 First of all, of course, completion normally does have a found that state aid is illegal. And if it adopts a so-called negative decision, it will require recovery. It's very important for the Commission not to ask for recovery. I think almost all these cases that it did not require recovery recently was the France telecom case where the Commission found that, of course, the Governments have said, more or less like what Mario Monti said in June 2013, I think it was that the European Central Bank would do anything to save the euro. The French government said they would do anything to save the French telecom. And that was taken to be a form of state support. And it was a big discussion as to whether or not that was going to cost the French state money and therefore bring that support into the definition of the same resource. But the Commission kind of got around the problem by saying in this particular case we will not require recovery. But we will require that certain procedures would be stopped. So the Commission got around the problem of recovery there. But normally the Commission does insist on recovery and can argue that following the regulation, the procedural regulation of 1999, now amended in 2015, the Commission is obliged to recover aid. Once it finds that aid, it will be rewarded. Now you've probably also heard in the course of these lectures and we'll come back again to that today. But the courts have allowed the Commission a third large margin as to how to calculate the amount that has to be recovered. So the Commission actually only has to provide general indications to the national authorities as to the amount that should be recovered. So the Commission doesn't insist the amount, nor does it have to identify the beneficiaries. I had a very complicated case in Hungary that concerned the loan term part, pertinent contacts in the electricity sector. And you will hear about the case on the meeting set in a bit, but this contract states it's similar, so I'll tell you a little bit about it because I think it will give some interesting discussions, items. So in this case, a number of electricity conditions got into Hungary before Hungary became a member of the EU, but in the 1990s, Hungary was modernising its economy and many institutions like the World Bank, the IMF, encouraged foreign investors to go into Hungary and conclude long-term agreements as parts and parcel of purchasing various assets in the energy sector. My response was very short. The Hungarian government decided that they didn't really like these agreements because it required the payment of the fixed amount for the electricity that was being bought by the state energy company. And they didn't particularly like having to pay what they think is a very bad amount of aid of Hungary, of a high tariff in this electricity. And various procedures, as well as international arbitration for long-complicated cases, but eventually the commission ruled that these long-term contracts were staked because they took away the risk from the commission and put it on the purchase. And the commission reckoned that no normal economic operator would sign such a clear contract. Now, you could dispute that finding the commission was actually quite a risk-free decision. However, for our purposes, what interested me was recovery. So what the commission did was, first of all, they told the Hungarian government in their decision that they should remove the elements in these contracts that gave rise to the state aid. Now, it's quite carefully formulated in that it didn't tell the Hungarian government to cancel the contracts. Everybody, no matter why, the commission has the powers to tell a member state to cancel contracts. Is there any future? I want to reflect on that now, where we keep it for later. But it's an interesting thought. What is recovery? And what are the remedies in this case? It's the only remedy of financial matters that the consumer can refer to. Just about the money. Just about the money. I mean, I know that people would interpret it that way, but the commission said, you really have to remove the state aid element to restore the status quo. And if restoring the status quo means getting rid of the contracts, well, maybe, maybe. Now, of course, behind the commission's careful wording and very tentative approach here was, of course, the threat of arbitration for canceling contracts. So the commission knew that Hungary would before maybe be taken to international arbitration for canceling contracts. I just want to just remind, perhaps an easy question, you know, you get rid of canceling contracts. Do you get rid of that? Do you get rid of that? Or just... For the period from when Hungary joined the EU. So the contract for the 25 years, they were concluded in, let's say, 1995, 1996. And the commission said it was the state aid rules applied as of 2004. And so, yes, it's retroactive. So that meant, of course, from the point of view of arbitration, there were lots of issues. So the commission obviously didn't want to cancel the contracts itself. It gave that responsibility to Hungary. Hungary didn't cancel the contracts. And they adopted an act on compensation because the commission had said, well, we don't mind you compensating for these contracts. Because, indeed, retroactivity of principles of international law, et cetera, here. So we think it's all right if you give compensation for what we call stranded assets. And that also needs to be compensation schemes for stranded assets. The commission had looked at one in Poland and they made a nice calculation. They said, if you only give this amount of money, that's all right. Now, I'll tell you all this because recovery is a really complicated issue, a community level as well. And I think it's good to remember that when we come to look at natural legislation on recovery, whether we can just wave a magic wand and say, yeah, there should be recovery procedures because it's complex. Now, in this Hungarian case, so the commission did not tell the Hungarian government they had to cancel the contracts, but the government did. Nor did the commission say they had made it to be recovered. It just said, and this was a very fascinating aspect of this, which is similar to the media set, which you will be following now, is the commission said to Hungary, you have to draw up a model of