The Market Economy Investor Test in EU State Aid Law: Applicability and Application

Name: The Market Economy Investor Test in EU State Aid Law: Applicability and Application
Brand: Kluwer Law International
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Malgorzata Cyndecka(Autor*in)

Kluwer Law International (Verlag)

Erschienen am 5. Mai 2016

386 Seiten

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Beschreibung

For upwards of thirty years EU and EFTA courts have been using a test for applying the Market Economy Investor Principle (MEIP) 10 determine whether a state intervention amounts 10 granting of an economic advantage 10 a recipient undertaking. If the stale wishes 10 set 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 nation of the MEIP, analysing its applicability in order 10 clarify doubts and misinterpretations. Such an understanding is crucial because of the negative consequences of the test's 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 such questions as the following;

- - What characterizes a 'prudent' investor?

- - When is it justified to consider a given public investor 'rational' or 'reasonable'?

- - How should too '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 too principle and its practical application, with detailed attention to case law and the Commission's guidelines explaining the test's mechanism. Soo considers the various critiques of the test and concludes with proposals for change.

Practitioners, policymakers, and academics will appreciate the great clarification offered of too MEIP - the character of an economic advantage under the MEIP and in aid scenarios, how to determine whether the MEIP is applicable 10 a given state measure, and how 10 apply the test according 10 its various subtypes and to atypical or complex interventions. They will find that too book's systematic analysis goes a long way to ensuring a credible and reliable assessment of the applicability of state aid under Article 107(1) TFEU.

