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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13. December 2016  |   State Aid Uncovered by Phedon Nicolaides

Hungarian Advertisement Tax, Polish Retail Tax and Estonia Package Tax
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Progressive taxes can constitute State aid. Exemption from a packaging tax of packaged goods which are taken abroad is within the logic of the tax system.   Introduction This article reviews three tax measures which levied taxes on specific activities and products. In particular, they concern taxes on advertising, retail sales and an exemption from a tax on product packaging. […]
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6. December 2016  |   State Aid Uncovered by Phedon Nicolaides

Pensions, Public Statements and Private Investors
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The normal costs of an undertaking include all the costs of compliance with the obligations imposed by law. A private investor takes into account all the relevant information at the point in time it decides to invest.     Introduction This article reviews two court judgments both of which concern Orange, the French incumbent telecoms operator. The first judgment finds […]
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29. November 2016  |   State Aid Uncovered by Phedon Nicolaides

Media Plurality in Denmark
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State aid measures need not be open to all undertakings.   Introduction On 11 October 2016, the General Court rendered its judgment in case T-167/14, TSøndagsavisen v Commission.[1] Søndagsavisen requested annulment of Commission decision SA.36366 on a measure that had been notified by Denmark. The purpose of the measure was to support production and innovation in the newspaper and magazine sector […]
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23. November 2016  |   State Aid Uncovered by Phedon Nicolaides

No Affectation of Trade
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Public subsidies that do not affect cross-border trade either directly or indirectly do not constitute State aid in the meaning of Article 107(1). The direct trade effect is the impact on customers or users. The indirect trade effect is the impact on potential market entrants.   Introduction In April 2015, the Commission surprised us with seven decisions that concluded that […]
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15. November 2016  |   State Aid Uncovered by Phedon Nicolaides

Private Investor v Private Creditor
State Aid Blogs - 01.11.17 State aid
When the state, acting as a private investor, seeks to recover past public investments, it must aim to maximise the recoverable amount. However, public funds that were granted as State aid must be ignored when the recoverable amount of past investments is calculated.   Introduction On 15 September 2016, the General Court rendered its judgment in case T‑386/14, FIH Holding v […]
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8. November 2016  |   State Aid Uncovered by Phedon Nicolaides

1) Selectivity of Health Tests 2) Existing v New Aid in Preferential Electricity Tariffs
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A measure can be selective even if it applies to a whole sector. An existing aid measure becomes new when a court extends it temporarily.   Introduction This article reviews two judgments: one on BSE tests in Belgium and another on preferential electricity tariffs in Greece. The issue at hand with respect to the BSE test was whether a measure […]
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1. November 2016  |   State Aid Uncovered by Phedon Nicolaides

Turnover Taxes Can be Incompatible with the Internal Market
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Progressive taxes levied on turnover can provide State aid that is incompatible with the internal market. Flat turnover taxes are proportional and therefore likely to be free of State aid.   Introduction Hungary wanted to levy two types of turnover taxes whose purpose was to protect health. The first tax was levied on tobacco products.[1] The Commission found, in decision 2016/1846, […]
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25. October 2016  |   State Aid Uncovered by Phedon Nicolaides

Belgium’s Alternative Tax Regime for the Diamond Sector
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Alternative tax regimes do not provide State aid as long as they raise the amount of tax paid and they are justified by the nature or general scheme of the normal system of taxation.   Introduction During the past three years, the Commission has been pursuing multinational companies that pay too little tax. Its main objection to the tax treatment […]
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19. October 2016  |   Guest State Aid Blog by Gherardo Carullo

Right of Access and State Aid Procedures: a Look at the General Presumption of Confidentiality and the Overriding Public Interest in Case C-271/15, Sea Handling v Commission
airplane flying
Today we are glad to welcome Dr. Gherardo Carullo, research fellow and Ph.D. in law at University of Milan, LL.M. (King’s College London), to our State Aid Blog. He specialises in public law, from a national and European perspective, and in particular in State intervention in the markets, both in his academic studies and in the legal profession. In this […]
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18. October 2016  |   State Aid Uncovered by Phedon Nicolaides

Compliance with State Aid Rules in Cohesion Policy: A Special Report of the European Court of Auditors
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Control of State aid by national authorities needs to be strengthened. Typical mistake is to grant aid after a project has started or to subsidise ineligible costs. Aid measures for risk capital, SGEI and R&D appear to be particularly prone to error.    Introduction   On 4 October 2016, the European Court of Auditors [ECA] published a special report 24/2016 […]
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23. March 2016  |   State Aid Uncovered by Phedon Nicolaides

