Download Hargita_Eszter_30_May_Ankara_not State aid_uj

Measures falling outside the
State aid rules
Eszter Hargita
30 May 2011
Ankara
What is not State aid?
• Social measures (aid granted to the
customers)
• Behaviour in line with the market economy
investor/creditor principle
• General measures (non selective)
• Nature of the tax system
• Small amount of aid (de minimis)
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Market economy investor
principle - MEIP 1.
• Established by the jurisprudence
• Based on the non-discrimination and
neutrality of ownership
• Individual assessment whether state
intervention constitutes aid or not
• Margin of discretion – grey areas –
benchmarks
• Unlimited sources of the state
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MEIP 2.
• Objective of the analysis: is there advantage?
• What could been obtained on the market
(cost of the money)
– Cost of the risk free money – state bonds, interest
set by the central bank
– Risk premium
• Normal market condition, business rationality
• Under similar conditions a normal market
investor would have done the same capital
increase?
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MEIP 3.
• Medium or long term expectations should govern
• Only the profit expectation counts no side effects
(regional development, employment. etc.)
– Positive effects are scrutinized during the compatibility
assessment of the aid
• It ignores all other policy objectives (like lowering
unemployment, raising productivity, improving
training, protecting environment, expanding
research)
• Additional tax income or the maintenance of it is not
an argument
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MEIP 4.
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•
•
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Early losses are acceptable
Group thinking, indirect effects acceptable
More actors from the state assessed together
Different assessment of new or follow up
investments
• Good evidence: Participation of private and public
investor (50%-50%), pari passu (similar amount,
equal terms), if they are in a comparable situation
• Waiver of state profit is aid
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MEIP 5.
• State cannot use its privileges (cheap
resources, no bankrupcy), normal market
profit level has to be required
• Reasonable decision – not the highest profit
expectation is required
• Risk assessment case by case
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MEIP 6.
• Comparable situation, sectors, companies
• The time of the decision and the information
available is relevant, not the real outcome!
(HAMSA case T-152/99.)
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MEIP 7.
•
•
•
•
Burden of proof is on the Member State
High degree of certainty is needed
Use of the individual experts
In case of doubts – prenotification
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MEIP 8.
• Employees are not independent market
investors. Investment by employees in their
own badly doing company is not lead by profit
purposes.
• Applicable not only to capital increase but to
state regulation (mining fees, concession fees)
or even for taxes in case of state owned
companies
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Private creditor
• Regarding the repayment of investments
already made, the private creditor is
interested in the maximalisation of the
likelihood of re-obtaining the funds he has
provided already, not on the profit.
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General measures
• A general measure affecting the whole of the
state's economy e.g. nation-wide fiscal
measures is not considered a State aid.
• Tax incentive for environmental, training and
employment purposes
But no discriminatory power for the
authorities!
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General measures?
1. Does the measure intend to favour certain
firms or a group of firms?
2. Is there an administrative discretion in its
application?
3. Are the results likely to favour in practice
certain firms?
4. Is the measure open to all firms without any
discrimination?
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