State Aid Law Blog

State Aid Uncovered Blog/Guest State Aid Blog

On a weekly basis Phedon Nicolaides posts critical analysis pieces on the latest State aid judgments and decisions on his blog State Aid Uncovered. Each article presents the main points of a court ruling or Commission‘s decision, places them in the context of similar case law or practice, assesses the underlying reasoning, and identifies any inconsistencies or contradictions.
Occasional guest blog posts by other State aid experts complement the State aid knowledge hub.

Join the debate now!

- MEIP ×

MEIP-Compliant Bank Recapitalisation: CEC Bank

An investor who is already a shareholder would take into account not only the return on new investment but also the impact on the overall profitability of the company in which capital is injected. Update on Temporary Framework: Number of approved and published covid-19 measures, as of 14 August 2020: 252* Legal basis: Article 107(2)(b): 27; Article 107(3)(b): 211; Article […]

A Curious Case of Port Concessions

The obligations of a concessionaire may be made less onerous in order to enable it to remain in operation. Any adjustment of the obligations takes into account the possible legal defences of the concessionaire. Introduction The Market Economy Investor Principle [MEIP] is a powerful concept. Its many variations attest to its versatility [e.g. market economy investor, operator, vendor, creditor]. It […]

Ex ante Assessment of Future Profitability is Absolutely Necessary

A private investor assesses the prospects of future profitability before it invests. The burden of proof lies with the Member State that claims it has acted as a private investor.   Introduction The market economy investor principle is based on a simple premise: before you commit your money you need to check how much you are likely to get back. […]

Imputability of an Aid Measure to the State Does not Require a Counterfactual

The fact that the state owns an undertaking is not enough to prove that the decisions of that undertaking can be attributed to the state. However, it is sufficient that the state was involved in the particular decision that transferred state resources for the benefit of another undertaking.   Introduction Several recent articles on this blog have examined the concept […]

The Effectiveness of Clear Guidance: The Case of Broadband Networks

This blog examines how much aid goes to support broadband networks and what lessons can be drawn from the Commission’s decisional practice.   Introduction A principal objective of the State Aid Modernisation was to free Commission resources from the time-consuming task of checking the conformity of routine measures of State aid. Consequently, the General Block Exemption Regulation was extended to […]

How to Apply the Market Economy Investor Principle and what Mistakes to Avoid: The Long-running Case of EDF

A market investor carries out a thorough ex ante analysis of the prospects of an investment before it commits any money.     Introduction In 2004, the European Commission concluded, in decision 2005/145, that France granted incompatible aid to Electricite de France [EDF]. The French government had converted tax liability into share capital in EDF. The Commission was of the […]

Market Economy Investor Principle

Public investment is free of State aid when it is made at the same time and on equal terms with investments by private investors. In the absence of an equivalent private investment, public investment does not constitute State aid when it is demonstrated ex ante that it is capable of generating market rates of return.   Introduction Public authorities are […]

A new misnomer in State aid law: single economic unit with separate legal personality (C 357/14 P, Dunamenti Erőmű/Commission)

electricity grid cables
The following blog post is a contributory piece by Emanuela Matei, Associate Researcher at the Centre of European Legal Studies, Bucharest. Matei holds a Juris Master in European Business Law (Lund University, June 2012), a Magister legum (Lund University, June 2010) and a BSc in Economics & Business Administration (Lund University, June 2009). We are very glad to welcome her […]

The Market Economy Investor Principle Applies also to Avoidance of Losses

A public authority can act as a private investor in paying to avoid costly contractual clauses. A public authority can act as a private investor in paying to bring forward future revenue. Introduction   When a market operator invests to make profit, its underlying logic is the same as when it pays to avoid losses. In both cases it is […]

Application of the MEIP to Transactions between Parent and Subsidiary Companies

The Market Economy Investor Principle also applies to transactions between related companies. A private investor enjoys a margin of discretion in deciding in favour or against an investment. However, despite that margin of discretion, a prudent private investor always carries out an assessment of the potential profitability of the investment before it commits any money.   Introduction When a public […]

Roundup of EStAL Intensive Workshop, London

workshop
Interactive Seminar on The Role of the Market Economy Investor Principle (MEIP) | Infrastructure Funding in Compliance with State Aid Rules March 11th 2015 was a busy day for the State Aid crowd who gathered at King’s College in London for an Intensive Workshop organized by Lexxion. First of all we would like to thank all those, both speakers and participants, […]

