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Ulrich Soltész and Isabel Taylor

Gleiss Lutz and Slaughter and May

Monday 08 July 2019


EU state aid rules in legal practice

In recent years, EU state aid rules have become increasingly important for all private practitioners. They play a role in all kinds of areas, such as taxation, finance, mergers and acquisitions, public-private partnerships, corporate, R&D agreements, infrastructure, transport, real estate, public procurement, energy and environmental law. The ever-growing importance of EU state aid law can be highlighted by the numerous investigations by the European Commission concerning tax rulings in various member states targeting multinationals (eg, Starbucks, Apple and Fiat) or the formal proceedings into various state measures in the field of energy, ranging from the financing of nuclear power stations to the support for renewable energy sources.

Over the past decades, the Commission has developed an increasingly active concept of its role as a guardian of the state aid rules. Competition Commissioners Karel Van Miert, Mario Monti, Neelie Kroes and Joaquín Almunia have successively intensified the control of state aid measures and strengthened the enforcement of negative decisions and recovery orders concerning illegal aid. The current Commissioner, Margrethe Vestager, also seems to be following this trend and has made state aid control one of her key priorities. This general trend (ie, the increasing importance of state aid law) is unlikely to change in the foreseeable future.

Today, state aid law penetrates numerous areas of life, from state-financed infrastructure (airports, football clubs) and public services of general interest (public banks, railways, hospitals, broadcasting) to the acquisition and disposal of public assets, in particular through privatisation. The ever-growing importance of EU state aid rules became particularly apparent during the financial crisis, when state aid became the de facto vehicle through which the European Commission sought to ensure a level playing field between member states and, consequently, through which large parts of the European banking sector were restructured. In recent years the Commission has particularly focused on state aid through the taxation regimes of member states and in the energy sector. It is interesting to note, however, that the Commission has recently suffered some significant defeats in these fields before the EU courts, in particular concerning the tax-related decisions in the Belgian excess profits scheme and the Spanish football clubs as well as in the decision on the German renewable energy law. Some observers expect that these judgments could cool the Commission’s courage, but it remains to be seen whether this will be the case.

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