Brussels set to give verdict on 'unlawful' aid to Spanish football clubs

Spain fan after the game

The European commission is expected to deliver its verdict on Monday on whether Spain wrongfully handed out tens of millions of euros in state aid to some of the country’s top football clubs.

The investigation centres on aid received by seven clubs, including Barcelona and Real Madrid, whose £86m player Gareth Bale is part of the first ever Welsh team to reach a semi-final in a major tournament at Euro 2016.

The Brussels inquiry was launched two-and-a-half years ago by the then competition commissioner, Joaquin Almunia. He said it would consider whether Spain had broken EU rules on public funding through tax breaks, property deals and loans.

The commission is expected to find against the Spanish state according to some reports. Its investigation will be seen as a clampdown on some of the excesses of the game in Spain, with regulators seeking to end the unlawful use of public money to fund some of the world’s richest clubs.

Real Madrid and Barcelona are the world’s two richest clubs by revenue according to the Deloitte Football Money League 2016.

It declined to comment before the decision was announced on Monday, but at the time the inquiry opened in December 2013, it said: “Professional football clubs should finance their running costs and investments with sound financial management rather than at the expense of the taxpayer.

“Member states and public authorities must comply with EU rules on state aid in this sector as in all economic sectors.”

The investigation focused on three elements, including possible corporate tax privileges enjoyed since 1990 by Real Madrid, Barcelona, Osasuna and Athletic Bilbao – a team that counts Almunia among its supporters.

Brussels also investigated a complex land deal struck between Real Madrid and the local authority in Madrid. It is thought the world’s richest football club might have to pay back more than €18m (£15m) if the commission does rule against the Spanish state.

The third element of the investigation focused on the legality of guarantees given by the publicly owned Valencia Institute of Finance for loans to Valencia, Hercules, and Elche football clubs while the clubs were “seemingly undergoing financial difficulties”.

“The commission has concerns that these measures provided significant advantages to the beneficiary clubs to the detriment of the clubs which have to operate without such support,” it said when opening the inquiry.

“In so far as the professional football clubs in question were facing financial difficulties at the time of the measures under scrutiny, they must be assessed on the basis of the EU guidelines that allow member states to grant aid for the rescue and restructuring of companies in difficulty if certain conditions are met.

“At this stage, the commission has doubts whether the measures comply with the guidelines, in particular because 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.”

It is unclear how much the Spanish clubs involved in the inquiry would be expected to pay back should the commission rule that Spain broke EU rules.

Meanwhile, the Financial Times reported that Brussels is expected to close its investigation into the public finding of five Dutch football clubs after finding no evidence of illegal state aid. The inquiry opened in March 2013 and clubs involved included PSV Eindhoven and MVV Maastricht.

Powered by Guardian.co.ukThis article was written by Angela Monaghan, for The Guardian on Sunday 3rd July 2016 16.31 Europe/London

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