 My lecture will be an introductory lecture in which I introduce already the topics to be dealt with later on. Please feel free to ask questions anytime you want. I'm a text expert and I think the knowledge we all have, as Alka said, will help us to learn from each other. I'm very much interested in state aid but that is about the material conference. So the latest developments with respect to McDonald's case, the Starbucks case, the Apple case are of course of huge interest for the development of the taxes in the future. Everything has to do, all has to do with the autonomy of individual countries with respect to their tax power. And as you all know, Europe is not perfect. There are a lot of disparities. There is no harmonization. Well, there is some harmonization but not complete harmonization. And state law instruments is really an example of very, very hard law. Because as you all know, state law, if you conclude this is unlawful state law, then you have to notify it to the European Commission and there has to be a recovery. And if the Commission and the European Court of Justice decide that it is not compatible with the internal markets, well, then you know for sure that you have to pay back all the money received, including interest. And well, in taxation that is not completely new of course, but yeah, until now the Commission was quite hesitant to apply this instrument with respect to taxation. And now if you look at these ruling cases, it seems to be a change in the policy. And that's also for me a very interesting point. And then of course also the formal aspects of these regulations come into force. Well, my job is most of all to have a look at the modernization program, the modernization of state aid control. And that has everything to do with the economic and financial crisis that started around 2007, 2008, as you all know. After that moment, the state aid increased enormously. Until that time there was state aid, but that was only around one percent of EU GDP. It was quite a number, but all right, it was doable. But as of 2007, 2008, this one percent increased to 13 percent. So many, many state aid cases had to be notified to the European Commission. And that caused a lot of work, a lot of work for the Commission and a lot of work for the member states, as you can imagine. And well, a comparable development, at least in my country, with respect to the assessment of companies, mainly big companies. In the past, the tax administration had the attitude more or less, I exaggerate a little bit, to consider taxpayers as enemies. Beware, there's a war going on between taxpayers and the tax administration. And but that doesn't work because most taxpayers are willing to pay their taxes. They don't love to pay it, but they want to be compliant because they see that it's the law and it's also in their benefit to pay taxes. It's better to concentrate on these taxpayers, on those taxpayers who are not willing to be compliant. It's better to use your energy as a tax administration on these bad taxpayers. So we introduced the concept of enhanced cooperation, horizontal supervision, in which you say, well, the taxpayer and the tax inspector are more or less farmers. And the taxpayer, the company should be willing to look very critically to its own tax position and to develop a tax control framework in which you are able to detect all kinds of risks concerning your taxable position. And you must be willing to report failures or risks to your tax inspector within this kind of covenant. There's a covenant between the taxpayer and the tax inspector to be honest about the risks and to work in present, in the present time, and not in the past. We used to come with audits looking to the last five years, long questionnaires, cost a lot of money, cost a lot of time. And now if you use this concept, you can work in the present. And that's very much better for the quality of your information, of course. In return, the tax administration should give clearance. You should say, well, if you have a problem, this is the way how we could solve it. If you have a question, let's answer this question as soon as possible. So it's in the benefit of both the tax administration that makes free capacity to look at cases which are really dangerous from the perspective of the budget. And well, for the taxpayer, you have the certainty that what you are doing is also accepted by the tax inspector. Well, that's how it is in theory. In practice, there are some problems. One of the problems is that you should be able to agree to this degree. You will all accept that I'm the statement that you also should be able to go to court. But that's not really always the attitude of the Dutch tax inspector. He says, well, if you have such a covenant, we should try to come to an agreement, all kind of problems. And if you go to court, that is not really something that fits in this covenant. And I never understood it. I think you should act like a businessman, businesswoman, by saying, well, okay, there can always be situations in which you disagree. And then, of course, you should be able to go to court. That is part of the rule of law system. But in reality, you see hardly any cases brought before courts anymore if it concerns corporate income tax, for instance. They're all dealt with in this more private sphere of this horizontal supervision. So that's one of the drawbacks. But coming back to the European Commission, the same happened with respect to state aid. Because of this crisis, and because of all these state aid cases notified before the commission, it was practically undoable. So they said, let's give more responsibility to the member states. They should be