Restructuring and the Market Economy Investor Principle

Different interventions that aim to finance the same restructuring plan constitute a single measure. A private investor may consider a possible damage of its reputation from laying off workers but the damage has to be quantified. Finance support of employees provides an indirect benefit to the employer. Introduction   In this article I review two similar cases: a judgment of […]

Application of the Market Economy Investor Principle to a Company Processing Agricultural Products

When a public entity injects fresh capital in a company in which it is already a shareholder, the new capital does not constitute State aid when it satisfies three conditions: i) all shareholders contribute in proportion to the shares they own, ii) the private participation is simultaneous and iii) the private participation is economically significant. Introduction   In this article […]

The Importance of Precise Definition of Public Service Obligations

ship
The imposition of a public service obligation must be preceded by market analysis that shows that the market underprovides. For compensation of public service obligations to be compatible aid, it must satisfy the first three Altmark criteria. Surprisingly, the first three Altmark criteria must also be satisfied [in addition to the 4th criterion] for public service compensation in order not to constitute […]

Market Operator in Electricity Distribution: Long-term Purchasing Agreements Must Balance Risks and Rewards

electricity wires
A market operator accepts to be bound in long-term contracts, which entail more risk because market conditions may change, only when he gets compensated with more certainty that costs will remain stable. Contractual clauses which vary from standard commercial practice are suspect. A measure can be selective even when it uses objective criteria to define eligible beneficiaries. Trade can be affected and competition […]

Objectively Justified Pricing: The Market Economy Operator Principle

office table
Introduction: Objective justification of price differentiation In a landmark judgment 25 years ago [February 1988], the Court of Justice established that business behaviour that appears to deviate from normal market practices can still conform with the market economy operator principle [MEOP] which is a variation of the better known market economy investor principle [MEIP]. Both principles are based on the […]

Airport Operators and Budget Airlines [Commission Decision SA.23324: Finavia, Airpro and Ryanair at Tampere-Pirkkala Airport

people on the airport
During the past 18 months or so, the European Commission has launched more than 20 investigations in the funding of regional airports and the arrangements that these airports have concluded with budget airlines such as Ryanair. This posting analyses a very recent Commission decision which found that no State aid was granted to either the airport operator or Ryanair. This […]

The Market Economy Vendor Principle: Sale of Public Land by the Dutch Municipality of Leidschendam-Voorburg [Commission Decision SA.24123]

Cadastre
The previous posting examined a case where the European Commission applied the Market Economy Investor Principle [MEIP]. This is the principle that is used to determine whether there is state aid in commercial transactions between public authorities and undertakings. According to Article 345 of the Treaty on the Functioning of the European Union [TFEU], the European Union is neutral with […]

The Curious Case of Applying the Market Economy Investor Principle to a Monopoly

monopoly game
On 3 October 2012, the European Commission concluded, in case SA.33988, that OPAP, the Greek operator of games of chance received no state aid because the Market Economy Investor Principle applied.[1] At first glance there is nothing unusual about a finding of no aid. But, as always, the devil is in the detail. OPAP holds the exclusive rights to organise various […]

- MEIP ×

MEIP-Compliant Bank Recapitalisation: CEC Bank

An investor who is already a shareholder would take into account not only the return on new investment but also the impact on the overall profitability of the company in which capital is injected. Update on Temporary Framework: Number of approved and published covid-19 measures, as of 14 August 2020: 252* Legal basis: Article 107(2)(b): 27; Article 107(3)(b): 211; Article […]

A Curious Case of Port Concessions

The obligations of a concessionaire may be made less onerous in order to enable it to remain in operation. Any adjustment of the obligations takes into account the possible legal defences of the concessionaire. Introduction The Market Economy Investor Principle [MEIP] is a powerful concept. Its many variations attest to its versatility [e.g. market economy investor, operator, vendor, creditor]. It […]

Ex ante Assessment of Future Profitability is Absolutely Necessary

A private investor assesses the prospects of future profitability before it invests. The burden of proof lies with the Member State that claims it has acted as a private investor.   Introduction The market economy investor principle is based on a simple premise: before you commit your money you need to check how much you are likely to get back. […]

Imputability of an Aid Measure to the State Does not Require a Counterfactual

The fact that the state owns an undertaking is not enough to prove that the decisions of that undertaking can be attributed to the state. However, it is sufficient that the state was involved in the particular decision that transferred state resources for the benefit of another undertaking.   Introduction Several recent articles on this blog have examined the concept […]

