Recovery decisions and the Deggendorf principle

State aid rules prohibit granting aid to an undertaking that is subject to a decision issued by the European Commission for the recovery of unlawful state aid that has not yet been implemented. This is known as the Deggendorf principle.

The Deggendorf principle in state aid rules

The Deggendorf principle is based on the Deggendorf case law (cases T-244/93 and C-355/95 P, Deggendorf v European Commission) in which the Court of Justice of the European Union found that the Commission may deem aid granted to an undertaking compatible with the common market on the condition that the company repays prior unlawful aid. Undertaking means a single entity under state aid law.  The purpose of the principle is to prevent an undertaking from using new state aid to repay prior unlawful aid that is subject to recovery.

The Deggendorf principle has been incorporated into some of the Commission’s rules on the acceptability of state aid. For example, the General Block Exemption Regulation for state aid (Commission regulation 651/2014) does not apply to aid schemes which do not explicitly exclude the payment of individual aid in favour of an undertaking which is subject to an outstanding recovery order following a previous Commission decision declaring an aid illegal and incompatible with the internal market (Article1(4)(a) of the General Block Exemption Regulation).

The Deggendorf principle is part of a wider set of rules that govern the recovery of state aid. The Commission discusses these rules in more detail in its Commission Notice on the recovery of unlawful and incompatible State aid (2019/C 247/01).

Information on recovery decisions

There are currently no outstanding recovery decisions for state aid granted by Finland.

The Commission maintains up-to-date statistics on recovery decisions concerning all Member States at Recovery of unlawful aid – European Commission (excel spreadsheet State aid recovery statistics–pending recovery cases).