Europäisches Beihilfenrecht Blog

State Aid Uncovered Blog

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

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, […]

Infrastructure Projects, State Guarantees and Distortion of Competition

State guarantees must be limited in duration and amount and the conditions for their mobilization must be defined in advance. Public funding to an operator in a closed sector does not affect trade and, therefore, does not constitute State aid.   Introduction Large infrastructure projects are complex, encounter many unforeseen problems and often fall behind schedule for years. Consider, for […]

The Definition of the Reference Tax System is still a Puzzle

A selective measure should be determined on the basis of its effects, not on the basis of the legally defined regulatory techniques.   Introduction A tax measure is selective in the meaning of Article 107(1) TFEU when it basically deviates from the normal tax system. In the case of a tax reduction or a tax exemption the normal system is […]

Danish Water Tax Exemption

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 […]

The 2017 Annual Competition 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 […]

Revision of the GBER

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 […]

Remedying the Damage of a Natural Disaster through Incentives for New Investments

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 […]

Sector-Specific Tax Exemptions

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 […]

State Aid for the Deployment of Broadband Networks

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 […]

The Extent of the Discretion of Member States to Define Services of General Economic Interest (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 […]

Exemptions from Product-Specific Taxes

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 […]

Exemption from Taxes that Protect the Environment May not be Selective – Part II

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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