more responsible for the way they are dealing with these state aid cases. So we trust the member states to give them more freedom. We extend the possibility of giving state aid that falls within the block exemption. But on the other hand, we will increase the exposed supervision. So there will be less ex ante supervision, less notifications, but the exposed supervision will be stricter. And also, the member states are requested to do a lot of exposed supervision by themselves. It has two big advantages. Member states have less administrative costs in this notification process, because they can handle these cases by themselves. And the commission can make free capacity to take care of the real difficult cases, like the ruling cases. Well, it has been a success. They introduced this modernization in 2012 and July 2012. It was finalized in 2014, but there are still some developments going on. I think the last development of importance was the paper on the notion of state aid 2016, and that's more or less the completion of this state aid modernization. It is considered to be a success, but of course, academics always try to find some disadvantages, and I will show you some. First of all, what are the three objectives mentioned by the European Commission with the modernization? First of all, to foster sustainable, smart and inclusive growth in a competitive internal market, so increased competitiveness. And that has prerequisite that you need to have a clear and consistent legal framework. You should be able to predict whether the state aid you provide is allowed yes or no. And that is state aid as such is not necessarily bad. It can be very necessary because the market doesn't solve all issues, but then you need to have very clear rules. Second objective, as said already, is that the Commission, which is not too big, the department dealing with the state aid, would like to make free capacity to focus on the real big issues, and not all these smaller issues. So that's also, there should be prioritization in order to increase the relevance of the state aid control. And the third objective is to streamline the rules and provide for faster decisions, and that should lead to more efficiency of the state aid procedures. Well, on the 8th of May 2012, we had a communication on the state aid modernization. This was not the first step, and the process already started in 2005 with the state aid action plan. That was a roadmap for state aid reform. And also before the crisis, the Commission realized that something should change, that should be more efficient. But this is more or less the result of these first steps, the same state aid modernization. And this communication announced a comprehensive reform program of the existing state aid instruments. And well, there were five main points, and I will deal with these five points, but they will come back in later lectures. First, an amendment of the enabling regulation and the procedural regulation. I'll come back to that. In order to streamline more the rules and to extend the exemptions. Then a revision and streamlining of the guidelines and frameworks in accordance with what are called common principles for the assessment of compatibility with the internal market. As you know, it's the exclusive privilege of the Commission to determine whether a state aid measure is compatible with the internal market with article 107. But if you want member states to have more responsibility, with respect to these state aid measures, if you extend the exemptions, then of course these member states must know better what are the guiding principles to know what is compatible with the internal market. And also for national courts, this is very important. Then the third, a new de minimis regulation, small state aid, as you know, below 200,000 euro. It does not have to be notified. And the extension of the block exemption regulation. Then a new important interpretive notice on the notion of aid, which is meant also to be guidance. Of course, this cannot create new law, but can only give a summary of what has been decided already by the European Court of Justice. But it's very helpful for practice. And then what is for you very important is that this state aid modernization can only work if national courts are more involved in the application of this modernization. And there I think we will have some issues for debate. Because sometimes if you look at these rules, you get the impression that the national courts are only assistants of the European Commission. It's more or less helpful for the commission. But of course, courts are independent. They have their own responsibility. And how does this relate to the rules that we have to face? Well, we come back to all these points. Let's start with the first, the amendment of regulations. Well, first the enabling regulation. You will find it all on Blackboard, these regulations. There you find the extension of the list of categories of categories for eligible exemption measures. So here you find all the extra possibilities for exemptions, which are very helpful for the member states. Then there is a change in the procedural regulation, 22nd of July, 2013. There you see that the European Commission gets more tools to get information out of the market. And that is one of the complaints I heard, that sometimes that is considered to be a little bit burdensome. Because commission, I'm not blaming you, but you are working for the commission. The commission is able to ask a lot of information to certain sectors of the economy, and also with respect to certain instruments, certain eight instruments. The ruling cases we have seen as such an example, that the commission can