Wolters Kluwer The Market Economy Investor Test in EU State Aid Law: Applicability and Application (International Competition Law, 66)

For upwards of thirty years EU and EFTA courts have been using a test for applying the Market Economy Investor Principle (MEIP) to determine whether a state intervention amounts to granting of an economic advantage to a recipient undertaking. If the state wishes to act as a commercial operator, it must comply with the MEIP. Unsurprisingly, the test remains a difficult and controversial legal instrument, and its very existence and credibility have been questioned. This book unravels the notion of the MEIP, analysing its applicability in order to clarify doubts and misinterpretations. Such an understanding is crucial because of the negative consequences of the tests misapplication, and also because the ongoing process of opening markets for more competition blurs the distinction between the public and private sectors. The analysis addresses - What characterizes a prudent investor? When is it justified to consider a given public investor rational or reasonable? How should the economic or commercial soundness of state interventions be understood? What rate of return is required under the MEIP and how is it calculated? When should the profitability analysis be undertaken and why? The author examines both the theory behind the principle and its practical application, with detailed attention to case law and the Commissions guidelines explaining the tests mechanism. She considers the various critiques of the test and concludes with proposals for change. Practitioners, policymakers, and academics will appreciate the great clarification offered of the MEIP the character of an economic advantage under the MEIP and in aid scenarios, how to determine whether the MEIP is applicable to a given state measure, and how to apply the test according to its various subtypes and to atypical or complex interventions. They will find that the books systematic analysis goes a long way to ensuring a credible and reliable assessment of the applicability of state aid under Article 107(1) TFEU.