Dr. Michael Schütte

Rechtsanwalt / Avocat (Berlin), établi à Bruxelles
Your Specialist in European State aid law
State aid

Assisting clients - private companies, public companies, or governments - with regard to all possible State aid issues. Often, finding a solution that is free of State aid is the highly preferable way of structuring a problem. This may consist of providing a State guarantee or other State financing,  of taking a State participation or of letting the company benefit from some other measure. In all cases, however, this must be done in a way that is acceptable to the European Commission, since otherwise, what was believed not to be a State aid would turn out to be an illegal State aid, non-notified, that may even be incompatible with the Common market, and be subject to a recovery order.

Rescue and restructuring aid represent one of the biggest challenges in the field of State aid. It is important to have a coherent restructuring plan, to provide for sufficient own contributions, and to also look into whether compensatory measures are necessary. These hurt, since it means disposing of, or closing, profitable operations.  Before anything is proposed to the European Commission, I will work with the company and the national government in finding the optimum way to ensure that the company will be able to pursue its economic activities, whilst always complying with the requirements of European State aid law.

Training aid sounds like an easy case - training employees has positive effects for both the employees and the regions where they are working. Consequently, at first sight, this should be an easy case to present. The European Commission, however, considers that companies should carry out training anyway, even if the employees are learning transferable skills and may even leave the company. Showing that there is an incentive effect, that the company would not carry out the training without the State aid, is the main challenge around this type of State aid.

Research & development aid - like training aid - creates many positive external effects, and one would think that again, supporting this kind of activity with State funds should not be an issue. Again, here, the European Commission looks critically into the scenarios that the company would pursue in the absence of aid, so as to check whether there is an actual incentive effect from granting the aid.

Investment aid is usually granted in the form of regional aid, and from generally approved schemes. If certain thresholds are exceeded, the European Commission takes a closer look at the planned aid, the company must have planned its investment decision on the basis of a counterfactual analysis and must prove the incentive effect. If this cannot clearly be shown, the aid may ultimately not be approved. Some industries, like shipbuilding, are subject to further restrictions. I will work with the company to ensure that all information is provided, assist on preparing the counterfactual analysis showing that the project could be carried out cheaper at a different location, and help comply with the requirements to have the aid declared compatible.

The recovery of a State aid is ordered when the aid is illegal and not compatible with the Common market under Articles 107 para. 2 or 3 of the EU Treaty. This can only be done in a formal State aid procedure, and it is of utmost important that a company affected by such a formal procedure have proper representation before the European Commission.

If a negative decision of the European Commission cannot be avoided, either denying part of the aid to be approved, or even ordering partial or full recovery of State aid, I advise on whether the decision may successfully be challenged before the European Courts, and represent companies in the application for annulment before the European Court or European Court of Justice. 

 


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