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State aid probe could hit West Ham bid


West Ham's bid for a tenancy at the Olympic Stadium could be held up by a state aid probe by the European Commission.   Competition commissioner Alexander Italinier has given notice of an investigation into the public financing of stadiums used by professional clubs.    

The inquiry is not limited to Britain, but covers all member states, some of which have made much more extensive use of public money to build stadiums.   State aid is one of those areas where the Commission has extensive executive powers.   It is a curious mixture of legal enforcement and politics with deals often being done at the end of the day.  Nevertheless, the Commission has real teeth as is shown by the order to Royal Bank of Scotland to divest some of its branches.

It is believed that the investigation was prompted by an anonymous complaint, but it is not known whether this was about the Olympic Stadium in particular or football in general.   There was an earlier state aid complaint about the Stadium being given to a football club after the end of the Games.  The Government got round this by restarting the process with new criteria, replacing a proposed leasehold arrangement by a tenancy.

A new complaint could be based on the substantial costs to the taxpayer of converting the stadium for use by a football club, in particular bringing fans nearer to the players by installing retractable seats over the athletic track behind the goals.