your electricity market that will give you a price for the electricity had those contracts not been in place. So it's like a counter-faction if you know that term from competition level. So we imagine a world without these contracts. We then calculate, using economic models, we calculate what the price of electricity would have been almost like on a simple stock exchange and electricity exchange and that would be, according to the commission, a price that a normal market operator would pay. So the state aid was any element above that price and that was the amount that had to be recovered. Now you can imagine that this was a very complicated issue. And the commission had only used that approach of setting up a counter-factional model in the media set case. We hear about how that played out in Italy. So it was a fictitious world that the commission wanted to use as the benchmark. And of course, the difference between the price under these contracts and the difference between the price given by the economic model is huge. So these companies, and they were big companies, ElectriVal, ETF, American companies, Swiss companies, they all stood to lose a lot of money. So they went to court and they said, well, the commission has not told the member states how to calculate the amount to be recovered to come up with this model. And Neiman, Hungary was very clever because they said, okay, we know we have to compensate. We can't just cancel contracts. That's country to international law. We have to give compensation. But for me applying the model, you owe us money. So you owe us the money. We owe you compensation. So if you owe us 100 and we owe you 50, we'll just cancel everything. Nobody pays anything. If you owe us 50 and we owe you 100, we'll cancel it as well. So that was not a very happy approach either. Also taking more arbitration. But in the courts in Luxembourg, I had one of these cases and what had happened strangely enough in the model was that my company had actually not received any aid at all. The Hungarian power companies had purchased the electricity at more or less the same prices they would have done on this market. So there was nothing to recover. So I went to court and argued this time it would be no state aid. Where is the state aid? No. I was told that that was not a good argument by the court. And I don't know why did you say but you know that there is more to the state aid than just money. So I said, where is the advantage? There has to have been an advantage. I don't see where the advantage is. By applying the model it's clearly so that there has to be no advantage. Well the court didn't really have an answer to that question. But they rely on the standard approach that it's not up to the commission to give very definite guidance. And if nothing can be recovered at the end of the day that doesn't mean that there is no state aid. So I'm trying to know this because I think it's interesting starting at the U level with regard to the situation. You start in a difficult place. You don't know who has to pay. You don't know how much has to be paid. All we know is that something has to be paid and it should be paid back pretty quickly. And we know that the commission can start proceeding against the member state to recover the aid. What we also know of course is that many member states never recover the aid. And it's really only since 2007 when the commission adopted the state aid action plan that the commission started really getting to grips with the problem of recovery and they set up a recovery unit to monitor whether or not aid was being recovered. So it's really only in the last 10 years that recovery has been taken seriously at commission level and resources have been put to monitoring recovery. What we also know of course is that following the latest state aid modernisation plan from 2012 the idea is that state aid enforcement should be decentralised. So national courts would trade a major role in releasing state aid and making sure and the latest triggers I don't know if you've looked at this but the commission now privately announces that 90% of all cases are decided under general body sanctions regulations. So the commission only gets the tip of the iceberg and that's what it wants to handle with his. So decentralisation is really important and people now are paying much more attention to what's going on at national level and that's where I want to start looking at today what's going on at national level looking at the Netherlands and in my experience we generally think of access to the Dutch courts as being very easy for state aid cases there are quite a number of cases as I'll show you we also have a fairly well organised system of compliance I'll look very briefly at the present framework in the Netherlands for recovery and I hope that you can draw upon the expertise in the room looking at the different courts here and I will touch on the proposed reforms very briefly because we'll come back to that after 15 minutes. So the Netherlands likes to think of itself as one of the better kids in the Netherlands and we don't see that many negative decisions being issued against the Netherlands so they're not even that many formal procedures things seem to go reasonably well so looking at the year 2015 which was the last one I could find official statistics for the commission took nine decisions on the Netherlands state aid applications second of which no objections at all so not even opening the full investigation procedure there was one 08 and I scratched my head thinking what one was that one and then I realised of course it is Starbucks where you've discussed some of the tax winning cases and I'm not sure Starbucks but in that case the Dutch government was ordered to recover 30 million euro plus interest and I understand that that amount of money hasn't been recovered pending the appeal procedure so there is an action for an annulment of the decision before the general court at this very moment but the money has been recovered so there's not that much going on if you like at the commission level just a few cases there have been major schemes approved by the Dutch government especially the environmental sector but not that many individual decisions so when we come to the national court here the statistics look quite impressive that in the last 12 years there have