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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17. July 2018  |   State Aid Uncovered by Phedon Nicolaides

Danish Water Tax Exemption
State Aid Blogs - SAH Blogpost28 Water Tax Denmark
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 […]
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10. July 2018  |   State Aid Uncovered by Phedon Nicolaides

The 2017 Annual Competition Report
State Aid Blogs - Blog27 Annual Report
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 […]
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3. July 2018  |   State Aid Uncovered by Phedon Nicolaides

Revision of the GBER
State Aid Blogs - SAH Blog26 GBERd
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 […]
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25. June 2018  |   State Aid Uncovered by Phedon Nicolaides

Remedying the Damage of a Natural Disaster through Incentives for New Investments
State Aid Blogs - m 3 1
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 […]
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19. June 2018  |   State Aid Uncovered by Phedon Nicolaides

Sector-Specific Tax Exemptions
State Aid Blogs - SAH Blogpost 24 Seaports
A measure that covers a whole sector can be selective. Distortions caused by the policies of other Member States cannot justify the granting of State aid. The purpose of State aid is not to ensure equal conditions of competition across Member States.   Introduction On 31 May 2018, the General Court ruled in case T-160/16, Groningen Seaports v European Commission.[1] Groningen […]
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12. June 2018  |   State Aid Uncovered by Phedon Nicolaides

State Aid for the Deployment of Broadband Networks
State Aid Blogs - SAZ Blogpost 23 Broadband
Most State aid for the development of broadband networks is approved by the Commission. But the aid must be limited only to areas where market-based investments are unlikely to be made without aid.   Introduction   This article reviews a recent Commission decision authorising State aid for broadband development in the Netherlands which is one of the most networked countries […]
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5. June 2018  |   State Aid Uncovered by Phedon Nicolaides

The Extent of the Discretion of Member States to Define Services of General Economic Interest (SGEI)
State Aid Blogs - SAH Blogpost 22 SGEI
A service is classified as an SGEI not only when it is important for citizens but also when the market does not adequately supply it and one or more undertakings are compelled to provide it to specified consumers, in specified areas and on specified terms.   Introduction   The Treaty on the Functioning of the EU and the case law […]
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29. May 2018  |   State Aid Uncovered by Phedon Nicolaides

Exemptions from Product-Specific Taxes
State Aid Blogs - SAH Blogpost 21 Product Tax
Tax exemptions do not constitute State aid when they aim to induce change in the behaviour of consumers, when they distinguish between harmful products and non-harmful products and for reasons of administrative simplicity.   Introduction   In the past two weeks, an article was published in two parts criticising the judgments of the Court of Justice in three cases of […]
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22. May 2018  |   State Aid Uncovered by Phedon Nicolaides

Exemption from Taxes that Protect the Environment May not be Selective – Part II
State Aid Blogs - victor xok gFjGZ2qRZOo unsplash
Member States have discretion to impose taxes that penalise environmentally harmful activities. Exemption of undertakings whose activities do not harm the environment does not constitute State aid whenever the exempted undertakings are not in a comparable situation.   Application of Article 107(1) to the Asturias tax   In this case, exempted establishments were those with sales area less than 4000m2 or […]
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15. May 2018  |   State Aid Uncovered by Phedon Nicolaides

Exemption from Taxes that Protect the Environment May not be Selective – Part I
State Aid Blogs - 14.05.18 Part1 Blog19 Spain Regional Tax
Member States have discretion to impose taxes that penalise environmentally harmful activities. Exemption of undertakings whose activities do not harm the environment does not constitute State aid whenever the exempted undertakings are not in a comparable situation.   Application of Article 107(1) to the Asturias tax   In this case, exempted establishments were those with sales area less than 4000m2 or […]
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21. December 2017  |   State Aid Uncovered by Lexxion Publisher

Top 5 State Aid Uncovered Posts in 2017
State Aid Blogs - m 1 2
Questions around grants for R&D&I projects, economic activities of religious establishments or concession agreements besides many more, have moved and shaped this year’s judgments on State aid. Also Brexit and its meaning for State aid control in the UK has been on everyone’s mind. See which articles by Prof. Phedon Nicolaides were the most popular ones in 2017. We have […]
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19. December 2017  |   State Aid Uncovered by Phedon Nicolaides