say, well, let's focus now on the ruling practice within the European Union, how this ruling practice relates to the state aid regulations. And they are allowed to ask many, many questions in order to get market information. And, well, you cannot simply say, well, I have no time to answer it. You are obliged to answer all these questions. So that could be an extra administrative burden. Well, then there are rules for who is capable of complaining. Because before the modernization, it was not very clear who was entitled to complain before a court, and who had enough interest in complaining. And these rules have been made more clear now. So it has reduced the number of complaints. That was also one of the goals. Then as already said, there is now the possibility of settle inquiries to look how state aid relates to all kind of sectors in the industry, the economy. And then another point is the possibility to ask assistance of the European Commission. So courts can also consider the European Commission as an assistant. You can ask questions to the European Commission. You can ask more information about the case. You can ask also an opinion of the European Commission on that case. And there is always a debate, what is the influence, the value of this opinion of the European Commission. As court, you are free to do whatever you want to do with that opinion, but of course you can't do it without any reasoning. And mostly, the commission is the expert, and the courts don't have much experience with that. So sometimes you see that courts might be a little bit reluctant to ask an opinion from the European Commission, because they are afraid that they don't have any real freedom anymore to change that opinion. In any case, something to be discussed. If the commission comes with an opinion, then the commission does it as friends of the court. So the commission does not want to be favoring one of the parties. The commission wants to be neutral. It gives information and also the opinion are always in the common interest, in the interest of the union, and not sympathizing with one of the parties. But it also means that the commission is not going to hear the parties. So the commission comes with an opinion independent from what the parties say. In the Netherlands, I know that it is possible for the parties to react on the information given by the European Commission, and also to give a reaction on the statement of the other party. But you have no right to be heard by the commission. The only thing is that as courts, you must assess whether state aid is involved. You must assess whether all the requirements of Article 107, Section 1, are there. But it's the privilege of the commission to decide whether it is compatible with the internal markets. So even if you decide, well, I don't see any problem, but if the commission decides, well, I do see there is a problem. But of course, it has to be certified by the European Court of Justice. So in the end, there is always a court designing it. But then the position of the national court is weak. And there is a tension because you are used to be an independent court. And the commission is an administrative body, political responsibility. And especially the administrative courts are used to look whether the government, the administrative bodies are doing their job. And here, yeah, you have to respect the judgment of the European Commission. The revision and streamlining of guidelines and frameworks, and that is called the common assessment principles. Which are the principles to assess whether a state aid measure is in line with the internal markets. Before these guidelines, before these principles, there was the balancing test saying that the advantages of a state aid measure should be higher than the disadvantage. It should be a balancing, well, very broad approach. Now we have some more concrete rules. Still, they are rather general. First of all, there is a definition, a state aid measure must aim at an objective of common interest in accordance with Article 107, Section 3. So mind you, now we are talking about good state aid, allowed state aid. And not unlawful or illegal state aid. Then you find all kinds of categories in order to say, well, it is state aid, but it is compatible because we think it's a good goal, like research and development. There should be a need. The state aid measure must be targeted towards a situation where aid can bring about a material improvement that the market cannot deliver itself by remedying a market failure. So you see a very liberal approach. We believe in the market in the European Union, but sometimes the market cannot solve everything. And then state aid can be of help. Appropriateness, state aid measure must be an appropriate policy instrument to address the objective of common interest. And it also should be proportional, of course. And it should give an incentive. It should influence the behavior of the recipients. If you give state aid, and sometimes I have doubts, if you look at research and development incentives, I think every entrepreneur should do a lot of work on research and development. And sometimes you have the impression that all these R&D incentives are not real incentives for changing the behavior. They are just ways to be more competitive towards other countries. No. Also avoidance of undue negative effects, and there should be transparency. And this last is very important. Because there is no more responsibility on the level of member states, there should be transparency on what they are doing in this exemption possible. So they must make from time to time reports. They must mention what they have done, what they have brought under this exemption