State aid and the market economy operator principle
Produced in partnership with CMS
State aid and the market economy operator principle

The following Competition practice note Produced in partnership with CMS provides comprehensive and up to date legal information covering:

  • State aid and the market economy operator principle
  • Notion of State aid
  • The legal framework referring to the MEOP
  • The application of the MEOP
  • General principles
  • Capital injections
  • Public loans
  • Public guarantees
  • Public debts renegotiations
  • The sale and purchase of assets, goods and services

Economic transactions carried out by Member States do not confer an advantage in favour of an undertaking, and therefore do not constitute State aid under EU law, if they are carried out in line with normal market conditions.

The European Commission, confirmed by the Court of Justice, has set up the ‘market economy operator principle’ (MEOP) to identify the presence of State aid in cases of public investments in the form of capital injections: to determine whether a public investment constitutes State aid, it is necessary to assess whether, in similar circumstances, a private investor of a comparable size operating in normal market economy conditions would have made the same investment.

This principle has later been applied to different economic transactions (capital injections, loans, guarantees, sale and purchase of assets, goods and services, etc).

When applying the MEOP, only the benefits and obligations linked to the role of the State as an economic operator, and not those linked to its role as a public authority are to be taken into account. The MEOP is in principle not applicable if the State acts as a public authority rather than as an economic operator. In this regard, a State intervention cannot be driven by public policy reasons such as regional development or tourism. The MEOP should be applied leaving aside all considerations which exclusively relate to a Member State's

Navigate the law quickly and efficiently with Lexis®PSL
Imagine being able to quickly find up-to-date guidance on points of law and then easily pull up sources to support your advice. With LexisPSL, you can.
TAKE A FREE TRIAL TAKE A FREE TRIAL
Related documents:

Popular documents

LEXISNEXIS

Separation of powers—legislative, executive and judiciary

Source of the doctrine of the separation of powersThe origins of the doctrine are often traced to John Locke’s Second Treatise of Government (1689), in which he identified the 'executive' and 'legislative' powers as needing to be separate.‘… it may be too great a temptation to human frailty, apt to

LEXISNEXIS

Issue of redeemable shares

A limited company that proposes to issue redeemable shares must comply with the provisions of the Companies Act 2006 (CA 2006).Why do companies issue redeemable shares?A company may wish to issue redeemable shares so that it has an alternative way to return surplus capital to shareholders without

LEXISNEXIS

Letter to client on disclosure obligations under CPR 31

This Precedent letter covers disclosure obligations under CPR 31. It does not apply to proceedings subject to the disclosure pilot scheme under CPR PD 51U. For guidance on the disclosure pilot scheme, see Practice Note: Business and Property Courts—the disclosure pilot scheme. For a client letter on

LEXISNEXIS

Tomlin orders

Brexit: The UK's departure from the EU on exit day ie Friday 31 January 2020 has implications for practitioners dealing with provisions in the CPR relevant to cross border matters, including CPR 5.4C (discussed below). For guidance on the impact of Brexit on the CPR, see Cross border