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Valencia, Elche and Hercules warned over illegal state aid

EU competition commissioner Joaquin Almunia has warned that any Spanish clubs found guilty of receiving illegal state aid will have to pay the millions of euros involved back quickly, with interest.

Almunia was responding to a question regarding the cases of Valencia, Elche and Hercules, who all received loan guarantees from the regional Valencian government, in moves the European Commission is investigating at present.

However, his comments could also apply to Real Madrid, who are under investigation by the EU authorities in relation to an apparently favourable "land-swap" with Madrid city-hall.

"If an investigation reveals that the three clubs in question have received state aid incompatible with EU rules, the commission would take a definitive decision to recover this aid, with interest, within a period of four months," Almunia said in quotes reported by the Europa Press news agency.

The regional government guaranteed a total of 86 million euros' worth of loans made to Valencia's "foundation," which used the money raised to buy shares in the Liga club.

This deal is apparently one reason why the takeover of the club by Singapore businessman Peter Lim remains uncompleted, over nine months after it was first proposed.

Lim's representative Kim Koh reportedly met with lender Bankia on Monday in an attempt to finally agree the final "haircut" which will be applied to the club's full debts of around 400 million euros, and the new owner could finally attend a game at Mestalla on Oct. 4 when Atletico Madrid visit.

Similar loan guarantees were taken advantage of by the directors of Hercules (18 million euros) and Elche (14 million euros). Both Valencia-based clubs remain in severe financial difficulties, and therefore could struggle to return the sums reportedly involved.

The EU's investigation into the Bernabeu land-swap is looking at a re-zoning of land elsewhere in the Spanish capital, which reportedly may have benefited the club to the tune of 22.7 million euros.

The 250 million euro Bernabeu redevelopment plans announced at October 2013's club AGM are currently on hold while this issue, and other legal challenges by local residents, are dealt with.