State Aid in Germany

A state aid is a type of benefit that the government or a state grants to a company or organization. Aids exist not only in Germany, but also in the entire European Economic Area. As soon as a state grants a benefit in any way – however small it may be – state aid law regulates how to handle it.

European state aid law is part of European competition law and aims to ensure undistorted competition in Europe. In principle, the European Treaties initially prohibit any form of aid. However, various exceptions to this prohibition are again made, which must be examined on a case-by-case basis. The European Commission keeps a close eye on compliance with the relevant regulations.

Some of the regulations relevant to state aid/competition law have already been transposed into national law and can be found in the laws on subsidies and public procurement.

In Germany, it is not only the federal government that has to deal with the issue of state aid law, but also the states, municipalities and local authorities as well as state enterprises and institutions of all kinds. Violations can result in the personal liability of the acting persons.

Grant recipients also often have to deal with issues of state aid law, namely when

• a benefit granted must be returned,
• the aid was granted unlawfully, or
• conditions have not been met.

Moreover, action can be taken against competitors if they have received unlawful aid.

We advise and represent the public authorities and their companies,

• on how to identify and analyze facts relevant to state aid law, e.g. by examining existing or planned grants
• on how to develop solutions and strategies that comply with state aid law, e.g. through the legally secure drafting of contracts, grant notices or entrustment acts
• in the context of the notification procedure to the European Commission, and
• in the context of state aid law proceedings before German courts, in particular recovery proceedings or competitor actions,

We advise private actors and beneficiaries

• when applying for or approving aid,
• when auditing grants or aid received and assessing the risk of recovery,
• in the context of recovery procedures,
• in competitor lawsuits and complaints against aid ("private enforcement") and for due diligence under state aid law.