The Perils of Ex Post Compensation of Public Services Obligations* Main points Providers of SGEI must maintain separate accounts. Parameters of compensation must be determined in advance. Ex-post formulation is not in conformity with State aid rules. Ex-post calculation of compensation that covers all costs and eliminates commercial risk is not compatible with State aid rules. Introduction The calculation of the compensation to be offered to providers of services of general economic interest is always a difficult and complex process. In this article I examine how compensation was calculated in the case of an Italian bus company and the reasons for which the Commission rejected it. In fact, the Italian authorities are not likely to be disappointed by this Commission decision, since
The EU Commission establishes that the compensation for the provision of inter-regional bus transportation services constitutes incompatible state aid as the requirement for ex ante determination of net costs has not been fulfilled (Simet)
* Article published on Lexxion State Aid Blog, republished in e-Competitions with the courtesy of the author(s). The original title of this article appears below the e-Competitions title. Authors are welcome to write an alternative article on this case/text, provided they have no relationships with a party or related third party. Article will need e-Competitions Board approval before publication.
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