Europäisches Beihilfenrecht Blog

State Aid Uncovered by Prof Phedon Nicolaides

In Lexxions Blog „State Aid Uncovered” veröffentlicht Prof. Phedon Nicolaides wöchentlich kritische Analysen zu den neuesten Urteilen und Entscheidungen zu staatlichen Beihilfen. Jeder Beitrag stellt die wichtigsten Punkte eines Gerichtsurteils oder einer EU-Kommissionsentscheidung vor, ordnet sie in den Kontext ähnlicher Rechtsprechung oder Praxis ein, bewertet die zugrundeliegende Argumentation und zeigt etwaige Ungereimtheiten oder Widersprüche auf.

In loser Folge werden auf diesem Blog auch Gastbeiträge von anderen Experten für staatliche Beihilfen veröffentlicht, welche die Inhalte der Blogbeiträge ergänzen.

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Professor at Maastricht University; Professor at University of Nicosia, and Academic Director at Lexxion Training

No Effect on Trade

A public measure of purely local character and which does not induce cross-border movement of investors or clients is unlikely to affect trade between Member States. Introduction It is rare to find a judgment that confirms that a particular public measure is not liable to affect trade between Member States. The General Court did so in its judgment of 19 […]

Natural Disasters and State Aid

Compensation for damage suffered by undertakings as a result of a natural disaster constitutes State aid. The compensation is compatible with the internal market only if, first, there is a causal relationship between the natural disaster and the damage and, second, the amount of compensation does not exceed the amount of the damage. Introduction Financial assistance in the form of […]

Research Organisations, their Primary Objectives and their Shareholders

A research organisation is not required to reinvest any revenue it may generate into its non-economic activities. The fact that the shareholders of a research entity are profit seeking has no decisive impact on its classification as a research organisation. Introduction As governments push universities to engage in more collaborative research with industry, the question increasingly arises where to draw […]

State Aid in Contracts to Provide Services

The continuation of beneficial arrangements after the expiry of a service contract constitutes State aid. The practice of not charging for the use of public assets constitutes State aid. Introduction On 7 September 2022, the General Court ruled, in case T-642/19, JCDecaux v European Commission, that the free use of public infrastructure for profit confers and advantage in the meaning […]

Public Authorities Acting as Private Investors

It is a well-established principle in the case law that when a public authority acts as a private investor, it must disregard all public policy objectives and its obligations as an arm of the state. Many judgments of EU courts and Commission decisions have examined in detail the various elements that underpin the reasoning of a private investor such as […]

Selectivity of Regional Schemes

Introduction Article 107(3)(a) areas and the outermost regions of the EU [defined in Article 349 TFEU] are more favourably treated under State aid rules. But they still have to comply with the terms of Commission authorising decisions. In case regional State aid is found to be incompatible with the internal market, their regional handicaps cannot justify any leniency in the […]

Recovery of Incompatible Aid and the Application of General Provisions for the Avoidance of Double Taxation

The amount of incompatible State aid that has to be recovered can be reduced by any credit the aid recipient could have legally obtained from the application of general provisions of national law. Introduction The recovery of incompatible State aid has to be carried out immediately and effectively. The Commission gives guidance to the Member State concerned how to calculate […]

Compliance with Public Service Obligations Does Not Necessarily Entitle the Providers of Public Services to Compensation

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In the field of bus or rail transportation, Member States may impose either public service obligations through a contract or regulate prices through general rules. Providers of transport services are entitled to compensation only if they are financially worse off as a result of compliance with public service obligations. Introduction It is now a well-established principle in the case law […]

An Innovative Scheme to Support Individual Borrowers

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Individuals and households are not undertakings. However, any public funding of individuals or households may constitute indirect aid to undertakings. Such aid may be exempted on the basis of Article 107(2)(a) TFEU. Introduction Article 107(1) TFEU applies to indirect State aid as well as to direct aid. Since all State aid has both primary effects [i.e. the benefits that go […]

State Aid for External Transport Costs

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State aid may be granted to reduce the difference in “external” costs caused by different modes of transport. Introduction Member States have used money from the Recovery and Resilience Fund [RRF] to support the development of less polluting and more energy efficient activities and technologies. A case in point is Spain’s scheme that incentivises the transfer of freight traffic from […]

Compensation for the Net Cost of Public Service Obligations (Part I)

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Public service obligations must be imposed through an act of entrustment that defines clearly the terms of the service and the duration of the obligation. The “reasonable profit” in the public service compensation should reflect the risk borne by the provider. Introduction In 2009, the Commission received several complaints concerning State aid that Italy had granted to the various shipping […]

Legal Standing of Competitors

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A Commission decision authorising or prohibiting a state aid measure that can be implemented without any intermediate rules is a “regulatory act” that can be challenged by “directly concerned” undertakings. Introduction Any natural or legal person who is the addressee of an act of an EU institution can challenge that act before EU courts. This is a right that is […]

Economic Activities of a Research Organisation (Part II)

Introduction Member States use extensively the GBER to support R&D schemes. If we exclude the measures that were implemented in the context of covid-19 and now those which are financed by the recovery and resilience fund, not more than a dozen measures have been notified to the Commission for prior approval since 2014. Therefore, it was rather unusual that in […]

Economic Activities of a Research Organisation (Part I)

The revenue from the economic activities of a research organisation must cover the full cost of those activities. Introduction Member States use extensively the GBER to support R&D schemes. If we exclude the measures that were implemented in the context of covid-19 and now those which are financed by the recovery and resilience fund, not more than a dozen measures […]

The State Behaving Like a Private Land Owner

A private land owner changes rent at market rates. But it may accept lower rent if the user of the land incurs costs to improve it. Comparative analysis to determine the market value of land must take into account not only the particularities of the various land plots, but also the particularities of the various rental contracts. Introduction When the […]

State Guarantees without State Aid

Introduction State guarantees may constitute State aid if they are not priced at market rates. A properly priced guarantee reflects the risk assumed by the public authority that issues it and the collateral, if any, that the beneficiary undertaking can pledge. The State aid that is embedded in a guarantee that is priced below the relevant market rate is operating […]

Why Grant a Loan to an Undertaking in Difficulty?

When a market operator invests in an undertaking in difficulty it also considers the possibility of restructuring, sale or closure. Introduction The answer to the question posed in the title of this article is “because the loan enables the undertaking to become viable again and repay the loan with interest”. It is now well established in the case law that […]

Individual Aid to Counter the Effects of Serious Economic Disturbance Is Legally Possible, but Is it Appropriate?

Individual aid need not be capable itself to remedy serious economic disturbance in the economy of a Member State. It is sufficient that it contributes to that effect. Introduction On 22 June 2022, in case T‑657/20, Ryanair v European Commission, the General Court confirmed once more that Member States have a right to grant State aid to the undertakings of […]

The Date on which State Aid is Deemed to be Granted Is not necessarily the Date on which the Actual Benefit Materialises

State aid is deemed to be granted even if the benefit cannot be quantified in advance and even if state resources are transferred at a future point in time. Introduction The precise date on which State aid is granted can be important such as, for example, when calculating the present value of aid granted in tranches at different points in […]

Territoriality and the Tax Treatment of Intra-group Transactions

A special tax rule can constitute the reference or normal system of taxation if it is “severable” from other tax rules and has its own legal logic. Introduction The application of State aid rules to the tax treatment of transactions between companies that belong to the same multinational group is contentious. During the past three years or so, the Commission […]

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