STATE AID : SEVEN SPANISH FOOTBALL CLUBS, THREE IN-DEPTH INQUIRIES.

Seven Spanish football clubs, including two big league players - Real Madrid and FC Barcelona - are in a bad way. On 18 December, the European Commission opened three separate investigations on subsidies or public advantages they benefit from to make sure they are compatible with EU rules on state aid. The Commission has concerns that these measures provided significant advantages to the beneficiary clubs to the detriment of the clubs that have to operate without such support. The measures are therefore likely to affect competition and trade between member states. At a press conference, Competition Commissioner Joaquin Almunia said: "Professional football clubs should finance their running costs and investments with sound financial management rather than at the expense of the taxpayer".

In so far as the professional football clubs in question were facing financial difficulties at the time of the measures under scrutiny, the Commission will assess them on the basis of the EU guidelines that allow member states to grant aid for the rescue and restructuring of companies in difficulty. The Commission underlines that Spain has submitted no restructuring plan demonstrating how the clubs could become viable again while limiting the distortions of competition brought about by the state support. Foreign Affairs Minister Jose Manuel Garcia-Margallo announced, on 16 December, that two days later the EU executive would launch an in-depth investigation into these clubs (see Europolitics 4775).

The Commission will firstly investigate possible tax privileges for Real Madrid FC, Barcelona CF, Athletic Club Bilbao and Club Atletico Osasuna. The commissioner explained in a press release that these clubs are exempted from the general obligation for professional football clubs to convert into sport limited companies. The effect of this exemption is that these clubs enjoy a preferential corporate tax rate of 25% instead of 30% applicable to sport limited...