The ‘Market Economy Investor Principle’ to Evaluate State Aid
| Date | 01 August 2015 |
| DOI | 10.1177/1023263X1502200405 |
| Published date | 01 August 2015 |
| Subject Matter | Article |
22 MJ 4 (2015) 553
THE ‘MARKET ECONOMY INVESTOR
PRINCIPLE’ TO EVALUATE STATE AID
Latest Developments and New Perspectives
S C*
ABSTRACT
e M EIP has traditionally played a central role to establish whether State mea sures entail
a selective advantage under Article107 TFEU. However, it is not completely clear whether
the MEIP can be considered a ‘principle’, or a ‘test’, since both de nitions are currently
utilized by practitioners and scholars. e thesis put forward here is that the MEIP is an
interpretative principle compose d of the private investor test, the private creditor test, and
the private vendor test. e application of the MEIP has witnessed a constant evolution
over the years, which brought about an increased relevance of th e principle. In this respect,
it is interesting to consider whe ther the major changes in the application of state aid rules
triggered by the nancial crisis have somehow a ected the MEIP and its traditional
features. e analysis carried out on this speci c point shows the MEIP has maintained
substantially unmodi ed its functional role and centrality.
Keywords: advantage; Ar ticle345 TFEU; market economy investor principle; selectivity;
state aid
* Ph.D. in European a nd Comparative Law, Trento University, Depart ment of Legal Sciences. LL. M. in
Competition Law a nd Economics, Brussels Sc hool of Competition. Lect urer in Economic Regulat ion,
Trento University, School of Economics . Admitted to the Ital ian Bar – samuel.corne lla@unitn.it.
I’d like to t hank Roberto Chie ppa, Vittorio di Bucci, B arbara Marchet ti, Silvia Pell izzari, and Valent ina
Vent rig li a fo r t hei r va lu abl e co mm ent s to pre vio us d ra s . I am also grate ful to the two sc holars involved
in the peer-revie w process, who provid ed very usefu l comments and sugge stions to improve thi s article.
Samuel Cornella
554 22 MJ 4 (2015)
§1. INTRODUCTION
e notion of state aid is wider i n scope than the notion of subsidy, as established in the
early case law referring to t he ECSC Treaty.1
For instance, Ar ticle107 TFEU applies to a r m’s purchase or rent of a publicly owned
property at less than t he market price, or to the opposite situation in which a company
sells goods to the state obta ining a higher price than the market one. L ikewise, state aid
conditions are met should a company enjoy privileged access to public infrastr uctures or
obtain risk capita l from the state under favourable terms.
e above mentioned examples entail an advantage for the bene ciary direc tly linked
to a state measure. By contrast, w hen the state behaves like a private investor or a private
lender, buyer and creditor, the condition referred to the advantage for a given enterprise
cannot be considered satis ed. As a consequence, the measures in question will not be
deemed state aid.
Establishing whether public authorities behave like private players is not a lways
straightforwa rd and adequate consideration must be made of the market economy
investor principle (MEIP).
e rst part (section 2) of this article focuses on broad issues, as the origins of the
MEIP and the general principles that characterize its application. An additional topic
considered is the MEIP’s scope of applicability, which recently faced developments
brought about by case law.
e second part (section 3) deals with the three tests developed to concretely apply
the MEIP in practice: the private investor test, the private creditor-guarantor test, and
the private vendor test. e thi rd part (section 4) concerns the met hodology to evaluate
the consistency of the public authorit ies’ action with the MEIP, distinguishing between
cases in which t he compatibility w ith market conditions c an be established empirically
and cases where such a practical evaluation needs to be replaced by other available
methods.
e last part (section 5) of the contribution concerns t he application of the MEIP
to the banking sector a er the nancial crisis. e aim of this section is to establish
whether the pecul iar nature of the banking and nancial se ctor and its contingent post-
2008 situation have somehow in uenced or limited the genera l application of the MEIP.
Fi na lly, th e c onc lus ion wi ll dr aw t og eth er som e cl os ing re mar ks , b ot h fr om a pr ac tic al
and theoretical p oint of view.
1 Case C-30/59 De Gezamenlijke Steenkolenmijnen in Limburg, EU:C:1961:2. On the not ion of state aid
see, among others , L. Hancher, T. Ottervange r and P.J. Slot, EU State Aids (Sweet & M axw ell, 2012); a nd
C. Quigley QC , European State Aid Law and Polic y (Hart Publishing, 2 009). On the speci c point, see
also L. Rubini, e D e nition o f Subsidy and State Aid. WTO and EC Law in C omparative Perspective
(Ox for d Un ive rsi ty Pre ss , 20 09) . Se e a ls o K. Bac on , European Union L aw of State Aid (Oxford Universit y
Press, 2013); and A. Biondi, ‘St ate Aid is Falling Dow n, Falling Down: an a nalysis of the Case L aw on
the Notion of Aid ’, 6 Common Market Law Review (2013), p.1719.
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