Football
The European Commission estimates the clubs in the Valencia region have to return 28.2 million €
Jul 4, 2016 - 2:09 PM
Brussels has demanded seven Spanish football clubs return 68.8 million € in illegal aid
The European Commission estimates the clubs in the Valencia region have to return 28.2 million €
Jul 4, 2016 - 2:09 PM
The European Commission has today ended all the litigations with respect to Spanish football. The Competition Authorities insist Spain must recover what was considered as illegal aids for seven Spanish football clubs which could reach 54 million €.
The decision supposes a reversal for Spain on the same day that Brussels decided to absolve similar schemes used to favour Dutch football.
The most complex operation on the unearned cash is Real Madrid. At the end of the 90’s the Madrid City Hall signed an agreement to cede some ground for the club which finally were not transferred. In compensation, the City Hall conceded in 2011 another plot with a value of 22.7 million €, despite the same ground was valued in 1998 as less than 600,000 €. The independent investigation opened by the Commission to determine the correct quantity to be paid in compensation is 4.3 million €. The department directed by the commissioner Margrethe Vestager obliges, therefore, the recovery for the public accounts for 18.4 million €, which Real Madrid illegally received.
‘Public funds must comply with the norms of loyal competitiveness, and in this case the investigated subsidies fail to meet said norms’ alleged the commissioner in a statement.
Despite the substance of the case, and the political repercussions which have been rigged (all these decisions were made the authorities controlled by the PP and Brussels has delayed the verdict to not inform an acting Government), and there has been no public appearance by Vestager to explain the three sanctions.
The second case resolved today approved the guarantees conceded by the Valencia Government to three football clubs between the years 2009 and 2013: Valencia, Hercules and Elche.
The clubs were suffering financial difficulties and the guarantee awarded via the Valencia Finance Institute, was granted with a favourable interest rate. ‘Having not paid back these guarantees, these clubs have benefitted with a financial advantage compared to the rest’, argued the Commission. For this motive, they demand 20.4 million € for Valencia, 6.1 for Hercules and 3.7 million for Elche.
There is a third case where the financial repercussions are much less. It concerns the privileges granted to four clubs (Real Madrid, Barcelona, Athletic de Bilbao and Osasuna) who have been paying tax as foundations since 1990. Instead of choosing the regime for sporting anonymous societies, they have been paying a lower amount of company tax – 25% instead of 30%.
The Government has already corrected this ‘discriminatory treatment’ in January of this year, but Brussels is reclaiming the restitution of the savings made for more than 20 years. In this case finally there is no money to be returned because the Commission regards the amount ranges from zero and five million to be recovered.
In all these analysed cases, the Commission has not directly valued if the money was taken from the tax payers or otherwise. What they censure is the benefits granted which have distorted the competition, granting privileges to some clubs over those following the market rules.
Spain must now negotiate with the European Competitiveness Authorities on how to recover the money, the final amount of which is yet to be agreed. The Spanish Government can also appeal the decision, which would slowdown the process of replacing aids.
The decision supposes a reversal for Spain on the same day that Brussels decided to absolve similar schemes used to favour Dutch football.
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The most complex operation on the unearned cash is Real Madrid. At the end of the 90’s the Madrid City Hall signed an agreement to cede some ground for the club which finally were not transferred. In compensation, the City Hall conceded in 2011 another plot with a value of 22.7 million €, despite the same ground was valued in 1998 as less than 600,000 €. The independent investigation opened by the Commission to determine the correct quantity to be paid in compensation is 4.3 million €. The department directed by the commissioner Margrethe Vestager obliges, therefore, the recovery for the public accounts for 18.4 million €, which Real Madrid illegally received.
‘Public funds must comply with the norms of loyal competitiveness, and in this case the investigated subsidies fail to meet said norms’ alleged the commissioner in a statement.
Despite the substance of the case, and the political repercussions which have been rigged (all these decisions were made the authorities controlled by the PP and Brussels has delayed the verdict to not inform an acting Government), and there has been no public appearance by Vestager to explain the three sanctions.
The second case resolved today approved the guarantees conceded by the Valencia Government to three football clubs between the years 2009 and 2013: Valencia, Hercules and Elche.
The clubs were suffering financial difficulties and the guarantee awarded via the Valencia Finance Institute, was granted with a favourable interest rate. ‘Having not paid back these guarantees, these clubs have benefitted with a financial advantage compared to the rest’, argued the Commission. For this motive, they demand 20.4 million € for Valencia, 6.1 for Hercules and 3.7 million for Elche.
There is a third case where the financial repercussions are much less. It concerns the privileges granted to four clubs (Real Madrid, Barcelona, Athletic de Bilbao and Osasuna) who have been paying tax as foundations since 1990. Instead of choosing the regime for sporting anonymous societies, they have been paying a lower amount of company tax – 25% instead of 30%.
The Government has already corrected this ‘discriminatory treatment’ in January of this year, but Brussels is reclaiming the restitution of the savings made for more than 20 years. In this case finally there is no money to be returned because the Commission regards the amount ranges from zero and five million to be recovered.
In all these analysed cases, the Commission has not directly valued if the money was taken from the tax payers or otherwise. What they censure is the benefits granted which have distorted the competition, granting privileges to some clubs over those following the market rules.
Spain must now negotiate with the European Competitiveness Authorities on how to recover the money, the final amount of which is yet to be agreed. The Spanish Government can also appeal the decision, which would slowdown the process of replacing aids.
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