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

Enforcement of State Aid Rules by National Courts

Private enforcement has increased, but damages for illegal granting of State aid have been successfully claimed in just one case. Introduction   According to the annual competition report that was published in July, Member States use the GBER to implement 96% of their new aid measures.[1] This impressive outcome should be seen in conjunction with the recent rulings of the Court […]

“Invest-NL”: A New Promotional Bank

A state-owned promotional or development bank can pursue public policy objectives and also invest on terms which are acceptable to private investors. Introduction During the past decade or so several Member States have established “promotional” or “development” banks for the purpose of investing where the market does not. Private investors may be reluctant to commit their money for a variety […]

Sale of a Bank without State aid

The sale must be open, transparent, non-discriminatory, unconditional and the winning bid must be the offer with the highest price. Introduction The German HSH Nordbank used to be the largest provider of ship finance in the world. It had commercial presence in over 20 major financial centres. Before the outbreak of the financial crisis in 2008, HSH Nordbank had a […]

Individually Notified Regional Aid

All individual awards of aid granted to the same project over a three-year period have to be counted together and remain below the maximum allowable aid intensity in relation to the sum of eligible costs. Introduction Hungary operates an aid scheme that offers tax credits to encourage regional investment. The scheme has been implemented on the basis of the GBER […]

Presumed v Actual Compatibility of State aid with the Internal Market

State aid granted on the basis of the GBER may not be considered as authorised by the Commission. The task of Member States is to ensure that all of the requirements of the GBER are fulfilled. In particular, Member States must confirm the incentive effect of aid to large enterprises. Introduction[1]   In March 2019, the Court of Justice delivered […]

A Curious Case of Port Concessions

The obligations of a concessionaire may be made less onerous in order to enable it to remain in operation. Any adjustment of the obligations takes into account the possible legal defences of the concessionaire. Introduction The Market Economy Investor Principle [MEIP] is a powerful concept. Its many variations attest to its versatility [e.g. market economy investor, operator, vendor, creditor]. It […]

Repayable Advances for Support of Research Projects

The amount of State aid in a repayable advance to support research projects is the difference between the return a private investor would demand and the actual return for the funding authority. Introduction According to the staff working paper accompanying the 2018 annual competition report that was published on 15 July 2019, 95% of all State aid measures supporting R&D […]

Aid to Providers of Local Services through Exclusive Contracts Can still Affect Cross-border Trade

An exclusive contract can affect cross-border trade if the awarding authority has the option to use a competitive selection procedure. Aid to the operator of a legal monopoly may affect trade if the operator can cross-subsidise activities outside the area of the monopoly. Introduction A perennial question is whether aid to providers of local services can affect cross-border trade. Given […]

Transport: Airlines and Bus Operators

For investment aid to the operator of an airport to be considered as indirect aid to airlines, there must be an inseparable link between the aid and beneficiary airlines. For a competitor to claim that it is harmed by State aid, it must prove that its position in the relevant market is substantially affected. Ensuring that the costs of public […]

The Problem with Turnover Taxes

Economies of scale do not necessarily correlate with ability to pay. Introduction On Thursday, 11 July 2019, France became the first European country to adopt a tax on digital sales. At about the same time, President Donald Trump warned that the US would retaliate with punitive tariffs. The US believes that the tax is aimed at its internet giants such […]

How Can Incompatible State Aid Be Passed-on from one Company to another to Avoid Recovery?

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 […]

How Much May a Non-Economic Entity Charge without Becoming an Undertaking?

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 […]

EU Rules do not Impose a Time Limit on the Power of National Courts to Deal with Non-notified Aid

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 […]

Support for Non-Performing Loans in Cyprus

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 […]

What Does a Private Investor Take into Account before Investing?

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 […]

Pari Passu Is not Static

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. […]

Services of General Economic Interest: Proper Definition and Avoidance of Overcompensation

Member States need to demonstrate that public service obligations imposed on undertakings are necessary and proportional to the need for public service. A change in the funding of public services does not constitute new aid if it does not alter its objectives, the beneficiaries or the amount of aid by more than 20%.   Introduction It is a well-established principle […]

The Private Investor Principle in Air Transport – Part II

Public funds managed by private airport operators can be classified as state resources. Prices charged by airport operators can be used as a benchmark for market prices only if their activities and size are comparable and their costs are not subsidised by State aid. Before a private investor enters into any commercial arrangement, it takes into account all relevant information, […]

The Private Investor Principle in Air Transport – Part I

Public funds managed by private airport operators can be classified as state resources. Prices charged by airport operators can be used as a benchmark for market prices only if their activities and size are comparable and their costs are not subsidised by State aid. Before a private investor enters into any commercial arrangement, it takes into account all relevant information, […]

Justification of a Tax Exemption

Prevention of excessive taxation may justify tax exemption. Prevention of abuse may justify limits to the tax exemption.   Introduction   A tax exemption may not constitute state aid if it is justified by reasons which are linked to the nature or general scheme of the tax system. This is what the Court of Justice said on 19 December 2018, […]

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