The Effectiveness of Clear Guidance: The Case of Broadband Networks

This blog examines how much aid goes to support broadband networks and what lessons can be drawn from the Commission’s decisional practice.   Introduction A principal objective of the State Aid Modernisation was to free Commission resources from the time-consuming task of checking the conformity of routine measures of State aid. Consequently, the General Block Exemption Regulation was extended to […]

How to Apply the Market Economy Investor Principle and what Mistakes to Avoid: The Long-running Case of EDF

A market investor carries out a thorough ex ante analysis of the prospects of an investment before it commits any money.     Introduction In 2004, the European Commission concluded, in decision 2005/145, that France granted incompatible aid to Electricite de France [EDF]. The French government had converted tax liability into share capital in EDF. The Commission was of the […]

Market Economy Investor Principle

Public investment is free of State aid when it is made at the same time and on equal terms with investments by private investors. In the absence of an equivalent private investment, public investment does not constitute State aid when it is demonstrated ex ante that it is capable of generating market rates of return.   Introduction Public authorities are […]

A new misnomer in State aid law: single economic unit with separate legal personality (C 357/14 P, Dunamenti Erőmű/Commission)

electricity grid cables
The following blog post is a contributory piece by Emanuela Matei, Associate Researcher at the Centre of European Legal Studies, Bucharest. Matei holds a Juris Master in European Business Law (Lund University, June 2012), a Magister legum (Lund University, June 2010) and a BSc in Economics & Business Administration (Lund University, June 2009). We are very glad to welcome her […]

The Market Economy Investor Principle Applies also to Avoidance of Losses

A public authority can act as a private investor in paying to avoid costly contractual clauses. A public authority can act as a private investor in paying to bring forward future revenue. Introduction   When a market operator invests to make profit, its underlying logic is the same as when it pays to avoid losses. In both cases it is […]

Application of the MEIP to Transactions between Parent and Subsidiary Companies

The Market Economy Investor Principle also applies to transactions between related companies. A private investor enjoys a margin of discretion in deciding in favour or against an investment. However, despite that margin of discretion, a prudent private investor always carries out an assessment of the potential profitability of the investment before it commits any money.   Introduction When a public […]

Roundup of EStAL Intensive Workshop, London

workshop
Interactive Seminar on The Role of the Market Economy Investor Principle (MEIP) | Infrastructure Funding in Compliance with State Aid Rules March 11th 2015 was a busy day for the State Aid crowd who gathered at King’s College in London for an Intensive Workshop organized by Lexxion. First of all we would like to thank all those, both speakers and participants, […]

Restructuring and the Market Economy Investor Principle

Different interventions that aim to finance the same restructuring plan constitute a single measure. A private investor may consider a possible damage of its reputation from laying off workers but the damage has to be quantified. Finance support of employees provides an indirect benefit to the employer. Introduction   In this article I review two similar cases: a judgment of […]

Application of the Market Economy Investor Principle to a Company Processing Agricultural Products

When a public entity injects fresh capital in a company in which it is already a shareholder, the new capital does not constitute State aid when it satisfies three conditions: i) all shareholders contribute in proportion to the shares they own, ii) the private participation is simultaneous and iii) the private participation is economically significant. Introduction   In this article […]

The Importance of Precise Definition of Public Service Obligations

ship
The imposition of a public service obligation must be preceded by market analysis that shows that the market underprovides. For compensation of public service obligations to be compatible aid, it must satisfy the first three Altmark criteria. Surprisingly, the first three Altmark criteria must also be satisfied [in addition to the 4th criterion] for public service compensation in order not to constitute […]

Market Operator in Electricity Distribution: Long-term Purchasing Agreements Must Balance Risks and Rewards

electricity wires
A market operator accepts to be bound in long-term contracts, which entail more risk because market conditions may change, only when he gets compensated with more certainty that costs will remain stable. Contractual clauses which vary from standard commercial practice are suspect. A measure can be selective even when it uses objective criteria to define eligible beneficiaries. Trade can be affected and competition […]

Objectively Justified Pricing: The Market Economy Operator Principle

office table
Introduction: Objective justification of price differentiation In a landmark judgment 25 years ago [February 1988], the Court of Justice established that business behaviour that appears to deviate from normal market practices can still conform with the market economy operator principle [MEOP] which is a variation of the better known market economy investor principle [MEIP]. Both principles are based on the […]

