […]
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2. March 2021  |   State Aid Uncovered by Phedon Nicolaides

State Aid May be Limited to Undertakings with Close Links with the National Economy (Part II)
State Aid Blogs - StateAidHub blogpost8 9 Ryanair
State aid may be used to compensate airlines licensed by domestic authorities for losses incurred as a result of national travel restrictions. [In case you have missed part I, you can access it here.] Introduction The European Commission acted swiftly to adopt a fairly accommodating and wide-ranging “Temporary Framework” to regulate State aid for the purposes of counter-acting the impact […]
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23. February 2021  |   State Aid Uncovered by Phedon Nicolaides

State Aid May be Limited to Undertakings with Close Links with the National Economy (Part I)
State Aid Blogs - StateAidHub blogpost8 9 Ryanair
State aid may be used to compensate airlines licensed by domestic authorities for losses incurred as a result of national travel restrictions. Introduction The European Commission acted swiftly to adopt a fairly accommodating and wide-ranging “Temporary Framework” to regulate State aid for the purposes of counter-acting the impact of covid-19. The Temporary Framework was welcomed by both Member States and […]
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16. February 2021  |   State Aid Uncovered by Phedon Nicolaides

Liquidity Assistance to Banks to Counter the Effects of Covid-19
State Aid Blogs - StateAidHub blogpost7 Bank Italy
Any direct public support of financial institutions affected by covid-19 has to comply with both State aid rules and the rules of the banking union. Introduction The Temporary Framework for State aid to combat covid-19 excludes financial institutions. But it does not mean that banks do not benefit indirectly from State aid granted to other sectors of the economy. This […]
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9. February 2021  |   State Aid Uncovered by Phedon Nicolaides

The State Acting as a Regulator
State Aid Blogs - StateAidHub blogpost6 NL gambling
When the state acts as a regulator, it does not have to charge a licence fee that maximises its revenue. Introduction Governments can influence the allocation of resources with at least three instruments: subsidisation, taxation and regulation. All three may contain State aid; if subsidies are selective, if taxes allow for exemptions and if regulation involves charges which are not […]
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2. February 2021  |   State Aid Uncovered by Phedon Nicolaides

Helsinki Busses, Loans, Article 93 and Indemnification
State Aid Blogs - StateAidHub blogpost5 Helsinki bus
Bus transportation provided by public authorities constitutes economic activity. Loans given by a public authority to its transport unit have to be priced at market rates. The market value of public assets sold to third parties has to reflect any state indemnities. Temporary Framework The European Commission announced on 28 January 2021 a fifth amendment to the Temporary Framework. [1] […]
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26. January 2021  |   State Aid Uncovered by Phedon Nicolaides

Training and State Resources
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The definition of quality indicators and the establishment of certificates of quality do not amount to control by the state over the resources belonging to non-state entities. Introduction Consider the case of a public university which decides to finance the proposal of one of its researchers to launch a research project in collaboration with a private company. For sure the […]
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19. January 2021  |   State Aid Uncovered by Phedon Nicolaides

Funding of Public Hospitals
State Aid Blogs - StateAidHub blogpost3 Hospitals
Public healthcare provided in accordance with the principle of social solidarity is not economic in nature. Introduction There are two sectors where economic and non-economic activities mix and cause potential State aid problems: healthcare and education. Healthcare and education provided by public institutions do not differ much from healthcare and education provided by private institutions. The critical difference is not […]
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12. January 2021  |   State Aid Uncovered by Phedon Nicolaides

A First Evaluation of Covid-19 State Aid
State Aid Blogs - StateAidHub blogpost2 Covid
There is a significant variation across Member States in terms of the number of aid measures as well as the amount of aid. Introduction On 17 December 2020, the European Parliament published a report evaluating the impact of State aid to combat covid-19.[1] The report was requested by the committee responsible for economic policy. The report is probably the first […]
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5. January 2021  |   State Aid Uncovered by Phedon Nicolaides

One Agreement, Two Parallel Systems: Subsidies in the Trade and Cooperation Agreement between the EU and the UK
State Aid Blogs - StateAidHub blogpost1 Brexit
The agreement on subsidies allows the UK to deviate from EU State aid rules. Introduction After the exit of the United Kingdom [UK] from the European Union [EU] on 31 January 2020, EU State aid rules continued to apply to the UK during a transitional period that came to an end on 31 December 2020. In the closing days of […]
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28. December 2020  |   State Aid Uncovered by Phedon Nicolaides

The Time Horizon of a Private Investor
State Aid Blogs - StateAidHub blogpost51
A public authority that claims that it invests for the long term, must still prove that its investment is likely to be profitable. Introduction Public authorities may invest in private companies. However, they need to behave as private investors otherwise they confer an advantage that constitutes State aid. In their defence, public authorities claiming that they act as private investors, […]
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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’.

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