rule, and they should communicate this towards the European Commission. This is very important. And also very important is that if you make use of the general block exemption regulation, you must mention that. So you cannot say, well, it's obvious that this instrument falls under the block exemption regulation. No, you shouldn't mention it. Otherwise, it's not accepted, and then you should notify it. It's also decided by the General Court. Coming back to this block exemption regulation, which was extended in 2013. Well, some general aspects. We have a general limit of 200,000 euros per three years, but has not been increased. There has been a temporary increase during the crisis years to 500,000, but now it's still the 200,000 limit. The rules have been clarified and simplified. But the drawback is that there are a lot of words now, and that can give rise to litigation, of course. Yeah, the general block exemption regulation is a kind of self-assessment. I started my story with the comparison with the horizontal supervision, self-assessment, and now at the level of the member states. There are still notification thresholds. They have been increased. So, for all kind of individual measures, there is a notification threshold, and you always have to look very carefully what is applicable in that case. The commission's goals were that around 70 to 90 percent of eight should fall under this general block exemption regulation. And it seems that this has been realized that about 90 percent of all the cases are now within this block exemption regulation. But that also means that the commission is not aware anymore of all these cases. Well, they have to be reported, of course, in this general summary. But the visibility is less than it used to be. On the other hand, you can imagine that it's no more practical. It works better like this. And again, you must refer to the GBER. And that's, of course, also for your judge. Your judge is very important. If there is a state aid and there is no explicit referring to the block exemption regulation, then you don't fall under the exemption. You have to notify. Yeah, I mentioned all kind of categories and types of aid measures. Regional aid as a means are very popular also to finance them. Environmental protection rules, research and development, training facilities. Well, you can look at them. Broadband infrastructure also. Aid for sport, heritage conservation, all these kind of things. Important, of course, also does not fall under this regulation. In general, all schemes that exceed 150 million euros. But mind you, there are, again, exceptions to this rule. And for regional aid, it can be higher than its 150 million euro. In any case, all eight exceeding 150 million will be evaluated exposed by the commission. And that's a process going on now. Also, export related activities are not under the GBR. If it only considers the use of domestic products, it's not considered agriculture productions, fisheries. That means you can give state aid, but you have to notify. Closure of coal mines. Undertakings with an outstanding recovery order. Of course, if you have to pay back, then you cannot fall under the GBR, except in the case of natural disasters. And I think that's applicable for Italy, the earthquakes. And also important, undertakings in difficulty. So then you're not allowed to use the GBR. And also, if there is a violation of EU law, if you, for instance, require the use of domestic products, then you know for sure this is against the EC Treaty, against freedoms, and then you cannot allow, use the exemption regulation. Well, interesting is what are unexpected consequences of the increased use of GBR? First of all, this is success because 90% of the cases falls now under this regulation. But it's not clear how member states understand and implement this GBR. So there's a possibility for mistakes due to misinterpretations. And we will have to wait for the final evaluation whether some aspects have to be changed. When member states have doubts, they can always ask the European Commission. And mostly they do so if they have doubts. And then it's possible that the European Commission sends a comfort letter saying, well, if you're doing it in this way, we don't see many problems or we don't see any problems. But yeah, what is the status of these comfort letters? Are they giving a legitimate expectation? Because they are never very concrete. They are always rather general. Problems from the Texas spectrum, you can rely on it. But here it is said, no, no, this is just general information. You cannot rely on that. But of course, only tax professionals, they could be interested in how does a rule work. But if a private person, an individual, phones the tax phone, he has a concrete problem. And he wants to know for sure what is the solution in my problem. At least that is the way he sees it or she sees it. So there's always a tension. And also in this situation, a comfort letter, of course, you would like to know this measure is in line with Article 107. But of course, it always depends on the details, whether after evaluation it still falls on that exemption. And then an important issue, and we'll come back to that also, if you receive the AIDS, and the Member States says, it's all under the general block exemption, you could say, yeah, okay, but I want to be sure that notification is not necessary. Because if afterwards, look at Starbucks, it seems that I have to pay back all of this, including interest. Well, I don't want this. So I want certainty already. Is that possible, yes or no? Then national courts, I think they have to judge whether state aid regulation falls in this general block exemption