been more than 100 cases brought before the Dutch court in that early period and that is rising even research has found indicated that between 2011 and 2016 they counted 112 cases just in that period but what is interesting is the very low rate of success of raising a state aid plea whether that plea will be honored or not overall the success rate all the courts was 8% and as most of the cases investigated concerning administrative courts obviously the locus for most cases in fact here the success rate was very low indeed where only 5 cases were deemed to be admissible I'll come back to discuss that so it looks first glance like a lot of activity but as we'll see there are a lot of obstacles to getting state aid claims successfully through the courts and I think that's interesting from the perspective of recovery to know what those obstacles are we've given a lot of aid in the Netherlands we generally these days refer to non-crisis and crisis aid crisis aid went to rescue banks and a lot of that has been paid back in the Netherlands but non-crisis aid the highest amount goes to environmental protection even although you could wonder if that was having results because it's just been successfully sued for not obeying European norms on air pollution for example although we throw a lot of money at sustainable energy we'll weigh behind on the targets but there's nonetheless a lot of money floating around after environmental protection aid there's agriculture and R&D are the largest types of aid in the Netherlands so we're not a country that is giving a lot of rescue aid anymore or investment aid individual ad hoc aid on a systematic basis it's very much then horizontal aid concentrated in these boxes and of course we know the commission likes horizontal aid and it likes environmental aid loves research and development aid and agriculture aid so it's maybe when you look at the way the figures break down it's not surprising we don't see so much activity at commission level when it comes to the Netherlands okay, notification now as I mentioned we are quite well organised in the Netherlands when it comes to notification notification is coordinated at central level and I suppose that might be the advantage of being a smaller country with a fairly central we don't have autonomous regions we have second language regions of course but we don't have constitutionally autonomous regions as you have in Italy and we have an organisation that's quite effective called Decentral Europe Europa Decentral which helps local authorities monitor their plans to ground aid so in the Dutch constitutional system all public entities have a duty to notify their plans to ground aid and it's this Europa Decentral that coordinates that now there is legislation that gets central government also to to instruct public entities to refrain from giving aid or should they choose to give aid to first clear it with central government but as far as I know that that has not been used yet so I thought one thing that was very interesting in Dutch admin law and maybe I'm not sure if there's a comparison in Italian law or in any other reason I mean primarily in Italian today but of course there's representatives here from many different universities but what I found quite interesting is that Dutch courts admin courts have held that public entities public authorities have a duty of care that's very important throughout administrative law and taking that general principle from our general administrative law act I've abbreviated it there in English called the Gala so taking that general duty from our administrative law act codification of admin law before a public entity adopts a decision it should follow various procedures based on written and unwritten law and it should then exercise good care and in the application of that general principle the highest admin court the council of state of the administrative law department if you like has argued that we tell that if there are doubts as to how to classify a measure or in this case Ridder's Day that was also where the meaningless aid or not ate a holiday camp and then end doubts of deep results by a real authority if they had to contact the commission and we we know there is a commission guidance note about cooperation with national courts that national courts can ask questions to the commission no need to look to that in the course of the actions or if anybody has had experience in that procedure now in theory the commission has a kind of a health line that you can phone up and say tell me this, tell me that is this measure an aid it doesn't fall in the de minimis and so it was held in that case that was the best way to resolve that you could phone up the commission or write to the commission and get that information now there is a lot of commentary on that approach in Dutch admin literature administrative law literature because there is no binding duty there is no need to find a duty to do that the Dutch courts have the Dutch principle of duty of care together with the general royalty principle then sorry I put this article 10 of the old treaty that was before those two together that's the best way to go via route now there have been cases in other jurisdictions where indeed courts request input from the commission but what we normally see actually is the commission being very hesitant to give real concrete advice or concrete input and it's maybe something we can discuss if you haven't discussed it earlier what is the role of the commission in national procedures quite difficult now I'm talking here about government departments insulting with the commission and what I have seen in some cases I'm working on a case in Amsterdam involving broadband so this is quite a time ago 10 years ago I think now where the city of Amsterdam wanted to install high-speed broadband in a new area in the suburbs that it was building in Amsterdam and they set up a company that was private actors to build this program or to go out of this program network now we acted for one of the companies in the United States happening they thought this was distortion of competition and we complained to the commission and we also in the area also started legal action to prevent the rollout of this broadband network now the city of Amsterdam claimed that they have cleared this from the commission that they have