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There is a general prohibition on EU member states granting state aid to companies, but there are exceptions to this where the aid is justified in order to prom

There is a general prohibition on EU member states granting state aid to companies, but there are exceptions to this where the aid is justified in order to promote economically underdeveloped regions. There are a lot of rules and court cases about when state aid will fall on one side or the other of that line. See eg https://competition-policy.ec.europa.eu/state-aid/legislation/modernisation/regional-aid_en https://competition-policy.ec.europa.eu/state-aid/legislatio...

n_plus_1_acc 2y ago
You Seen knowledeble on this topic. What do you think of the numerous Deutsche Bank and Lufthansa aids?
- realityking 2y ago
  I don’t think Deutsche Bank has ever received direct state aid, they’re quite proud of that fact. Though they have benefitted indirectly when institutions that owed Deutsche Bank money received state aid. Lufthansa did receive state aid during the pandemic. This is currently under investigation as the EU’s approval was annulled by an EU court: https://ec.europa.eu/commission/presscorner/detail/en/ip_24_3662 https://ec.europa.eu/commission/presscorner/detail/en/ip_24_...
  - hnbad 2y ago
    To be clear: Germany also heavily subsidized a lot of other large companies, especially in the automotive industry during the pandemic but the politicians involved were mostly smart enough to hide this behind grants with tailor-made requirements that only incidentally happened to perfectly match those companies and few else.
    - realityking 2y ago
      At least VW and BMW have certainly received state aid in the past, mostly around opening new factories, but I can’t find anything where they got specific aid during Covid. Of course they were able to use support that’s open to all companies, e.g. Kurzarbeit, but that’s not considered state aid in the EU context.
systemtest 2y ago
The Dutch government is spending billions to keep ASML in The Netherlands. To circumvent these prohibitions, the money doesn't go directly to ASML but is invested in better infrastructure, housing and education in the local area. More trains and busses to bring people to the company, better energy grid to power all the ASML offices, more money towards STEM studies of the local universities so they are creating the new ASML workforce, building extra homes so the company can hire more people. Plus tax cuts for the employees of ASML, which is fully legal under EU legislation and prohibitions.
- pchristensen 2y ago
  This seems like a pretty fair way to do it - the government invests in being a place worth staying in, rather than just subsidizing or lining the profits of the target business. If ASML left, it might blow up the economic model of tax + investment, but the constructed infrastructure and social assets would remain.
- actionfromafar 2y ago
  It is kind of funny in way. :-) "Oh no, education and better infrastructure such as mass transit and a power grid, the horror!"
  - systemtest 2y ago
    Not complaining! It's wonderful that we are finally getting investments in a better environment. And ASML provides a big boost to the economy as well. But a bus line that goes from the train station directly to one company, together with housing that will be filled with the expats from ASML is obviously an (indirect) company subsidy.
- throwaway2037 2y ago
  > Plus tax cuts for the employees of ASML I had to research this claim. It looks true for some. <<This allows certain workers recruited abroad to keep 30 percent of their income without paying tax on it for a period of five years as compensation for relocating.>> Ref: https://nltimes.nl/2024/03/25/cabinet-close-eu14-billion-plan-keep-asml-nxp-eindhoven-end-30-ruling-cuts https://nltimes.nl/2024/03/25/cabinet-close-eu14-billion-pla...
carlosjobim 2y ago
> There is a general prohibition on EU member states granting state aid to companies The EU hands out billions in direct aid to companies every year. Many times together with the country governments. So there's no such prohibition in practice. In the EU regions I am familiar with, at least 70% of companies live on getting subsidies from the EU mainly and income from actual customers as a secondary concern. And I'm not talking about agriculture, but every industry. Few businesses will even start any economic activity before they've received at least a hundred thousand in subsidies and investment grants. Not loans, which is a different matter. Just one example: https://commission.europa.eu/business-economy-euro/economic-recovery/recovery-and-resilience-facility_en https://commission.europa.eu/business-economy-euro/economic-...
- kranke155 2y ago
  The EU does that, yes. He’s saying countries can’t do that to their own industries, however, which I am led to believe is correct.
  - qwytw 2y ago
    I think it applies only to aids for specific companies? e.g. if all companies that satisfies some requirements (e.g. N number of employees/new jobs , specific geographic area, industry etc.) cam receive the aid it's legal.
    - toyg 2y ago
      Correct. This said, if the incentives are tailored a bit too much (i.e. there is clearly only one company that satisfies the prerequisites), it could be challenged as state aid. You still need someone to start the challenge though - either a competing company or a Commissioner.

