State Aid Uncovered Blog

Revenue from levies on electricity users is most likely to constitute State resources. Public service obligations can be transferred from one electricity-generating company to another. Compensation for public service obligations may distinguish between controllable and uncontrollable costs. Performance benchmarking can be used as a means for inducing efficiency. Electricity levies may not directly or indirectly discriminate against imported electricity. Introduction   This is a […]

Public authorities and the entities they control need to ensure that injection of public money in an undertaking must satisfy the market economy investor principle, otherwise it will be considered to be State aid. Public funding of an undertaking in difficulty has to be preceded by an ex ante assessment that can show that either the recipient will be turned around […]

The new GBER at a glance Common Provisions: aid must be transparent, must have incentive effect, rules on cumulation, and aid measures and awards must be published. Specific Provisions: Thirteen categories and many types of aid. Exclusions: no export aid, no mandated use of domestic products, no aid to firms in difficulty, no provisions that violate EU law, and no aid to […]

Activities which are part of the performance of public duties are non-economic in nature [e.g. spatial development]. Public funding of these activities does not constitute State aid. The transfer of resources from one level of government to another is transfer between public authorities and does not constitute State aid. Competitive selected developers obtain no advantage. Purchasers of subsidised assets who pay market prices […]

As more State aid measures in the future will be granted on the basis of the General Block Exemption Regulation, Member States will have to make the aid they grant more transparent. More transparency should prevent the granting of State aid that is incompatible with the internal market. However, Member States should also be assisted in identifying which public measures may contain […]

Public funding of a public-private partnership for the construction and maintenance of public schools may still involve State Aid. State Aid may have an incentive effect even when it is granted to a project that has already started. The funding gap method can demonstrate the necessity and proportionality of State Aid. Introduction   This article reviews Commission Decision SA.37168 concerning the construction […]

SGEI can be defined and public service obligations can be imposed only when the market underprovides. The parameters of compensation must be determined in advance. Public service compensation may not exceed the next extra costs of the SGEI or PSO. Member States are free to devise their own method of compensation, but irrespective of the method used, compensation must comply with the basic […]

The Commission is not obliged to quantify precisely the amount of aid that has to be recovered. The Member State that fails to recover incompatible aid or fails to recover all of it risks legal action against both before national and EU courts. The Commission may initiate infringement proceedings and request the Court of Justice to impose penalties against the failing Member […]

The imposition of a public service obligation must be preceded by market analysis that shows that the market underprovides. For compensation of public service obligations to be compatible aid, it must satisfy the first three Altmark criteria. Surprisingly, the first three Altmark criteria must also be satisfied [in addition to the 4th criterion] for public service compensation in order not to constitute […]

A market operator accepts to be bound in long-term contracts, which entail more risk because market conditions may change, only when he gets compensated with more certainty that costs will remain stable. Contractual clauses which vary from standard commercial practice are suspect. A measure can be selective even when it uses objective criteria to define eligible beneficiaries. Trade can be affected and competition […]