been in contact with the commission and the commission had informed them that their participation in this broadband network was as far as the commission based on the market investor we all know now that the public entity is actually a market investor then there's no aid involved there's no advantage so of course we wanted to see that correspondence and that was then the question can you see the correspondence that the city of Amsterdam exchanged with the European commission and we went and tried to get it under the freedom of information legislation we couldn't get it actually when the states went to court we did get a copy but with lots of things blocked out so you don't really know what the commission has told the authority and again I'm not talking about the intervention of the court asking for advice from the commission I'm talking about or the local authority so you don't know whether the local authority has been told by the commission whether it can do something or not so we might say it's a duty to be cared for not to commission about something that might help it won't resolve necessarily all the issues in the case but it's also in my experience that the commission is very hesitant to say anything unless it's a very good thought case in the registry case this is about classifying the measures to minimise or not that wasn't so difficult but when it comes to something like this broadband roll out the commission needs to know a lot of complex information on any kind of opinion so it's interesting however the duty of care I don't know if it's something we can come back to if you have that in Italy or not no is there anybody in any other jurisdiction I know there are people from Austria, Belgium I can't explain that afterwards yeah okay but maybe you can come back to that okay now recovery so as with most countries there is at present no specific legislation on recovery in Holland in the Netherlands now as I explained a legislative proposal was introduced way back in 2008 it wasn't adopted in fact it was withdrawn and a new one was submitted to the parliament last year so we'll come back to all that so in the meantime we have to rely on national law, general administrative law and private law when it comes to recovery and I will explain the bare bones of it so in the Netherlands we'll join in with any comments so most recovery cases and most day cases of all under the framework of the general administrative law act and there's Article 4 here that is the 1421 which is the most used provision which means that the act has been immediately granted because the act of fronting the age is contrary to the provisions of admin law that there's nothing racist what subsidy can be withdrawn so the administrative law act this is the main act used to challenge subsidies but it's not defined in that act the word state aid doesn't appear but it lists various types of acts which generally cover the concept of the subsidy we have framework acts as well so for example some of the acts setting up the environmental aid fees will also continue on the environmental recovery so those this specific procedures and of course they're specific to the subsidies covered in those framework acts cannot rely on them for anything else perhaps one more question when you were discussing about framework acts are there logistically administrative acts these are usually legislative I think that's fair to say there was immediately used to say more the act for administrative acts these are generally I don't know what it's about I mean it's not special I just want you to learn what that means for me yeah well it's normally about having a particular example in mind you will have a legal basis to adopt delegated legislation so in the environmental field for example you will have a general provision in a general act and then on the basis of that you adopt a secondary legislation which can be in many different forms and we have legal acts which set up the framework of the subsidy and then we have legal acts granting the subsidy so it's a cascade of measures all of which when you're looking at a specific field can be relevant we also may have this cascade in from one important word the nature would be administrative yes would be administrative normally with these frameworks this will all be administrative when it gets into the detail and so the challenges and there are challenges for example they usually come in the form of whether you've been given the right amount of the subsidy people claim we should have got more because our costs were not properly taken into account or we should have got more because the rules on cumulation have been wrongly applied those are all administrative so you will challenge them for the administrative courts if you challenge in general legislation it's difficult general legislation would be non-challenged before in general law in general in general act would be challenged just in terms of E.C.J of course and our position of course the rate of the law is this rate and the judge cannot go against the law just constitutional law or E.C.J would be very easy but it's irrational of course but it could be a general way of thinking we have the same issues but we should come back to that when we are looking at the okay so if you look at this general administrative law act yeah the types of subsidies that can be dealt with cover all the classic types of subsidies loans, tackle grants that kind of thing but what you also see is the use of this administrative law provision to challenge planning decisions so where for example a law authority has made various plans to build a shopping centre and it's allocated buildings in that shopping centre to certain types of shops so there can be two shoe shops one supermarket whatever one cinema one sports hall there we're seeing a lot of places coming where it's alleged that that process that planning process is conferring an advantage let's say on the shoe shops and there is this is a way to try to stop these planning procedures being executed and by far the largest number of cases that we've had recently in the Netherlands relate to these planning cases and there in fact the state aid, although it's regularly brought up usually fails not even on the substantive grandest whether this is state aid but on standing so the applicant is often denied standing because