Discretion in the form of intervention can remove it from the control of the state. Introduction Suppose a thug puts a gun to your head and demands your wallet. Because you have sentimental photos in your wallet, you offer instead the keys to your car. You would rather lose the car than the wallet. Can the thug claim in […]
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.
9. April 2019 |
State Aid Uncovered
by Phedon Nicolaides
3. April 2019 |
State Aid Uncovered
by Phedon Nicolaides
Public funding of functionally and commercially severable parts of an infrastructure project may have incentive effect even after construction is completed on some of the parts. A subsidy for the operation of a toll motorway may not constitute State aid. Introduction State aid granted to a project that has already started lacks incentive effects and, therefore, cannot be found […]
26. March 2019 |
State Aid Uncovered
by Phedon Nicolaides
Assurances from granting authorities cannot guarantee the legality of State aid. Aid recipients must verify that the aid is granted correctly. Introduction The Commission must stop its misguided policy of not making public the answers it provides to Member States on questions of interpretation of the General Block Exemption Regulation [GBER]. This is one of the consequences of a […]
19. March 2019 |
State Aid Uncovered
by Phedon Nicolaides
The autonomy that Member States enjoy in the field of direct taxation must be exercised in compliance with EU State aid law. A State aid measure is considered to be a “scheme” when (a) no further implementing acts are necessary, (b) the granting authority has no discretion in how the measure is applied and (c) the measure defines the eligible […]
13. March 2019 |
State Aid Uncovered
by Phedon Nicolaides
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 […]
5. March 2019 |
State Aid Uncovered
by Phedon Nicolaides
The price should not cover more than 50% of the costs. Introduction An entity that does not make profit can still be an undertaking. However, an entity that charges a fee for its services is not necessarily an undertaking. The EU Court of Justice has never defined how low such a fee must be in order for that entity to […]
27. February 2019 |
State Aid Uncovered
by Phedon Nicolaides
State aid may affect trade even when the market concerned is not liberalised. This can happen when the aid recipient also has operations outside that market, which it can cross-subsidise. Claims for damages caused by illegal aid must be accorded the same treatment under national law as any other claim resulting from faulty decisions of the state. Introduction A […]
19. February 2019 |
State Aid Uncovered
by Phedon Nicolaides
Public assistance to households to pay for their mortgages is not State aid. Public assistance to enterprises to pay for their loans may be qualified as de minimis aid. Public assistance to households and de minimis aid to enterprises to pay for their loans are indirect aid to banks, which, however, falls outside the directive on bank recovery and resolution […]
14. February 2019 |
State Aid Uncovered
by Phedon Nicolaides
A private investor may invest in a troubled company that is restructuring is order to increase its future profitability. Introduction The answer to the question posed above is short and simple: everything relevant. A private investor does not ignore anything that can affect the profitability of the prospective investment.This implies that the other side of the coin is […]
12. February 2019 |
State Aid Uncovered
by Phedon Nicolaides
When comparing the behaviour of public and private creditors, it is necessary to ensure that their situations and interests do not diverge over time. Introduction When an undertaking owes money to a public authority the latter must use all available legal means to recover the money, including the liquidation of the undertaking and the sale of its assets. […]
4. September 2018 |
State Aid Uncovered
by Phedon Nicolaides
State aid does not have to be awarded on the basis of a competitive procedure, unless the relevant rules require it. Secondary legislation may allow Member States to make direct awards without a prior competitive procedure. Public procurement rules do not apply to awards between contracting authorities. Introduction Public procurement and State aid rules have the same basic […]
28. August 2018 |
State Aid Uncovered
by Phedon Nicolaides
Compensation for the provision of public services may not exceed the avoidable cost minus any forgone revenue from not having to provide those services. The VAT exemption for postal services is not State aid because it is laid down in the EU VAT directive and therefore cannot be attributed to Member States. Introduction This article reviews Commission decision on […]
21. August 2018 |
State Aid Uncovered
by Phedon Nicolaides
Closer cooperation between Commission services and Member States. Introduction The European Commission, DG Competition, published on 16 July 2018 on its website and then on 19 July 2018 in the Official Journal of the EU a Code of Best Practices for the Conduct of State Aid Control Procedures.[1]The purpose of the Code is to provide guidance to Member […]
13. August 2018 |
State Aid Uncovered
by Phedon Nicolaides
After its withdrawal from the EU, the UK is likely to maintain a State aid regime that is similar to that of the EU. Introduction In seven months’ time, on 29 March 2019, the UK will leave the EU. But its withdrawal from the EU will not bring to an end compliance with EU rules. The UK is […]
7. August 2018 |
State Aid Uncovered
by Phedon Nicolaides
Failure to comply with just a single provision of an exemption regulation results in the non-applicability of the whole regulation and makes any implemented aid measure automatically illegal. The compatibility of aid measures adopted in the past but continuing having effects are assessed not on the basis of old rules but on the basis of the rules which are applicable […]
27. July 2018 |
State Aid Uncovered
by Phedon Nicolaides
A selective measure should be determined on the basis of its effects, not on the basis of the legally defined regulatory techniques. Introduction A tax measure is selective in the meaning of Article 107(1) TFEU when it basically deviates from the normal tax system. In the case of a tax reduction or a tax exemption the normal system is […]
17. July 2018 |
State Aid Uncovered
by Phedon Nicolaides
A selective tax reduction does not constitute State aid if it does not confer an advantage that is proportionately larger than the magnitude of the tax reduction. A complete exemption of insignificant amounts of the taxable volume can be justified on the grounds of reducing administrative burden. Introduction Member States enjoy wide discretion to levy taxes on […]
10. July 2018 |
State Aid Uncovered
by Phedon Nicolaides
Introduction On 18 June 2018, the European Commission published its Annual Report on Competition Policy for 2017.[1] As usually, the Annual Report is accompanied by a Staff Working Paper that has almost four times as many pages as the Annual Report and provides more details on developments in all areas of competition policy, including State aid.The pre-eminent role of the […]
3. July 2018 |
State Aid Uncovered
by Phedon Nicolaides
Block exemption of new financial instruments. Introduction The Commission has recently published a proposal for amendment of Council Regulation 2015/1588[1] which authorises the Commission to adopt block exemption regulations. The purpose of the Commission’s proposal is to expand Article 1 of Regulation 2015/1588. This Article lists the categories of aid that may be declared compatible with the internal market.The […]
25. June 2018 |
State Aid Uncovered
by Phedon Nicolaides
Damage from natural disasters can be remedied in the short-term through direct compensation or in the longer-term through investment subsidies to support new productive capacity. Introduction This article reviews a rather straightforward case which, however, is also quite unusual. It concerns a measure to remedy the effect of recent earthquakes in Italy. What makes it unusual is that […]