30.09.2014 | KPMG Law Insights

EU Commission approves subsidies for “SuperGrid” research program

Dear Readers,

with the September issue of our newsletter Science and Law we would like to inform you about news around the happenings in the research and development area on EU level. There is good news: For the first time, the EU Commission has approved a specific funding measure of a Member State under EU state aid law within the scope of a notification procedure on the basis of the new EU framework for state aid to promote research, development and innovation. You can read how the test turned out in concrete terms in our first article.

Unfortunately, this good news is followed by unpleasant news. Things are not looking good for the future 2015 EU budget for research and development, according to the European Council. The latter has proposed drastic cuts in the research sector, which in turn displeases the EU Parliament. Background information on this can be found in our second article.

In the August issue, we wrote about the requirements that the Federal Constitutional Court has developed for the legitimation of the governing bodies of universities on the basis of the constitutionally protected freedom of science. Now the Lüneburg Higher Administrative Court had to take a stand on the question of who is ultimately allowed to make the decision on the removal of presidium members: the university council or the senate? The answer to this question as well as the legal justification can be found in our third article.

We also do not want to withhold from you the fact that the North Rhine-Westphalia Tariff Compliance and Procurement Act is under attack. The ECJ has declared individual statutory regulations on the minimum wage to be incompatible with the EU’s primary law freedom to provide services. In addition, we report on whether and to what extent a “zero-sum game” is permissible when stating sales figures for the last three fiscal years. Read our last two posts for more on this.

We wish you interesting reading.

Sincerely yours

Public Sector Team of KPMG Rechtsanwaltsgesellschaft mbH

Mathias Oberndörfer


Dr. Anke Empting

Attorney at Law

Union framework: EU Commission approves subsidies for “SuperGrid” research program

For the first time, the EU Commission has dealt with subsidies in favor of the European research program “SuperGrid”. R&D support measures by France were declared to be in compliance with state aid law on the basis of the new Union framework after approximately one year of examination. In doing so, the Commission has also indicated which aspects it considers to be decisive for the approval of corresponding measures in other Member States.

“SuperGrid” is based on the EU Commission’s “Connecting Europe Facility (CEF)” measure, which aims to expand energy infrastructure across the EU. The focus of the first phase is on projects to promote the electricity and gas sectors. Energy grids should help to manage the fluctuating supply of renewable energies more flexibly.

France had established a public-private partnership (PPP) with the start-up company S.A.S SuperGrid, whose sole purpose is to implement the “SuperGrid” program in France. The funding measure amounting to €86.6 million was granted in the form of a direct grant and formally notified (“notified”) to the EU Commission in 2013.

The EU Commission ruled that the planned grant met all the criteria for EU state aid. However, it was compatible with EU state aid law in accordance with point 3 et seq. of the EU guidelines and could therefore be approved. Indeed, the measure would pursue important European goals such as energy independence without unduly distorting competition.

European Council plans billions in research cuts

The European Council proposes cuts of over €1 billion in research and innovation in the first draft of the 2015 EU budget. This primarily concerns the budget of the EU-wide funding program “Horizon 2020”. As a result, the EU target set in 2010 of spending at least 3 percent of the EU’s gross domestic product on research each year will probably not be achieved in 2020 either.

The EU Parliament called the proposal a wrong signal. R&D projects could be slowed down and there was a risk of an exodus of top scientists.

Negotiations on the 2015 budget year are expected to be completed by the end of November.

Senate versus university council

In its ruling of September 2, 2014 (Case No. 5 ME 104/14), the Lüneburg Higher Administrative Court strengthened the position of the Senate with regard to the dismissal of individual members of the Executive Board.

After considerable controversy between the Executive Committee and university staff, the Senate voted to remove all Executive Committee members by the three-quarters majority of voting members required by state higher education law. However, a majority of the University Council decided not to confirm the Senate’s deselection proposals. The vice president resisted dismissal from the functional office.

The question of jurisdiction proved difficult in the present case.

However, with regard to the constitutionally protected freedom of science, the OVG Lüneburg ruled: “The more powers are granted to a presidium, the more decisive it is to subject its appointment and removal of members to the decisive influence of the senate as the body that in this case is essentially staffed with university teachers.

Whether the decision of the OVG Lüneburg will also stand in the main proceedings is still open.

TVgG NRW goes for the jugular

The ECJ has ruled that the minimum wage enshrined in the North Rhine-Westphalia Tariff Compliance and Procurement Act (TVgG NRW) is in part incompatible with the freedom to provide services.

According to the regulation of § 4 para. 3 TVgG NRW declare to pay their employees a minimum hourly wage of 8.62 euros per hour when performing the public contract.

The ECJ ruled: This would place an additional economic burden on the bidder and make the provision of services abroad significantly less attractive. In addition, an encroachment on the freedom to provide services on the basis of the concept of employee protection is no longer justified if, without any special justification, this protection only benefits employees in the case of a public contract, but not in the case of a private contract.

Depending on the interpretation of the ECJ’s decision, a minimum wage requirement could at most be justified if it has a concrete and comprehensible reference in the tender documents to the specific cost of living customary in the respective EU Member State.

However, it remains to be seen whether this possible interpretation actually offers leeway for public-sector clients.

Data for the last three financial years: entry of a zero permitted

In its decision of June 13, 2014 (Ref. VK 1-34/14), the 1st Federal Procurement Chamber clarifies that the entry of a zero is also sufficient in a form if only the separate information for the last three fiscal years is provided.

In the present case, the Bidder had only been established at the beginning of 2014 and accordingly did not have to provide any information on sales, services rendered and personnel in the past three financial years in the form. The newcomer was to be awarded the contract. The applicant claimed that the latter had already failed to meet the eligibility requirements.

The Procurement Chamber ruled that the newcomer had rightly not been excluded. The form did not establish a minimum requirement that the bidder must have been in business for at least three years or that the bidder must provide information “greater than zero”.

The decision shows: Public contracting authorities must clearly express the minimum requirements they set for suitability.


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Mathias Oberndörfer

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