Airport Operators and Budget Airlines [Commission Decision SA.23324: Finavia, Airpro and Ryanair at Tampere-Pirkkala Airport

people on the airport
During the past 18 months or so, the European Commission has launched more than 20 investigations in the funding of regional airports and the arrangements that these airports have concluded with budget airlines such as Ryanair. This posting analyses a very recent Commission decision which found that no State aid was granted to either the airport operator or Ryanair. This […]

The Market Economy Vendor Principle: Sale of Public Land by the Dutch Municipality of Leidschendam-Voorburg [Commission Decision SA.24123]

Cadastre
The previous posting examined a case where the European Commission applied the Market Economy Investor Principle [MEIP]. This is the principle that is used to determine whether there is state aid in commercial transactions between public authorities and undertakings. According to Article 345 of the Treaty on the Functioning of the European Union [TFEU], the European Union is neutral with […]

The Curious Case of Applying the Market Economy Investor Principle to a Monopoly

monopoly game
On 3 October 2012, the European Commission concluded, in case SA.33988, that OPAP, the Greek operator of games of chance received no state aid because the Market Economy Investor Principle applied.[1] At first glance there is nothing unusual about a finding of no aid. But, as always, the devil is in the detail. OPAP holds the exclusive rights to organise various […]

- MEIP ×

MEIP-Compliant Bank Recapitalisation: CEC Bank

An investor who is already a shareholder would take into account not only the return on new investment but also the impact on the overall profitability of the company in which capital is injected. Update on Temporary Framework: Number of approved and published covid-19 measures, as of 14 August 2020: 252* Legal basis: Article 107(2)(b): 27; Article 107(3)(b): 211; Article […]

A Curious Case of Port Concessions

The obligations of a concessionaire may be made less onerous in order to enable it to remain in operation. Any adjustment of the obligations takes into account the possible legal defences of the concessionaire. Introduction The Market Economy Investor Principle [MEIP] is a powerful concept. Its many variations attest to its versatility [e.g. market economy investor, operator, vendor, creditor]. It […]

Ex ante Assessment of Future Profitability is Absolutely Necessary

A private investor assesses the prospects of future profitability before it invests. The burden of proof lies with the Member State that claims it has acted as a private investor.   Introduction The market economy investor principle is based on a simple premise: before you commit your money you need to check how much you are likely to get back. […]

Imputability of an Aid Measure to the State Does not Require a Counterfactual

The fact that the state owns an undertaking is not enough to prove that the decisions of that undertaking can be attributed to the state. However, it is sufficient that the state was involved in the particular decision that transferred state resources for the benefit of another undertaking.   Introduction Several recent articles on this blog have examined the concept […]

The Effectiveness of Clear Guidance: The Case of Broadband Networks

This blog examines how much aid goes to support broadband networks and what lessons can be drawn from the Commission’s decisional practice.   Introduction A principal objective of the State Aid Modernisation was to free Commission resources from the time-consuming task of checking the conformity of routine measures of State aid. Consequently, the General Block Exemption Regulation was extended to […]

How to Apply the Market Economy Investor Principle and what Mistakes to Avoid: The Long-running Case of EDF

A market investor carries out a thorough ex ante analysis of the prospects of an investment before it commits any money.     Introduction In 2004, the European Commission concluded, in decision 2005/145, that France granted incompatible aid to Electricite de France [EDF]. The French government had converted tax liability into share capital in EDF. The Commission was of the […]

Market Economy Investor Principle

Public investment is free of State aid when it is made at the same time and on equal terms with investments by private investors. In the absence of an equivalent private investment, public investment does not constitute State aid when it is demonstrated ex ante that it is capable of generating market rates of return.   Introduction Public authorities are […]

A new misnomer in State aid law: single economic unit with separate legal personality (C 357/14 P, Dunamenti Erőmű/Commission)

electricity grid cables
The following blog post is a contributory piece by Emanuela Matei, Associate Researcher at the Centre of European Legal Studies, Bucharest. Matei holds a Juris Master in European Business Law (Lund University, June 2012), a Magister legum (Lund University, June 2010) and a BSc in Economics & Business Administration (Lund University, June 2009). We are very glad to welcome her […]

The Market Economy Investor Principle Applies also to Avoidance of Losses

A public authority can act as a private investor in paying to avoid costly contractual clauses. A public authority can act as a private investor in paying to bring forward future revenue. Introduction   When a market operator invests to make profit, its underlying logic is the same as when it pays to avoid losses. In both cases it is […]

