The Measure Includes the use of State Resources and Economic Advantage

The concept of state aid refers to “aid granted by an EU member state or through state resources”. Although the definition refers to member states and state resources, aid in the meaning of state aid rules includes all forms of advantage granted to a beneficiary directly or indirectly by any public body, such as central government, its ministries or departments, regional or local government and their councils. Whether aid is granted directly by state or by public or private bodies established or appointed by it to administer the aid is immaterial in this respect. The decision on an aid measure  must also be referred to a public body, therefore shall some public authorities also participate in the decision making.

Moreover, state aid rules apply only to undertakings. Since state aid is defined as an advantage in any form whatsoever conferred on a selective basis to undertakings by national public authorities, subsidies granted to individuals or general measures open to all enterprises do not constitute state aid. According to established case law, the concept of an undertaking in competition law covers any entity engaged in economic activity, regardless of the legal status of the entity or the way in which it is financed. The interpretation of the concept is wide and covers among others sole traders, partnerships running a business, companies running a business, artists, and certain associations such as the Fédération Internationale de Football Association (FIFA).

Finally, state aid measures must lead to an advantage to the recipient. The aid should constitute an economic advantage that the undertaking would not have received in its normal course of business. State aid includes all forms of advantages granted directly or indirectly and therefore the concept covers not only direct grants but also reductions in taxes, securities below market price, sale of land and buildings below market price, etc. All aid represents a cost or a loss of revenue to the public authorities and a benefit to recipients. The aid element, i.e. the ultimate financial benefit included in the nominal amount transferred depends to a large extent on the form in which the aid is provided. Secondary state aid rules in the form of exemptions, recommendations and guidelines are generally organised according to the form of the aid: grants and tax exemptions, equity participation, soft loans and tax deferrals, and guarantees.