regulation. And then it's of course possible that you have different applications of this block exemption. And then the last part in the comfort letters, what is the legal value of these comfort letters? Well, fourth element, the notice on the notion of state aid, which is very helpful. But of course, it's only a summary of the state of the art of the case law with respect to state aid. So it has no constitutive effects. It's a way to help those who apply state aid measures. Then finally, the role of the courts. Well, you already said a lot about it. The main role of the national courts is to protect the interests of those who apply the state aid moves, especially the competitors who feel not at ease because a competitor, another competitor, gets the state aid. And Article 107 and 108 are very clear. If there is aid in principle, you have to notify it. And if the commission says, well, it is not compatible with the EU regulations, then a recovery must be made. So this is a very important thing to keep in mind. But as I said, national courts have no competence to assess the compatibility of the aid. That is the task of the commission. And the ECJ has said many times that if there is a decision made by the commission, that has to be followed by all authorities and bodies, including the judiciary, because that is something that is to be respected. But you must identify whether all the regulations of Article 107, Section 1, are there, especially the selectivity test. It's very important in this respect. So that's something national courts have to do. Also, you should implement negative decisions ordering recovery. And if the recovery is there, then the court can be used to realize that. Did I get you right that the decision by the commission is binding even the ECJ? No, no, not even ECJ has to confirm it, of course. But before the ECJ has confirmed it, not sure. But for you, you have to, so the recovery must be there. So Starbucks has to pay back received tax benefits, although we are still waiting for a decision of you being called just. So it's not something, well, let's wait and see. And then we pay back. No, you have to pay it back now. And even if the commission says there is no problem, U.S. National Court must order that the interest is paid back, because normally you have to wait for the decision when you've been commissioned, that it is compatible years or no. And you're not allowed to give to pay already the state aid. If you've done so, then you have given away an interest advantage. And that must be paid back. But we'll come back to that later on. Well, as I said, cooperation with the European Commission interpreting the block exemption regulation, and you, of course, can ask preliminary questions to the Court of Justice. Well, these are some of the main remedies. I will be very brief on that, because we'll come back to it. You can prevent the payments of unlawful aid. And unlawful aid is not notified aid or aid put into effect without respecting the standstill obligation, because you know if there is new aid, you must wait before the commission says it's all right before you can implement it. Then the recovery of unlawful aid is part of the remedies before national courts. The recovery of interest, of illegality interest. And it is also possible that a competitor demands damages to be paid. And then, of course, as always the issue, can you prove really the amount of the damage should be a concrete story. And also you can decide for interim measures. Interim recovery, for instance. Well, I would like to conclude with some questions without already giving the answers, because that's what we are aiming at today. First of all, the question, especially also to Alki, we have many, many courts. Of course, many courts around the European Union, but also within one country. It could make a difference whether you go to the civil court or whether you go to an administrative court. The administrative court is more used to judge cases against the government. Civil courts might have a different attitude. But also, of course, there are possibilities that there are differences in cultures between the countries. Well, national judges do not always have sufficient knowledge about state aid. You do have sufficient knowledge now, but not all judges are here. Then the role of national courts with respect to GBR procedures, to talk about it, and also the visibility, are really memories states that's transparent with respect to this GBR. The status of opinions, comfort levels provided by the European Commission, and how does it really works in practice? How do you make a decision between preliminary questions to the European Court of Justice that take a long time or asking opinions, information from the Commission? What if a recipient wants certainty on compatibility? Can you claim that, although it falls within the GBR, according to the member states? And then, of course, the role of national courts towards the Commission. You, as court, have to identify state aid measures. But, yeah, is it really a test which can be disconnected to the test of Article 107, Section 2 and 3? Or is it more or less also interconnected? And then the last point is more a political point. This whole procedure was done to make more capacity free at the level of the Commission. But if you see the extra tasks the Commission has taken, these opinions, but also the management information tools, has the Commission sufficient capacity? If you look at enormous work to be done with respect to the ruling cases, well, that's also an interesting question. Do we need another modernisation? Okay, thank you very much. Do you have questions at this time, urgent questions?