Compensatory Payments Can still Confer an Advantage
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Membership of a compulsory insurance scheme can still confer an advantage to participating undertakings. Private contributions can still become state resources if they are paid into a fund that is managed by the state. Member States always have the option to ask for a measure to be assessed directly on the basis of the Treaty but they have to justify […]
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15. March 2016  |   State Aid Uncovered by Phedon Nicolaides

a) Natural Disasters and b) Absolute Impossibility to Recover Incompatible State Aid
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Aid to remedy the damage caused by natural disasters can be granted only if the damage is the direct consequence of the disaster and the amount of aid must be limited to the actual damage suffered by each individual undertaking. Absence of documentary evidence can lead to absolute impossibility to recover incompatible aid.   Introduction Article 107(2) TFEU declares three […]
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8. March 2016  |   State Aid Uncovered by Phedon Nicolaides

When Infrastructure is not Public: Dedicated, Project-Specific and Bespoke
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Public funding of open and freely used infrastructure is not State aid. Public funding of project-specific, dedicated or bespoke infrastructure is State aid. Public funding of infrastructure connecting public and private parts may be State aid if the relevant national rules require developers to bear the cost.   Introduction The Commission has recently examined an infrastructure project in the vicinity […]
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1. March 2016  |   State Aid Uncovered by Phedon Nicolaides

How to Apply the Market Economy Investor Principle and what Mistakes to Avoid: The Long-running Case of EDF
State Aid Blogs - 17.10. imputability stateaid
A market investor carries out a thorough ex ante analysis of the prospects of an investment before it commits any money.     Introduction In 2004, the European Commission concluded, in decision 2005/145, that France granted incompatible aid to Electricite de France [EDF]. The French government had converted tax liability into share capital in EDF. The Commission was of the […]
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23. February 2016  |   State Aid Uncovered by Phedon Nicolaides

How to Determine the Selectivity of a Tax Measure
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A tax exception is normally a selective measure. However, exceptions which are open to all undertakings are not selective, even if they deviate from the standard tax rate or base. Exceptions which are open only to a few undertakings escape from being classified as selective only when the beneficiary undertakings are in a different legal or factual situation than non-beneficiaries. […]
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16. February 2016  |   State Aid Uncovered by Phedon Nicolaides

The Boundaries of Non-Economic Infrastructure and the Limits of the Funding Gap Method
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Public funding of assets which are used exclusively by certain undertakings constitutes State aid. If the state chooses to fund certain assets or activities, then it must do so consistently in all regions and in relation to all affected undertakings.   Introduction A typical mission of the state is to provide public goods. Normally public funding of public goods is […]
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9. February 2016  |   State Aid Uncovered by Phedon Nicolaides

Connecting Public and Private Infrastructure
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Public funding of public infrastructure is not State aid. Public funding of connections between public and private infrastructure is not State aid as long as it is open to all users and no fee is charged.   Introduction Last week’s article examined the use of a port facility. This week the focus is on a related issue: investment in port […]
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2. February 2016  |   State Aid Uncovered by Phedon Nicolaides

Possible Advantage from the Exclusive Use of Public-Funded Infrastructure
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The exclusive use of a public asset or an asset funded by public money may confer an advantage in the meaning of Article 107(1) TFEU if several competitors express their interest to use the same asset.   Introduction As public authorities are becoming more aware that placing public assets at the disposal of undertakings can involve State aid, they increasingly […]
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26. January 2016  |   State Aid Uncovered by Phedon Nicolaides

Nature Conservation as a Service of General Economic Interest
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Public funding of non-economic activities does not create State aid problems when any related economic activities are clearly separated. The 2012 SGEI package can apply retroactively.   Introduction Member States of the European Union are free to designate the services they consider to be in the general economic interest. However, the wide discretion they enjoy in this respect falls under […]
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19. January 2016  |   State Aid Uncovered by Phedon Nicolaides

Is there an Advantage when the State Pays for Compulsory Milk Tests?
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Undertakings obtain an advantage when the state pays for their normal costs. Normal costs are costs which are inherent in the operations of undertakings. The costs of meeting legal obligations are normal.   Introduction The case law on advantage in the meaning of Article 107(1) TFEU says that aid confers an advantage to undertakings when they obtain a benefit that […]
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