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Do Member States Grant State Aid When They Act as Regulators? journal article

Phedon Nicolaides

European State Aid Law Quarterly, Volume 17 (2018), Issue 1, Page 2 - 18

When Member States act as regulators, they need not maximise revenue from the granting of permits, licences or concessions rights. However, they must grant permits, licences or concession rights on the basis of procedures which are open, transparent, non-discriminatory and unconditional. This article argues that qualitative selection criteria may not in fact support the effective achievement of the stated regulatory objectives and, as a result, they may confer an advantage and transfer State resources to the chosen undertakings. Since the concept of State aid does not depend on policy aims or intentions, the regulatory objectives of the authority that grants the exclusive permits, licences or concessions should be irrelevant. EU law does not prevent Member States from using procedures that can aim simultaneously at revenue maximisation and achievement of public policy objectives. Keywords: Competitive Selection; Regulation; Non-Discrimination.


ARTICLES ∙ Excessive Widening of the Concept of Selectivity journal article

Phedon Nicolaides

European State Aid Law Quarterly, Volume 16 (2017), Issue 1, Page 62 - 72

This article argues that different treatment of companies resulting from the application of different rules is not selective as long as any company has the option to choose the rule. A measure should be considered selective when it reserves different treatment only for certain companies. The article applies this reasoning to the judgment of the Court of Justice in the World Duty Free judgment of 21 December 2016 and concludes that the Court of Justice has widened excessively the concept of selectivity. The widening is excessive because it applies to otherwise general tax measures that offer options to companies to reduce their tax liability by carrying out particular activities. Keywords: Selectivity; Taxation; Goodwill.


What is Normal? journal article

Phedon Nicolaides

European State Aid Law Quarterly, Volume 16 (2017), Issue 2, Page 146 - 153

A question that is often asked is whether companies derive an advantage in the meaning of Article 107(1) TFEU if they receive compensation for the extra costs they incur when they have to provide services as a result of obligations imposed on them by the State. The answer given in the case law is that no advantage is obtained when such compensation satisfies the so-called “Altmark” conditions. Recently, however, the General Court and the Court of Justice have provided contradictory answers in relation to compensation for the extra costs of pension obligations towards former civil servants. While the Court of Justice followed the consistent approach of the case law, the General Court considered that the extra costs incurred by Deutsche Post, the undertaking in question, were not normal because such costs were not borne by other postal operators. This article argues that the reasoning of the General Court is defective or at least incomplete because it failed to take into account the total employment costs of Deutsche Post from employing former civil servants and whether it could have enjoyed other advantages from their employment. Keywords: Advantage; Normal Costs; Distortion of Competition; Compensation.


Manufacturing in Small Peripheral Island States: Where is the Level Playing Field? journal article

Caroline Buts, Phedon Nicolaides

European State Aid Law Quarterly, Volume 16 (2017), Issue 2, Page 272 - 275

While many islands can be attractive tourist destinations, other parts of the economy often face serious challenges that are the direct result of natural and permanent handicaps. Small islands encounter difficulties in attracting and maintaining manufacturing activities. Additional transport costs as well as the absence of economies of scale and low connectivity can result in investment decisions on the mainland, rather than the island. Multiple policies exist to help islands balance out the disadvantage of being remote, small or sparsely populated. Nevertheless, the State aid rules treat small and remote islands differently, depending on whether they are a region or a Member State. After briefly reviewing the main difficulties encountered by islands, we study the case of Malta. Next, the relevant State aid rules are evaluated, revealing inconsistencies and the need for revisions with important consequences for Malta and Cyprus. Keywords: Regional State Aid; Peripheral Islands; Island States; Transport Costs; Industrial Base.


Not Even the Church Is Absolved from State Aid Rules: The Essence of Economic Activity journal article

Phedon Nicolaides

European State Aid Law Quarterly, Volume 16 (2017), Issue 4, Page 527 - 536

The boundaries of the concept of economic activity are constantly shifting. This paper examines the case of schools run by the church and funded by the State. The Court of Justice concluded that wholly State-funded education is not economic in nature. The paper criticises this approach of the Court. The source of funding should not have been the decisive criterion, for the simple reason that State aid to enterprises is also provided by the State. The decisive criterion should have been whether the purpose of the funding was to support an activity which was intended to be offered for remuneration. Keywords: Economic Activity; State Resources; Public Education.


The Pricing of Access to Publicly-Funded Research Infrastructure and State Aid Rules journal article

Phedon Nicolaides

European State Aid Law Quarterly, Volume 15 (2016), Issue 1, Page 9 - 15

The new rules on State aid for R&D&Innovation introduce significant clarifications on the concept of R&D that does not constitute economic activity and the conditions under which public funding of non-economic activities can be combined with State aid to economic activities. This paper provides examples of how R&D services of research organisations and access to research infrastructure can be priced so that State aid to users is avoided. Keywords: GBER, R&D&I Framework, Research Infrastructure.


State Aid Rules and Tax Rulings journal article

Phedon Nicolaides

European State Aid Law Quarterly, Volume 15 (2016), Issue 3, Page 416 - 427

This article reviews the use by the Commission of the arm’s length principle to determine whether advance tax rulings constitute state aid. It argues that the benchmark of “market-based outcomes” is not relevant for group companies. It also argues that the derivation of “market-based outcomes” is an inherently subjective and therefore selective process. Keywords: Advance Tax Rulings; Arm’s Length Principle; Selective Advantage.


What is the Relevant Price for Determining the Existence of State Aid to Operators and Users of Infrastructure? journal article

Phedon Nicolaides

European State Aid Law Quarterly, Volume 15 (2016), Issue 2, Page 239 - 246

This article examines whether operators and users of subsidised infrastructure receive indirect State aid. The practice of the Commission appears to be inconsistent. Normally, competitively selected operators and users who pay a “market” price are presumed not to benefit from State aid. This article argues that indeed the competitive process eliminates any undue advantage for operators. It also argues that it is difficult to determine what constitutes a market price given that any subsidy influences the price that users pay. In general, users always derive a benefit. However, this benefit does not constitute State aid. Keywords: Infrastructure; Pricing of Access; Advantage for Operators.


The Concept of ‘Advantage’ in State Aid and Public Procurement and the Application of Public Procurement Rules to Minimise Advantage in the New GBER journal article

Phedon Nicolaides, Sarah Schoenmaekers

European State Aid Law Quarterly, Volume 14 (2015), Issue 1, Page 143 - 156

This paper examines the case law on the concept of advantage in the field of State aid and in the field of public procurement. It identifies the similarities and the differences between the two fields. Then it uses the results of this analysis to examine how ‘competitive selection procedures’ may either eliminate advantage or minimise advantage in the context of the measures adopted on the basis of the new General Block Exemption Regulation – Regulation 651/2014. In some cases the provisions in the GBER on competitive selection lead to elimination of State aid while in others they minimise advantage and therefore ensure the proportionality and compatibility of State aid. Keywords: Advantage, GBER, Market Economy Investor Principle, Private Investor Principle, Public procurement.


Greece v Commission ∙ Case T-425/11 ∙ Annotation by Phedon Nicolaides journal article

Annotation on the Judgment of the General Court of 11th of September 2014 in Case T-425/11, Greece v European Commission

Phedon Nicolaides

European State Aid Law Quarterly, Volume 14 (2015), Issue 1, Page 157 - 160

The General Court annulled the Commission Decision 2011/716 finding that certain Greek casinos had received aid that was incompatible with the internal market. Keywords: Advantage, Casinos, Price regulation.