Governments can falsify competition by awarding aid measures to individual businesses. An aid measure can take many different forms. State aid is not limited to government subsidies or the issuing of loans and guarantees subject to ‘friendly’ terms, but also comes in the form of an easing of the tax and premium burden for example with exemptions, the reduction of government charges and in the form of non-market conforming transactions. All these situations can be described as state aid, and all must be reported to the European Commission for approval.
Following submission, the Commission assesses whether state aid has been provided and if so, whether that aid can be deemed compatible with the internal market. As long as the Commission has not reached a decision on a reported case of state aid, the proposed aid cannot be implemented (standstill obligation), to avoid the risk of the project being shut down at a later stage or the aid having to be returned by the beneficiary plus interest.
Our specialists have considerable experience in assisting both governments and businesses in various state aid dossiers. The dossiers in which we have been involved range from assessing state aid risks in land transactions with government authorities through to the state aid proof elaboration of complex financing agreements in the framework of public private partnerships. One high-profile dossier in which our attorneys were involved concerns the investigation by the European Commission into possible forbidden state aid to Dutch football clubs.