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The Applicability and Application of the Market Economy Investor Principle: Lessons Learnt from the Financial Crisis

Małgorzata Agnieszka Cyndecka


Keywords: MEIP, Application, Applicability, Financial Crisis

One of the consequences of the financial crisis is a development and refinement of the Market Economy Investor Principle (MEIP). The MEIP is a well-established yardstick for determining whether a given State intervention confers an economic advantage upon a recipient undertaking, which it would not have obtained under normal market conditions. Although most State interventions in favour of financial institutions have aimed to remedy the systemic crisis, and thus amounted to aid, the MEIP has remained a vital instrument in applying Articles 107(1) TFEU and 61(1) EEA. As the relevant case law and decisional practice of the Commission and EFTA Surveillance Authority (ESA) demonstrate, the use of the MEIP under exceptional market conditions has raised some interesting issues. Those concern both its applicability and application. In particular, while ESA apparently excluded the applicability of the MEIP due to absence of ‘normal market conditions’, the Commission denied applying it to an amendment to repayment terms of aid. As regards the application of the MEIP, the ‘business-hostile’ conditions must be duly taken into account when assessing whether the State entered a given transaction on market terms.
Keywords: MEIP; Application; Applicability; Financial Crisis.

Małgorzata Agnieszka Cyndecka, PhD, Postdoctoral researcher at The Faculty of Law, University of Bergen. This article is based on a presentation held at the conference 'State Aid Control: Where Law and Economics Meet' on 30 September 2016 in Brussels, co-organised by Lexxion Publisher, Vrije Universiteit Brussel and E.CA Economics. For an update on the FIH case, see M Cyndecka, ‘FIH Holding and FIH Erhvervsbank v European Commission ∙ T‑386/14 ∙ Annotation’ (2017) 16 European State Aid Law Quarterly, 86.


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