How Should Allegations of State Aid Be Assessed in the Context of EU Ports?



How Should Allegations of State Aid Be Assessed in the Context of EU Ports?

Authors

P Oxley, P Hope, A Meaney, Oxera Consulting Ltd., UK

Description

This paper explains how illegal state aid at EU ports can create harm to consumers and businesses. It describes the methods and principles which should be considered if specific guidance is issued for assessing state aid in the ports sector.

Abstract

Historically, many European ports have by owned by, or have links to, municipalities. As such, there are many circumstances where they receive direct or indirect subsidies from public funding. In December 2011 the European parliament published a commissioned study that calls on the European Commission to create formal guidance for assessing state aid at EU ports. This paper will review the specific port-related issues that the European Commission would have to address in such guidance.

The possibility of state aid being granted to ports is of relevance to officials and operators. There are many forms of activity that could be alleged to be State Aid in the ports sector. These include ports offering discounts to customers, public funding for port superstructure, tax treatments, and favourable loans. Past examples of state aid cases include the development of a container transfer facility at the Port of Rotterdam, the purchasing of shares in the Port of Reykjavík by a state-owned company, and assistance in setting up the "Motorway of the Sea" between the port of Nantes Saint-Nazaire and the Port of Gijon. Even where there is no state aid, a lack of transparency about public finance schemes can lead to perceptions of an unfair advantage.

This paper will explain the economic principles that apply to state aid at ports, and demonstrate why such aid can create harm to consumers and businesses. It will address the specifics of how to appropriately assess state aid, both under the Market Economy Investor Principle, and through the Altmark criteria for Services of General Economic Interest. The paper will draw on numerous European case studies throughout.

Publisher

Association for European Transport