Nicole Robins, Laura Puglisi

European State Aid Law Quarterly, Volume 20 (2021), Issue 1, Page 74 - 86

Economic and financial analysis plays an increasing role in State aid assessments. It is often used to assess whether one of the criteria for State aid to exist is met − namely, whether the State’s intervention confers an economic advantage − as well as specific aspects of whether any aid is compatible with the relevant State aid rules. To determine whether a public measure confers an economic advantage on the beneficiary, the market economy operator principle (MEOP) test is often applied. The rationale behind the test is to assess whether the State is acting in the manner of a private investor. In the aviation sector, the MEOP is applied at various levels, ranging from funding provided by the State to airport owners or operators, to the relationship between publicly owned airports (or those that have received State aid) and airlines. This article provides an overview of the different levels at which the MEOP test is applied in the aviation sector, and its underlying economic and financial principles. Throughout the article, examples are provided to demonstrate how the MEOP test has been applied in practice. Keywords: market economy operator principle; MEOP; market economy investor principle; MEIP; benchmarking; pari passu; profitability analysis

Matthias Nordmann

European State Aid Law Quarterly, Volume 19 (2020), Issue 1, Page 99 - 100

Leigh Hancher

European State Aid Law Quarterly, Volume 18 (2019), Issue 4, Page 470 - 488

Until relatively recently, only a handful of State aid cases raised the question of who should discharge the burden of proof. In the past twelve months the issue has begun to surface more regularly. This article examines the role of presumptions in understanding how the burden of proof is allocated in State aid cases before the European courts. Presumptions are a well-established tool in EU competition law. In theory it is for the party alleging that a State aid has been granted — usually the Commission — to show that the State measure confers a selective advantage on the beneficiary. Depending on what ‘hat’ the Member State is wearing when it confers a benefit, the evidentiary burden may shift back to itself to rebut a presumption as to how it has or intends to intervene. This contribution examines the role of presumptions and the allocation of the burden of proof depending on whether the State claims that it acts as a market investor, whether it exercises a public prerogative or whether it arranges the provision of services of general economic interest. Finally, the article briefly considers the burden of proof on third parties, especially in cases where the state authorities have not actively engaged in the rebuttal of a presumption by the Commission.

Adina Claici, Norbert Maier

European State Aid Law Quarterly, Volume 18 (2019), Issue 1, Page 76 - 83

This article describes a recent State aid case that advances the boundaries in the analysis of the Market Economy Investor Principle beyond the level of complexity reached in previous cases. In 2017 the European Commission approved the aid to Paks II nuclear power station in Hungary following an in-depth investigation. We highlight the most original pieces of economic analysis and financial modelling that contributed to the decision. Among others, the Commission used multiple benchmarking methodologies to estimate the profitability of the investment and the parameters of the financial model. Furthermore, a complex probabilistic model ensured robustness of the results. Finally, we explain the reasoning provided by the Commission when rebutting some of the assumptions put forward by Hungary. Keywords: State aid; MEIP; Nuclear power; Hungary.

Jakub Kociubiński

European State Aid Law Quarterly, Volume 17 (2018), Issue 1, Page 43 - 53

The Market Economy Investor Principle (MEIP) is used to determine whether State intervention is an economically rational investment, carried out under normal market conditions, or whether it constitutes State aid within the meaning of Article 107(1) TFEU. It consists of testing whether a hypothetical, rational private investor would have used its resources in the same manner as the State did. The author is of the opinion that this principle is deficient in assessing large infrastructural projects, and therefore would like to propose its revision. The argument runs that these projects have unique features, making any investment comparison, not only theoretical but also unrealistic and fictitious. Keywords: MEIP; Comparability; Large Infrastructure Projects; Investment Aid.

Małgorzata Agnieszka Cyndecka

European State Aid Law Quarterly, Volume 16 (2017), Issue 4, Page 512 - 526

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.

Bernhard von Wendland

European State Aid Law Quarterly, Volume 16 (2017), Issue 2, Page 276 - 284