March 12, 2020 / 11:50 AM / 18 days ago

EU court annuls state aid finding against Valencia

BRUSSELS, March 12 (Reuters) - An EU court ruled on Thursday the European Commission had been wrong to find guarantees provided to foundations linked to Spanish soccer clubs, including Valencia, were unlawful state aid, dealing a blow to EU antitrust regulators.

The guarantees by Spanish regional government of Valencia are modest, but the court’s view that the Commission made a number of errors in its assessment could undermine its crackdown on tax avoidance by and subsidies for multinationals.

The General Court of the European Union, the EU’s second highest court, is set to rule on the Commission’s 2016 order to iPhone maker Apple to pay back taxes of up to 13 billion euros ($14.6 billion) to Ireland, as well as other cases.

It also heard arguments from Intel this week against a 1.06 billion euro EU fine imposed more than a decade ago.

The Spanish case concerned guarantees between 2009 and 2010 to foundations linked to three soccer clubs - Valencia, Hercules and Elche - to cover bank loans taken out in order to participate in the capital increases of the clubs.

The court annulled the Commission’s decision on Hercules last year and on Thursday did the same for the decisions related to Valencia and Elche.

The court said errors included an assumption that no financial establishment would act as a guarantor in such as situation and, in Valencia’s case, a conclusion that the value of shares in the club were “close to zero”.

Valencia, who play in the Spain’s top-flight La Liga, had been ordered to pay back 20.3 million euros plus interest.

$1 = 0.8897 euros Reporting by Philip Blenkinsop; editing by David Evans

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