EU court cancels EUR 18.4 million Real Madrid state aid refund

The court cancels a European Commission decision from 2016.

Representative Image: Real Madrid had lodged an appeal against the European Commission decision in October, 2016. Photo: Getty Images

A top EU court on Wednesday cancelled a European Commission decision from 2016 that forced Spain to recover EUR 18.4 million from Real Madrid because it considered a real estate refund as illegal state aid.

“The Commission could not classify the disputed measure as state aid,” as it did not “sufficiently demonstrate that it conferred an advantage to the plaintiff,” said the ruling of the General Court of the European Union.

In a decision handed down in July, 2016, EU Competition Commissioner Margrethe Vestager said the club and the Madrid City Hall had agreed an illegal transaction involving the sale of municipal land. In the deal, the club had paid EUR 595,000 in 1998 for the land, but the operation had not come to fruition for technical reasons and authorities paid Real Madrid EUR 22.7 million in compensation in 2011.

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But according to a Barcelona firm mandated by the commission, it should have paid only EUR 4.3 million leaving the land in question overvalued by EUR 18.4 million, giving Real Madrid an unjustified advantage over other clubs.

Real Madrid lodged an appeal against this decision in October, 2016.

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“I am absolutely convinced that we will win,” club president Florentino Perez said at the time.

In February, 2019, the European Court of Justice annulled another commission decision involving four Spanish clubs, including Real, but also Barcelona, Osasuna and Athletic Bilbao, to repay illegal state aid.

These clubs were accused of having benefited, without justification, of a corporate tax rate five percent lower than that of other similar companies. However, the General Court decided the commission had erred in its assessment, not having already sufficiently proved that the contested measure was illegal.

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