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The MEOP in the Larko Case · Case T-423/14 Larko Geniki · Annotation by Małgorzata Cyndecka

Annotation on the Judgment of the General Court (Sixth Chamber) of 1 February 2018 in Case T-423/14 Larko Geniki Metalleftiki kai Metallourgiki AE v European Commission.

Małgorzata Cyndecka


Keywords: MEOP, burden of proof, prudent shareholder, firm in difficulties, State guarantees

When the State grants an economic advantage to an undertaking, it may avoid triggering Article 107(1) TFEU by complying with the Market Economy Operator Principle (MEOP). Yet, if the State invokes the MEOP in the course of the administrative procedure, it must establish unequivocally and on the basis of objective and verifiable evidence that it acted as a rational, profit-oriented, prudent and well-informed private market operator would have acted in similar circumstances under normal market conditions. If the State provides such information, the Commission is required to carry out an overall assessment, taking into account all relevant evidence in the case enabling it to determine whether the beneficiary would manifestly not have obtained comparable facilities from a private operator. While granting an economic advantage to an undertaking in financial difficulties does not necessarily amount to aid, the State must prove that it properly took into account the additional risk involved in a given measure when it decided to implement it. Ignoring such signs of a firm being in difficulty as increasing losses, diminishing turnover or mounting debt is not in line with the behaviour of a prudent private shareholder and it questions the economic rationality of the State’s conduct. This may entitle the Commission to qualify a given measure as aid.
Keywords: MEOP; burden of proof; prudent shareholder; firm in difficulties; State guarantees.

Małgorzata Agnieszka Cyndecka, PhD, Associate Professor at The Faculty of Law, University of Bergen, Member of BECCLE, Associate Editor of EStAL.


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