Sport and Trade
State Aid Blogs - m 2 2
State aid has a purely local impact when i) the beneficiaries supply goods or services to a limited area within a Member State, ii) they are unlikely to attract customers from other Member States and iii) there is no inducement for cross-border investment or establishment.   Introduction The article this week continues with the theme of affectation of trade that […]
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12. December 2017  |   State Aid Uncovered by Phedon Nicolaides

How to Determine whether State Aid Affects Trade
State Aid Blogs - 12.12.17cross border trade StateAid
Article 107(1) requires the assessment of both the direct and indirect impact of a public measure on cross-border trade. The direct impact is the effect on the cross-border movement of products or customers of the aid recipient or of its competitors. The indirect impact is the effect on the cross-border movement of the aid recipient itself or its competitors.   […]
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5. December 2017  |   State Aid Uncovered by Phedon Nicolaides

Imputability of an Aid Measure to the State Does not Require a Counterfactual
State Aid Blogs - 05.12.Imputability of Aid State aidz
The fact that the state owns an undertaking is not enough to prove that the decisions of that undertaking can be attributed to the state. However, it is sufficient that the state was involved in the particular decision that transferred state resources for the benefit of another undertaking.   Introduction Several recent articles on this blog have examined the concept […]
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30. November 2017  |   State Aid Uncovered by Phedon Nicolaides

The Legal Basis of the (In)compatibility of Aid Must be Clear
State Aid Blogs - m 3 2
The European Commission may withdraw a decision, but before it adopts a new decision it must give an opportunity to interested parties to submit their comments, especially, if it changes the legal basis of the assessment of the compatibility of the aid.   Introduction The most frequent reasons for which the Commission finds aid to be incompatible with the internal […]
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21. November 2017  |   State Aid Uncovered by Phedon Nicolaides

i) Transfer of State Resources, ii) Non-recovery of Incompatible Aid, iii) Primacy of Agricultural Policy over Competition Policy
State Aid Blogs - 21.11.State resources State control
Private resources that come under the control of a public authority become state resources. The only defence for not recovering incompatible aid is absolute impossibility. Agricultural policy objectives take precedence over those of competition policy. Introduction This article reviews a case involving transfer of state resources and a case concerning failure to recovery of incompatible State aid. It also draws […]
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14. November 2017  |   State Aid Uncovered by Phedon Nicolaides

Existing v New Aid
State Aid Blogs - m 4 1
Any alteration of an existing aid measure can affect the substance of the measure itself. A deviation from the conditions of authorisation may turn existing aid into new aid. Alteration or deviation from the conditions of authorisation that affect the compatibility of an existing aid measure, can result in the granting of new aid. A Member State that alters an […]
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7. November 2017  |   State Aid Uncovered by Phedon Nicolaides

Indirect v Secondary Effects of State Aid
State Aid Blogs - 07.11.sardinia airport State aid
The prohibition of State aid in Article 107(1) of the Treaty applies both to the direct and indirect beneficiaries of aid. The direct and indirect beneficiaries are those who are intentionally targeted by the aid. Secondary effects are benefits which are inherent in an aid measure and which are not targeted at specific undertakings.   Introduction Public funding for the […]
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1. November 2017  |   State Aid Uncovered by Phedon Nicolaides

Activities Linked to State Prerogatives
State Aid Blogs - 01.11.17 State aid
Economic activities which cannot be separated from the exercise of public powers cease to be economic in nature.   Introduction The dividing line between economic and non-economic activities is in a permanent state of flux. Although it is now clear that some activities fall within the powers and prerogatives of the state, while many others are carried out by the […]
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24. October 2017  |   State Aid Uncovered by Phedon Nicolaides

Private Creditor Test
State Aid Blogs - SAH Blog26 GBERd
The Commission must apply the private creditor test even if a Member State does not request it or believes that it is not relevant.   Introduction Private investors always have two options: to invest or not to invest. They choose the option that generates the largest amount of profit or revenue. Similarly, private creditors also have two options: call in […]
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