n_plus_1_acc 2y ago

You Seen knowledeble on this topic. What do you think of the numerous Deutsche Bank and Lufthansa aids?

realityking 2y ago
I don’t think Deutsche Bank has ever received direct state aid, they’re quite proud of that fact. Though they have benefitted indirectly when institutions that owed Deutsche Bank money received state aid. Lufthansa did receive state aid during the pandemic. This is currently under investigation as the EU’s approval was annulled by an EU court: https://ec.europa.eu/commission/presscorner/detail/en/ip_24_3662 https://ec.europa.eu/commission/presscorner/detail/en/ip_24_...
- hnbad 2y ago
  To be clear: Germany also heavily subsidized a lot of other large companies, especially in the automotive industry during the pandemic but the politicians involved were mostly smart enough to hide this behind grants with tailor-made requirements that only incidentally happened to perfectly match those companies and few else.
  - realityking 2y ago
    At least VW and BMW have certainly received state aid in the past, mostly around opening new factories, but I can’t find anything where they got specific aid during Covid. Of course they were able to use support that’s open to all companies, e.g. Kurzarbeit, but that’s not considered state aid in the EU context.

systemtest 2y ago

The Dutch government is spending billions to keep ASML in The Netherlands. To circumvent these prohibitions, the money doesn't go directly to ASML but is invested in better infrastructure, housing and education in the local area. More trains and busses to bring people to the company, better energy grid to power all the ASML offices, more money towards STEM studies of the local universities so they are creating the new ASML workforce, building extra homes so the company can hire more people. Plus tax cuts for the employees of ASML, which is fully legal under EU legislation and prohibitions.

pchristensen 2y ago
This seems like a pretty fair way to do it - the government invests in being a place worth staying in, rather than just subsidizing or lining the profits of the target business. If ASML left, it might blow up the economic model of tax + investment, but the constructed infrastructure and social assets would remain.
actionfromafar 2y ago
It is kind of funny in way. :-) "Oh no, education and better infrastructure such as mass transit and a power grid, the horror!"
- systemtest 2y ago
  Not complaining! It's wonderful that we are finally getting investments in a better environment. And ASML provides a big boost to the economy as well. But a bus line that goes from the train station directly to one company, together with housing that will be filled with the expats from ASML is obviously an (indirect) company subsidy.
throwaway2037 2y ago
> Plus tax cuts for the employees of ASML I had to research this claim. It looks true for some. <<This allows certain workers recruited abroad to keep 30 percent of their income without paying tax on it for a period of five years as compensation for relocating.>> Ref: https://nltimes.nl/2024/03/25/cabinet-close-eu14-billion-plan-keep-asml-nxp-eindhoven-end-30-ruling-cuts https://nltimes.nl/2024/03/25/cabinet-close-eu14-billion-pla...

carlosjobim 2y ago

> There is a general prohibition on EU member states granting state aid to companies The EU hands out billions in direct aid to companies every year. Many times together with the country governments. So there's no such prohibition in practice. In the EU regions I am familiar with, at least 70% of companies live on getting subsidies from the EU mainly and income from actual customers as a secondary concern. And I'm not talking about agriculture, but every industry. Few businesses will even start any economic activity before they've received at least a hundred thousand in subsidies and investment grants. Not loans, which is a different matter. Just one example: https://commission.europa.eu/business-economy-euro/economic-recovery/recovery-and-resilience-facility_en https://commission.europa.eu/business-economy-euro/economic-...

kranke155 2y ago
The EU does that, yes. He’s saying countries can’t do that to their own industries, however, which I am led to believe is correct.
- qwytw 2y ago
  I think it applies only to aids for specific companies? e.g. if all companies that satisfies some requirements (e.g. N number of employees/new jobs , specific geographic area, industry etc.) cam receive the aid it's legal.
  - toyg 2y ago
    Correct. This said, if the incentives are tailored a bit too much (i.e. there is clearly only one company that satisfies the prerequisites), it could be challenged as state aid. You still need someone to start the challenge though - either a competing company or a Commissioner.