Jakub Kociubiński

European State Aid Law Quarterly, Jahrgang 22 (2023), Ausgabe 1, Seite 4 - 16

Even though the economic situation remains precarious, the Covid-19 economic shock has subsided enough to allow us to take stock of the European Union (EU) responses to the pandemic and appraise them in the context of emerging trends. The author argues that there are early precursors of such trends – referred to as the ‘Three Poisons’ – observable in interpretive and legislative approaches to Member States’ aid measures. These are: the easier justification of extended lifelines without adequately recognising the need for adaptation to new market conditions, and moral hazard associated with subsidy dependence; the blurring of lines between what is theoretically rational and what is obtainable under crisis market conditions thereby distorting the results of the Market Economy Operator Test; the increasing reliance on ad hoc frameworks, and highly situation-specific interpretations potentially eroding the pre-existing acquis. In this context, the purpose of this article is to identify post-Covid trends which negatively affect or might affect the long-term effectiveness of the EU State aid control system. Based on this, to assess whether these ‘poisons’ can and should be opposed. This analysis will conclude with de lege lata and de lege ferenda recommendations. Keywords: COVID-19; market economy operator test; MEOP; moral hazard; ad hoc regulation; common assessment criteria

Cees Dekker, Ekram Belhadj

European State Aid Law Quarterly, Jahrgang 22 (2023), Ausgabe 1, Seite 95 - 100

Even where the government acts as the purchaser of services, an assessment of whether it has acted in accordance with the market economy operator principle requires an examination of all the relevant facts. The fact that the government acted through private companies, that the government pursued public policy objectives or that there was no tender procedure is not a reason to exclude the application of the market economy operator principle, the Court of Justice ruled in this case. The Court of Justice confirmed that the burden of proof as to whether the MEOP has been complied with and whether an advantage has been conferred on a company lies with the Commission.

Caroline Buts, Malgorzata Agnieszka Cyndecka, José Luis Buendía

European State Aid Law Quarterly, Jahrgang 20 (2021), Ausgabe 3, Seite 397 - 426

Doortje Ninck Blok, Gerard van der Wal

European State Aid Law Quarterly, Jahrgang 20 (2021), Ausgabe 2, Seite 284 - 291

The General Court handed down a judgement in 2020 in which it annulled the Commission’s Decision regarding State aid granted to Valencia Club de Fútbol through a €75 million (regional) government guarantee. The Commission qualified the guarantee granted by a financial entity under the supervision of the Regional Government of Valencia, intended to cover the bank loans to Fundación Valencia to enable Fundación Valencia to acquire shares in Valencia Club de Fútbol (the beneficiary according to the Commission and General Court), as unlawful state aid in the meaning of Article 107(1) TFEU. This annotation elaborates on two pleas brought forward by Valencia Club de Fútbol: (i) manifest errors of assessment in the characterisation of an advantage and (ii) manifest errors of assessment when calculating the amount of aid. The General Court considered that the Commission made an error of assessment when applying the market economy operator principle, where the Commission did not carry out an overall assessment. Furthermore, the Commission did not sufficiently support the finding that there was no market price for a similar non-guaranteed loan. In their conclusion, the annotators address the application of the Guarantee Notice by the Commission.

Nicole Robins, Laura Puglisi

European State Aid Law Quarterly, Jahrgang 20 (2021), Ausgabe 1, Seite 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, Jahrgang 19 (2020), Ausgabe 1, Seite 99 - 100

Marianne Clayton, Maria Segura, Lara Manuel

European State Aid Law Quarterly, Jahrgang 19 (2020), Ausgabe 3, Seite 372 - 377

On 13 May 2020, the General Court of the EU rendered three judgments on the actions brought by Volotea, easyJet and Germanwings seeking the annulment of Commission Decision SA.33983. In this Decision, the Commission had inter alia concluded that the aid scheme ‘Compensation to Sardinian airports for public service obligations’ entailed the grant of incompatible aid to several airlines that had concluded commercial agreements with airport operators for the development of the island as a tourist destination. The General Court analysed in these judgments each of the criteria of the notion of State aid on its own merits and provided particularly worth-noting reasoning on concepts such as imputability, indirect advantage, the application of the MEOP or the definition of aid scheme.

Małgorzata Cyndecka

European State Aid Law Quarterly, Jahrgang 18 (2019), Ausgabe 2, Seite 157 - 168

Following the landmark judgments in Ryanair of 2008, EDF of 2012 or ING of 2014, it is no longer disputed that one distinguishes between the applicability of the Market Economy Operator Principle (MEOP) and its application. Yet, one of the most relevant consequences of making that distinction - the allocation of the burden of proof - still raises controversy. When the GC annulled the Commission’s decision in EDF due to an insufficient and flawed assessment of the applicability of the MEOP, the Commission, EFTA Surveillance Authority (ESA) and AG Mazák argued that the GC erred in law by reversing the burden of proof. The same argument was raised by the Commission in Buczek Automotive of 2013. In Frucona Košice II of 2017, the Commission claimed that the GC created a new requirement imposing on the Commission an ‘excessive burden of having to seek all “imaginable” evidence and information’ when it verifies compliance with the MEOP. In all those cases, the CJEU disagreed with the Commission. In 2018, however, the EU Courts handed down judgments concerning the MEOP where the Commission’s line of argument was more successful. Most importantly, EDF, Larko and Duferco seem to have provided more clarity with respect to discharging the burden of proof when establishing the applicability of the MEOP and its application and, in particular, the Commission’s obligations in this regard. Given the importance of apportioning the burden of proof and the difficulties with that issue resulting from the distinction between the applicability and application, more clarifications from the EU Courts are very much welcome. Keywords: Applicability and application of the MEOP; Burden of proof; Scope of Commission’s obligations.

Małgorzata Cyndecka

European State Aid Law Quarterly, Jahrgang 18 (2019), Ausgabe 2, Seite 180 - 185

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.

Anne Louise Bengt Jespersen

European State Aid Law Quarterly, Jahrgang 18 (2019), Ausgabe 4, Seite 458 - 469

The Market Economy Operator Principle (MEOP) is an essential tool in State aid law when determining whether a specific State measure confers an economic advantage within the meaning of Article 107(1) TFEU. Despite the many clarifications in the jurisprudence over the years, the applicability of the MEOP to specific economic transactions and the assessment of the economic rationality of a State measure continue to be subject to debate before the Commission and the EU Courts. Since the ruling of the Court of Justice in EDF, a recurring question in this debate has been the apportioning of the burden of proof in cases where the MEOP is invoked by the Member State and/or the alleged aid beneficiary. In more recent cases, the EU Courts have further developed the principles concerning the apportioning of the burden of proof as well as the standard of proof required on the part of the Commission and the Member States, respectively. This article analyses the approach of the Commission and the EU Courts with respect to the burden of proof in MEOP Cases prior to and after EDF, in SACE, Larko and Frucona Košice. Furthermore, the article reflects on the latest developments in the EU Courts’ Case law and points to a potential ambiguity therein. Keywords: MEOP; Burden of proof; Requirement of evidence ex ante; Allocation of burden of proof.