State aid – one form of government assistance – is essential for the survival of many companies. Low-interest loans, financial assistance, collaterals, guarantees and shareholdings that help maintain companies’ liquidity are financed by individual governments. However, the European Commission will only permit such measures if a set of stringent requirements are observed.
|English||30.08.2018 - 31.08.2018||Arcotel John F|
|Date:||30.08.2018 - 31.08.2018|
|Location:||Arcotel John F|
The basis for granting State aid is laid down in the Lisbon Treaty. Per definition, State aid rules apply where the beneficiary of a measure is an “undertaking” seeking economic profits. The treaty stipulates that State aid must be compatible with the EU single market and must not impede trade between Member States or distort competition. The laws on State aid are being constantly revised both at national and European levels and need to be consistently checked.
Identifying State aid elements is not an easy task. The very broad definition and subsequent interpretation of State aid rules creates high risks, especially for the recipients of financial assistance. National, regional and local authorities face the challenge of determining which measures require notification. Failure to notify a measure that is afterwards found to involve illegal State aid, may result in the repayment of granted guarantees. This may bring severe consequences for the beneficiary.
State aid regulations have been recently modernised by the European Commission. Updated State aid rules are laid down in the General Block Exemption Regulation (GBER). With these new rules and regulations, the European Commission is able to point out specific categories of State aid that are compatible with competition law if they fulfil certain conditions. GBER exempts these particular State aid categories from prior notifications and the Commissions’ approval, giving Member States a broader scope when dealing with State aid cases. Policy fields such as State aid for infrastructure projects, in particular sea- and airport building, have been recently included in the GBER. However, the extended flexibility comes with an increase in duties for Member States who need to ensure strict compliance with State aid rules when applying the GBER. Besides new State aid rules, there are various areas that remain difficult to manage and assess such as the implementation of rules for Services of General Economic Interest (SGEI) and management of notification procedures.
Our seminars and further education courses focusing on State aid are a perfect opportunity to gain in-depth and up-to-date information on practical State aid issues. The workshop character of our trainings gives participants the opportunity to explore legal case studies and to overcome difficulties with the definition and identification of State aid. For over seven years our State aid Summer Academies have provided participants with a set of skills on how to check individual cases on the contingency of State aid implications.
The current General Block Exemption Regulation (GBER) permits Member States to grant State aid without prior approval by the European Commission. Thus, national and local governments can reduce their administrative efforts. It allows them to outline quicker procedures of granting aid in order to achieve the exemption rates the European Commission is aiming at: up to 90% of aid measures are supposed to be covered by the GBER. The European Commission regularly monitors the legality compliance of aid measures applied under the GBER.
State aid for Infrastructure Projects is one of the key areas of European State aid regulations. Particular regulations for infrastructure are included in the European Notification on the Notion on Aid, the Commission’s Guidelines on State aid as well as the recently amended GBER. Infrastructure projects are large-scale initiatives with high reputational risks and high investment volume such as collaterals and guarantees. A non-observance of State aid law means a serious threat to the project and can lead to harsh financial and legal costs. Member States can expect audits and checks from the European Commission in all kinds of infrastructure projects. It is particularly challenging to differentiate between economic and non-economic purposes of an infrastructure project. Constructing infrastructure that has a future economic use may be considered an economic activity and therefore State aid for infrastructure projects might be involved. A close look at different State aid levels is therefore essential to ensure correct financing of infrastructure and to prevent recovery of aid.
State aid for research is another key topic in State aid. Higher Education Institutions (HEI) and Research Institutions have to correctly apply State aid rules. Research Institutes and Universities depend more and more on financial resources outside national funding such as EU Funds. It is crucial for them to understand the rules of the Union Framework for Research, Development and Innovation (RDI) as well as those parts of the GBER applicable to RDI. Constant analysis is therefore necessary to discern whether the State aid law regime applies for planned projects and activities. Especially when using European Structural and Investment Funds (ESIF) Research Institutes and Universities must know and correctly apply EU State aid law as well as ESIF regulations. It is essential for HEI to record and distinguish economic from non-economic activities in order to avoid illegitimate cross-subsidisation.
Another challenging field is State aid in EU funded projects, particularly for the European Agricultural Fund for Rural Development (EAFRD). Experts in the forestry and agricultural sectors face the challenge of understanding and applying State aid laws to their working fields. The European Commission has developed the Agricultural Block Exemption and de minimis regulations as part of a new set of provisions and guidelines that match changes in the Common Agricultural Policy (CAP).
In the EU State aid seminars and trainings held by the European Academy for Taxes, Economics & Law, experienced State aid practitioners from national as well as European institutions share their knowledge and expertise in different fields of State aid: State aid for research, State aid for development, State aid for innovation, State aid for infrastructure projects and many more. Participants are invited to bring their particular questions and discuss individual challenges in a confidential atmosphere. Stay updated on recent regulation updates and minimise financial and legal risks in your measures and projects and extend your expertise by participating in our various events.