State Aid Law Blog

State Aid Uncovered Blog

In Lexxion’s State Aid Uncovered blog, Prof. Phedon Nicolaides publishes weekly critical analyses of recent State aid judgments and decisions. Each post presents the key points of a court judgment or EU Commission decision, places it in the context of similar case law or practice, assesses the underlying reasoning and highlights any inconsistencies or contradictions.

Guest contributions from other State aid experts will also be published on the blog at irregular intervals to complement the content of the blog posts.

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31. March 2020  |   State Aid Uncovered by Phedon Nicolaides

How to Make Good the Damage Caused by a Natural Disaster
State Aid Blogs - sergio torres nUw2nIGeGYY unsplash
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 […]
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25. March 2020  |   Guest State Aid Blog by Lexxion Publisher

Join our live webinar with Phedon Nicolaides on ‚COVID-19 and State Aid Law‘ on 2 April
hands typing on the laptop
Due to global developments and responding to various requests, Lexxion has created a live webinar to keep you updated on the latest news regarding the corona virus and State aid law. You can join from wherever you are and receive high-quality content at your (home) office.   In response to the Covid-19 pandemic, EU Member States are urgently rolling out […]
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20. March 2020  |   State Aid Uncovered by Phedon Nicolaides

A New Temporary State aid Framework to Fight the Effects of the Corona Virus
corona virus poster
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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17. March 2020  |   State Aid Uncovered by Phedon Nicolaides

Has an Economic Myth Become a Legal Fact? The Case of Turnover Taxes
State Aid Blogs - Turnover
Progressive turnover taxes are not contrary to the freedom of establishment or the right of equal treatment. Introduction Recent cases involving “turnover” taxes have sparked a debate in the literature and on the conference circuit not only because they raise novel issues but also because of their implications for other taxes which are being mooted by European governments. As Advocate-General […]
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11. March 2020  |   State Aid Uncovered by Phedon Nicolaides

Financial Transactions between the State and Banks with No State aid
State Aid Blogs - StateAidHub blogpost10 state guarantees
Capital injections, state guarantees and loans granted to banks can be free of State aid if they are priced at market rates which reflect the risk borne by the state. Introduction If banks can obtain capital, loans and guarantees from the state at market rates why don’t they go directly to the market? No one has yet given a satisfactory […]
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3. March 2020  |   State Aid Uncovered by Phedon Nicolaides

Public Funding of Infrastructure without State Aid
State Aide_Infrastructure
The existence of State aid must be checked at the level of both the direct and indirect beneficiaries who are the owners and users of infrastructure, respectively. If payments to private land owners are to be free of State aid, they must be calculated on the basis of an objective formula that takes into account the size and value of […]
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25. February 2020  |   State Aid Uncovered by Phedon Nicolaides

Environmental Remediation and State Liability
State Aid Blogs - StateAidHub blogpost8 environmental remediation
Liability assumed by the state for the actions of an undertaking constitutes a selective advantage that may result in potential transfer of state resources in the future. Introduction On 16 January 2020 the General Court delivered its judgment in case T‑257/18, Iberpotash v European Commission.[1] Iberpotash, a Spanish company, appealed against Commission decision 2018/118. Iberpotash owns and operates potash mines […]
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21. February 2020  |   State Aid Uncovered by Phedon Nicolaides

From Waste to Energy
State Aid Blogs - StateAidHub blogpost7 waste to energy
State aid to incentivise the use of waste to produce energy must be individually notified. Introduction Waste management is an increasingly important aspect of policies aiming to prevent environmental degradation and slow down climate change. As the market for recycling expands and waste management becomes more profitable, there is also a higher risk of harm to competition by State aid. […]
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12. February 2020  |   State Aid Uncovered by Phedon Nicolaides

An Important (and so far, Unique) Project of Common European Interest
State Aid Blogs - StateAidHub blogpost6 microplastics IPCEI
State aid for important R&D projects of common European interest can cover different costs than the RDI Framework and at different rates of intensity. Introduction Several Member States have demanded a more active industrial policy to counteract perceived unfair foreign competition. The Commission’s response has partly been that current rules do allow cross-border cooperation for the development of innovative products. […]
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4. February 2020  |   State Aid Uncovered by Phedon Nicolaides

How to Compensate for the Extra Cost of Public Service Obligations: Step-by-Step Guidance on a Complex Calculation
State Aid Blogs - StateAidHub blogpost5 SGEI
The “net avoided cost methodology” takes into account only incremental costs. Introduction The two most difficult issues in the design of State aid measures to support services of general economic interest [SGEI] are the proper definition of the public service obligation [PSO] and the identification of the “counterfactual” on the basis of which the public service compensation [PSC] is calculated. […]
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17. September 2019  |   State Aid Uncovered by Phedon Nicolaides

Sale of a Bank without State aid
State Aid Blogs - StateAidHub blogpost38 saleofbank
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 […]
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10. September 2019  |   State Aid Uncovered by Phedon Nicolaides

Individually Notified Regional Aid
State Aid Blogs -
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 […]
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3. September 2019  |   State Aid Uncovered by Phedon Nicolaides

Presumed v Actual Compatibility of State aid with the Internal Market
State Aid Blogs - StateAidHub blogpost36 GBER BMW
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 […]
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28. August 2019  |   State Aid Uncovered by Phedon Nicolaides

A Curious Case of Port Concessions
State Aid Blogs - StateAidHub blogpost35 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 […]
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20. August 2019  |   State Aid Uncovered by Phedon Nicolaides

Repayable Advances for Support of Research Projects
State Aid Blogs - StateAidHub blogpost34 RDI GBER
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 […]
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13. August 2019  |   State Aid Uncovered by Phedon Nicolaides

Aid to Providers of Local Services through Exclusive Contracts Can still Affect Cross-border Trade
State Aid Blogs - StateAidHub blogpost33 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 […]
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6. August 2019  |   State Aid Uncovered by Phedon Nicolaides

Transport: Airlines and Bus Operators
State Aid Blogs - StateAidHub blogpost31 Stateaid transport
For investment aid to the operator of an airport to be considered as indirect aid to airlines, there must be an inseparable link between the aid and beneficiary airlines. For a competitor to claim that it is harmed by State aid, it must prove that its position in the relevant market is substantially affected. Ensuring that the costs of public […]
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30. July 2019  |   State Aid Uncovered by Phedon Nicolaides

The Problem with Turnover Taxes
State Aid Blogs -
Economies of scale do not necessarily correlate with ability to pay. Introduction On Thursday, 11 July 2019, France became the first European country to adopt a tax on digital sales. At about the same time, President Donald Trump warned that the US would retaliate with punitive tariffs. The US believes that the tax is aimed at its internet giants such […]
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23. July 2019  |   State Aid Uncovered by Phedon Nicolaides

The Rights of Unsuccessful Bidders in the Auctioning of State Assets
State Aid Blogs - StateAidHub blogpost29 stateassets nuerburgring
Competitors of aid recipients may challenge a Commission decision only if State aid causes substantial harm to them. Assets must be sold to the highest bidder who makes a credible offer. Introduction If a public authority sells a state asset at a price below its market rate it grants State aid to the buyer. The market price is the highest […]
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16. July 2019  |   State Aid Uncovered by Phedon Nicolaides

Investor Protection and Existing Aid
State Aid Blogs - StateAidHub blogpost28 Investment Romania StateAid Commission EU Lexxion
Aid granted before accession to the EU may not be assessed by the Commission. Introduction It is fairly safe to say that in the sixty years of case law on State aid, the Court of Justice has ruled that there are just four instances in which payment of public money to an undertaking does not constitute State aid on the […]
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