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Inhalt

Intro
Halftitle Page
Volume
Title Page
Copyright Page
Dedication
Table of Contents
Preface
List of Abbreviations
PART I Introduction, Objectives, Delimitations and Methodology
CHAPTER 1 Introduction
1.1 Subject of This Book
1.2 Objectives
1.3 Delimitations
1.4 On the Relation between the EU and EEA Law
1.5 Legal Sources and Their Use
1.6 Note on Citation and Nomenclature
1.7 On the Use of the Term the 'MEIP' : 'The Devil Is Known by Many Names'
1.8 Structure
PART II Introductory Remarks on the Notion of the MEIP
CHAPTER 2 The Dual Capacity of State and the MEIP
2.1 Introduction
2.2 The Notion of Aid
2.3 Origins and Endorsement of the MEIP
2.3.1 Introduction
2.3.2 Written Question to the Commission of 1963
2.3.3 Commission Decision on State Aid to the Steel Industry of 1981
2.3.4 Transparency Directive of 1980
2.3.5 The Council and the Parliament's Endorsement of the MEIP in 1981
2.3.6 The Equity Holdings Communication of 1984
2.3.7 The Court's Endorsement of the MEIP in 1986
2.3.8 Commission Communication on Public Undertakings of 1993
2.3.9 Non-binding Sector-and Aid Instrument-Specific Commission Guidelines
2.4 Compliance with the MEIP and Granting Aid: What Economic Advantage and in Whose Favour?
2.5 Conclusions
PART III The Applicability of MEIP
CHAPTER 3 Introduction
3.1 Preliminary Remarks
3.2 The Structure of Examination
CHAPTER 4 AG Lenz's View on the Applicability of the MEIP
4.1 Introduction
4.2 AG Lenz in Meura and Boch II
CHAPTER 5 Hytasa: Making a Distinction between the Two Capacities of the State
5.1 Introduction
5.2 The 'Hytasa Formula'
5.3 The Structure of Analysing the Application of Hytasa
5.4 Hytasa at the Stage of Applying the MEIP
5.4.1 A Choice between Privatisation, Liquidation and Restructuring of a Public Undertaking
5.4.2 Aid in Favour of the Restructured/Recapitalised and/or Privatised Undertaking
5.4.2.1 Introduction
5.4.2.2 The Scope of Liabilities of a Public Shareholder
5.4.2.3 The Costs of Aid That Was Granted in the Past and Subsequent Applications of the MEIP
5.4.2.3.1 Introduction
5.4.2.3.2 The Gröditzer Stahlwerke Approach
5.4.2.3.3 Gröditzer Stahlwerke and Unlimited State Guarantees in Favour of Public Credit Institutions
5.4.2.3.4 Criticism of the Groditzer Stahlwerke Approach to Unlimited State Guarantees
5.4.2.3.5 Are Unlimited State Guarantees Comparable to the Structures of Liability in the Private Sector?
5.4.2.3.6 Are Political Statements Comparable to Unlimited State Guarantees?
5.4.2.3.7 Conclusions
5.4.2.4 Do Costs of Social Nature Always Fall within the Public Authority Dimension?
5.4.2.4.1 The 'General Rule' on the 'Public Authority Character' of Social Costs
5.4.2.4.2 Are There Exemptions from the 'General Rule' on Social Costs?
5.4.2.4.3 How to Distinguish between Two Types of Social Costs under the MEIP?
5.4.2.4.4 Conclusions
5.4.3 Aid in Favour of the Purchaser
5.4.3.1 Introduction
5.4.3.2 Fort Malakoff
5.4.3.3 Privatisation of Bank Burgenland
5.4.3.4 Conclusions
5.5 Applying Hytasa for the Purpose of Determining the Applicability of the MEIP
5.5.1 Introduction
5.5.2 'No Market Economy Investor Would Have Found Itself in the Situation of the Public Shareholder'
5.5.2.1 Linde
5.5.2.2 Koninklijke Schelde Groep and Hellenic Shipyards
5.5.3 Does the Fact of Having Benefitted from Aid in the Past Exclude the Applicability of the MEIP to Measures That Were Granted at Some Later Point in Time?
5.5.3.1 Does the MEIP Apply to an Amendment to Repayment terms of Compatible Aid?
5.5.3.1.1 Do ING and BB Contradict Each Other?
5.6 Conclusions
CHAPTER 6 The Relation between the Fulfilment of Obligations, Which the State Assumed as a Public Authority, and the Exercise of Public Powers
6.1 Introduction
6.2 Ryanair and EDF: Factual Background and the Commission's Position on the Applicability of the MEIP
6.3 AG Léger on the Applicability of the MEIP in Altmark
6.4 The Judicial Review in Ryanair and EDF
6.4.1 The Position of the CFI in Ryanair
6.4.2 The Position of the GC in EDF
6.4.3 The Position of the ECJ in EDF
6.4.3.1 Has the GC Distorted and Misinterpreted the Facts of EDF?
6.4.3.2 Has the Commission in EDF Mixed the Applicability of the MEIP with Its Application?
6.4.3.3 The (Mis-)interpretation of Article 107(1) TFEU
6.5 Conclusions
CHAPTER 7 The Applicability of the MEIP Post-EDF
7.1 Introduction
7.2 Has the Court Departed from Pre-existing Case Law?
7.3 The Concept of an Undertaking in Determining the Applicability of the MEIP
7.3.1 Introduction