the courts apply a 30 strict test for standing in administrative law places you have to show that your interest is directly and individually affected and that this planning decision then would affect you in a way that it wouldn't affect anybody else test is quite similar to the European law test the thing is the planning test but it's important because it acts as a very good say screening to keep out a lot of cases now one of the flaws with the gallon is when it comes to recovery and it's something I'll come back to is that although the administrative law framework can be relied on for recovery so if an act is wrongful and it can be annulled then the money's paid as a result of that annulled act have to be paid back that's the logic but the positional interest is extremely complicated because you cannot include the compound interest that you're required to recover from the aid beneficiary under European law on that basis that has been held so the courts have held that on the basis of unwritten administrative law so outside the codification in the gallon it's possible to require recovery and some interest but to require compound interest to be repaid the courts in the Netherlands can stay held in an important case for compost that you have to have a national legal basis a written legal basis so you can do some things on the basis of unwritten legal principles including a general duty to recover but actual interest cannot be recovered on the same basis as is required by a European commission decision and that was decided in the Flurry case and that led as I'll explain in a minute to the proposed legislative initiative in Holland on recovery now just before I get into all that a few important things that are not covered by the administrative legal framework is tax that doesn't tax measures are generally not covered and they will then have to be dealt with under general tax legislation so that is possible but again not recovery is of course possible but it's not covered by the general administrative law act and of course private contracts private private dealings will automatically have to be challenged in civil proceedings so if guarantees are given for example that type of contract or the long term privacy contracts that I talked about will use the Hungarian case we have had cases like that in the Netherlands those would be then issues for civil courts so what about the relevance of certain national legal principles when it comes to recovery now I look briefly and this is I think I look at this type briefly but it's a fascinating area and one I think that we'll see a lot more discussion coming up on in the coming years and that is at the recovery stage what scope is there to invoke national legal principles to resist recovery now unfortunately we haven't had that many recovery cases in the Netherlands so it's hard to give a complete picture about the role of these principles but in quite an important case for European law generally but also I think one that reflects Dutch issues and one that could be relevant in the coming litigation around the tax rulings is the principle of course of legitimate expectations and in this particular case the Cornelike tree slum fruit case abbreviated as KFC because it's also another company involved this involved this involved the tax case and it was actually back at the time when the commission had rolled out its first big campaign against unfair taxation and tax harbours and the commission had got a very important decision concerning Belgium which eliminated certain tax advantages for some groups of undertakings in the case called the Belgium Ford but that was also an interesting case because the commission did not require recovery I mentioned at the beginning that the commission does have some discretion not to require recovery and in that case that Belgium forum case the commission had said it wasn't entirely clear what the legal situation centres were set up there was also a discussion of existing aid being around for a long time so the commission only required measures going forward that the Belgian government actually adjust its tax system similarly in the Netherlands certain coordination centres of similar types of institutions were condemned as being contrary to the state tables there was no recovery required but measures had to be taken going forward to get rid of them now in both that Belgium case and in the Belgium case the commission allowed a transitional period it appreciated that tax rules are complex and therefore adjustments were necessary so it allowed for the companies in the regions to enjoy a transitional period to rearrange their affairs now Campina KFC Frisland Food Campina they were covered by these transitional arrangements in the Netherlands and therefore they could still benefit from the scheme and they wouldn't benefit then and they wouldn't get a tax advantage by staying in the city now on the facts of the case it was not actually that clear and KFC argued at national level that they had a legal expectation a legitimate expectation and and they would be exempt from any recovery claims going forward and the general court supported Frisland since I've held that that argument but interestingly and the general court said that these were matters that were governed by legitimate legitimate expectations in national law but the national law had created the expectation that KFC would continue to benefit from being in the scheme for a transitional period but when the court of justice looked on appeal, the commission appealed the case and it was held that in fact the court of justice the general court had committed an error of law because in fact KFC should not have benefited from the transitional measure at all it was given special tax status after this whole scheme to be wound up so what the court said interestingly here was that the protection of the legitimate expectations at national level even if there had been such expectations even if they had been grounded that it couldn't be applied here at all on the facts of the case that the general court committed an error here so that was a pity because it would have been interesting to have known it would have been interesting to have some further reflection from the court of justice to what extent national principles such as legitimate expectations could have played a role here