Hacker News Reader

Comment by NoboruWataya | Hacker News Reader

There is a general prohibition on EU member states granting state aid to companies, but there are exceptions to this where the aid is justified in order to promote economically underdeveloped regions. There are a lot of rules and court cases about when state aid will fall on one side or the other of that line. See eg https://competition-policy.ec.europa.eu/state-aid/legislatio...

View on HN

The Dutch government is spending billions to keep ASML in The Netherlands. To circumvent these prohibitions, the money doesn't go directly to ASML but is invested in better infrastructure, housing and education in the local area. More trains and busses to bring people to the company, better energy grid to power all the ASML offices, more money towards STEM studies of the local universities so they are creating the new ASML workforce, building extra homes so the company can hire more people.

Plus tax cuts for the employees of ASML, which is fully legal under EU legislation and prohibitions.

This seems like a pretty fair way to do it - the government invests in being a place worth staying in, rather than just subsidizing or lining the profits of the target business. If ASML left, it might blow up the economic model of tax + investment, but the constructed infrastructure and social assets would remain.

It is kind of funny in way. :-)

"Oh no, education and better infrastructure such as mass transit and a power grid, the horror!"

Not complaining! It's wonderful that we are finally getting investments in a better environment. And ASML provides a big boost to the economy as well.

But a bus line that goes from the train station directly to one company, together with housing that will be filled with the expats from ASML is obviously an (indirect) company subsidy.

    > Plus tax cuts for the employees of ASML

I had to research this claim. It looks true for some. <<This allows certain workers recruited abroad to keep 30 percent of their income without paying tax on it for a period of five years as compensation for relocating.>> Ref: https://nltimes.nl/2024/03/25/cabinet-close-eu14-billion-pla...

The 30% ruling isn't specific to ASML, it's a general tax credit you get if you're a non-EU national that moves to the Netherlands (plus a bunch of other conditions) on a sponsored work visa.

https://business.gov.nl/running-your-business/staff/terms-of...

Whether ASML and their employees get extra benefits on top of the 30% ruling I'm not sure, I wouldn't be surprised if they do though.

> There is a general prohibition on EU member states granting state aid to companies

The EU hands out billions in direct aid to companies every year. Many times together with the country governments. So there's no such prohibition in practice. In the EU regions I am familiar with, at least 70% of companies live on getting subsidies from the EU mainly and income from actual customers as a secondary concern. And I'm not talking about agriculture, but every industry.

Few businesses will even start any economic activity before they've received at least a hundred thousand in subsidies and investment grants. Not loans, which is a different matter.

Just one example: https://commission.europa.eu/business-economy-euro/economic-...

The EU does that, yes. He’s saying countries can’t do that to their own industries, however, which I am led to believe is correct.

I think it applies only to aids for specific companies? e.g. if all companies that satisfies some requirements (e.g. N number of employees/new jobs , specific geographic area, industry etc.) cam receive the aid it's legal.

Correct.

This said, if the incentives are tailored a bit too much (i.e. there is clearly only one company that satisfies the prerequisites), it could be challenged as state aid. You still need someone to start the challenge though - either a competing company or a Commissioner.

You Seen knowledeble on this topic. What do you think of the numerous Deutsche Bank and Lufthansa aids?

I don’t think Deutsche Bank has ever received direct state aid, they’re quite proud of that fact. Though they have benefitted indirectly when institutions that owed Deutsche Bank money received state aid.

Lufthansa did receive state aid during the pandemic. This is currently under investigation as the EU’s approval was annulled by an EU court: https://ec.europa.eu/commission/presscorner/detail/en/ip_24_...

To be clear: Germany also heavily subsidized a lot of other large companies, especially in the automotive industry during the pandemic but the politicians involved were mostly smart enough to hide this behind grants with tailor-made requirements that only incidentally happened to perfectly match those companies and few else.

At least VW and BMW have certainly received state aid in the past, mostly around opening new factories, but I can’t find anything where they got specific aid during Covid. Of course they were able to use support that’s open to all companies, e.g. Kurzarbeit, but that’s not considered state aid in the EU context.

Reply on news.ycombinator.com