Application of the MEIP to Transactions between Parent and Subsidiary Companies

The Market Economy Investor Principle also applies to transactions between related companies. A private investor enjoys a margin of discretion in deciding in favour or against an investment. However, despite that margin of discretion, a prudent private investor always carries out an assessment of the potential profitability of the investment before it commits any money.   Introduction When a public […]

Roundup of EStAL Intensive Workshop, London

workshop
Interactive Seminar on The Role of the Market Economy Investor Principle (MEIP) | Infrastructure Funding in Compliance with State Aid Rules March 11th 2015 was a busy day for the State Aid crowd who gathered at King’s College in London for an Intensive Workshop organized by Lexxion. First of all we would like to thank all those, both speakers and participants, […]

Restructuring and the Market Economy Investor Principle

Different interventions that aim to finance the same restructuring plan constitute a single measure. A private investor may consider a possible damage of its reputation from laying off workers but the damage has to be quantified. Finance support of employees provides an indirect benefit to the employer. Introduction   In this article I review two similar cases: a judgment of […]

Application of the Market Economy Investor Principle to a Company Processing Agricultural Products

When a public entity injects fresh capital in a company in which it is already a shareholder, the new capital does not constitute State aid when it satisfies three conditions: i) all shareholders contribute in proportion to the shares they own, ii) the private participation is simultaneous and iii) the private participation is economically significant. Introduction   In this article […]

The Importance of Precise Definition of Public Service Obligations

ship
The imposition of a public service obligation must be preceded by market analysis that shows that the market underprovides. For compensation of public service obligations to be compatible aid, it must satisfy the first three Altmark criteria. Surprisingly, the first three Altmark criteria must also be satisfied [in addition to the 4th criterion] for public service compensation in order not to constitute […]

Market Operator in Electricity Distribution: Long-term Purchasing Agreements Must Balance Risks and Rewards

electricity wires
A market operator accepts to be bound in long-term contracts, which entail more risk because market conditions may change, only when he gets compensated with more certainty that costs will remain stable. Contractual clauses which vary from standard commercial practice are suspect. A measure can be selective even when it uses objective criteria to define eligible beneficiaries. Trade can be affected and competition […]

Objectively Justified Pricing: The Market Economy Operator Principle

office table
Introduction: Objective justification of price differentiation In a landmark judgment 25 years ago [February 1988], the Court of Justice established that business behaviour that appears to deviate from normal market practices can still conform with the market economy operator principle [MEOP] which is a variation of the better known market economy investor principle [MEIP]. Both principles are based on the […]

Airport Operators and Budget Airlines [Commission Decision SA.23324: Finavia, Airpro and Ryanair at Tampere-Pirkkala Airport

people on the airport
During the past 18 months or so, the European Commission has launched more than 20 investigations in the funding of regional airports and the arrangements that these airports have concluded with budget airlines such as Ryanair. This posting analyses a very recent Commission decision which found that no State aid was granted to either the airport operator or Ryanair. This […]

The Market Economy Vendor Principle: Sale of Public Land by the Dutch Municipality of Leidschendam-Voorburg [Commission Decision SA.24123]

Cadastre
The previous posting examined a case where the European Commission applied the Market Economy Investor Principle [MEIP]. This is the principle that is used to determine whether there is state aid in commercial transactions between public authorities and undertakings. According to Article 345 of the Treaty on the Functioning of the European Union [TFEU], the European Union is neutral with […]

The Curious Case of Applying the Market Economy Investor Principle to a Monopoly

monopoly game
On 3 October 2012, the European Commission concluded, in case SA.33988, that OPAP, the Greek operator of games of chance received no state aid because the Market Economy Investor Principle applied.[1] At first glance there is nothing unusual about a finding of no aid. But, as always, the devil is in the detail. OPAP holds the exclusive rights to organise various […]

How to Submit a Blog Post

Do you want to share your analysis of a State aid law topic? We invite you to submit your post on, for example: recent European, national or international judgments or legislation with relevance to EU State aid law; new developments, publications, hot topics in EU State aid law. The recommended length of the post is 500-2,000 words incl. references (endnotes). Your analysis will be published under the category ‘Guest State Aid Blog’.

Here’s how you can publish a post on the Blog as a guest author:

Step 1: Submit your draft post as a Word file to stateaidhub[a]lexxion.eu.

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