7.3.2 AceaElectrabel: Two Different Concepts of an Undertaking?
7.3.3 The Relevance ofSAT Fluggesellschaft
7.4 Has EDF Established the Applicability of the MEIP to AU Tax Measures?
7.5 The Applicability of the MEIP to Tax Schemes
7.6 Difference in Cost of Capital
7.7 The Applicability of the MEIP and State Resources
7.8 The MEIP as a 'General Standard'
7.9 Was the Sole Ownership of EDF a Sine Qua Non Condition for Considering the MEIP Applicable?
7.10 Has EDF Shed Light on the Applicability of the MEIP?
7.11 The Post-EDF Approach to the (Non-)applicability of the MEIP to Unlimited State Guarantees
CHAPTER 8 The Applicability of the MEIP to Measures That Were Adopted in Relation to the 2008 Financial Crisis
8.1 Introduction
8.2 'Measures That Were Adopted in Relation to the 2008 Financial Crisis'
8.3 How Does ESA Approach the Applicability of the MEIP in the 'Financial Crisis Decisions'?
8.4 Does the Commission's Practice Support the Non-applicability of the MEIP because of the 2008 Financial Crisis?
8.5 What is the Commission's Approach to the MEIP in the 2008 Financial Crisis Cases?
8.6 Conclusions
CHAPTER 9 The Applicability of the MEIP to the Financing of Services of General Economic Interest
9.1 Introduction
9.2 The 'Efficiency Criterion': Its Relation to the MEIP and Limitations
9.3 Chronopost I
9.4 BUPA
9.5 The 'Objective-Based' Approach Revised?
9.6 Conclusions: The 'Efficiency Criterion' as a 'Special' Subtype of the MEIP
PART IV The Application of the MEIP
CHAPTER 10 Preliminary Remarks
10.1 The Objective of Application
10.1.1 What Private Investor?
10.2 The Structure of Examination of the Application of the MEIP
CHAPTER 11 Economic and Non-economic Objectives Pursued by a Public Investor
11.1 Introduction
11.2 What Must a Public Investor Do under the MEIP?
11.3 What Must a Public Investor Not Do under the MEIP?
11.4 Conclusions
CHAPTER 12 From Whose Perspective Should One Verify the Profitability of a State Intervention?
12.1 Introduction
12.2 Helaba I
12.3 What Can Be Learnt from Helaba I?
12.3.1 Why Should One Reject the 'Universal' Perspective of the Grantor?
12.3.2 The Choice between the Recipient and the Grantor's Perspective in Helaba I
12.3.3 The Consequences of the Two Perspectives under the MEIP
12.4 Chronopost I. 'Reference to the Objective and Verifiable Elements Which Are Available'
12.5 Conclusions
CHAPTER 13 What Rate of Return Is Required under the MEIP and How to Calculate It?
13.1 Introduction
13.2 The Adequate Rate of Return in the Commission Communications
13.3 The Profitability Assessment from the Economic Perspective
13.4 The Criterion of 'the Average Rate of Return in the Sector Concerned'
13.4.1 Introduction
13.4.2 The 1999 WestLB Decision
13.4.3 The CFI Annuls the 1999 WestLB Decision
13.4.3.1 Introduction
13.4.3.2 Does the MEIP Apply to Profitable Undertakings?
13.4.3.3 The Criterion of 'the Average Rate of Return in the Sector Concerned'
13.4.3.4 The Two Perspectives from Which One Assesses the Profitability in WestLB
13.4.3.5 The Infringement of the Obligation to State Reasons
13.5 Conclusions
CHAPTER 14 In Search of the 'Right' Benchmark of the MEIP in a Given Case
14.1 Introduction
14.2 The Public Investor and the Recipient Undertaking
14.3 The Relation between the Grantor and the Recipient
14.4 The Investment and the Situation or the Market in Which It Takes Place
14.5 Conclusions
CHAPTER 15 When Should the Profitability Analysis Be Undertaken and Why?
15.1 Introduction
15.2 The Case Law and the Commission Practice on the Relevant Time of Applying the MEIP
15.3 Ex ante v. Ex post Profitability Assessments under the MEIP: Questions and Doubts
15.4 Questioning the Ex ante Approach?
15.5 Option Agreements under the Private Vendor Test
15.5.1 Introduction
15.5.2 Asker Brygge: The EFTA Court Makes the Best of ESA's Decision
15.5.3 Hammar: The Commission's View on Option Agreements
15.6 Conclusions
CHAPTER 16 The Test of Concomitance under the MEIP
16.1 Introduction
16.2 How to Meet the Test of Concomitance under the MEIP?
16.2.1 The Proper Benchmark
16.2.2 Real Economic Significance of Private Participation
16.2.3 The 'Same' or 'Identical' Conditions
16.2.4 Making the Investment Simultaneously
16.2.5 The Participation of Employees
16.3 Conclusions
PART V The Application of the Different Subtypes of the MEIP
CHAPTER 17 The MEIP and Its Subtypes
17.1 Introduction
17.2 The Private Creditor Test
17.2.1 Introduction
17.2.2 The Application of the Private Creditor Test
17.3 The Private Guarantor Test
17.3.1 Introduction
17.3.2 The Application of the Private Guarantor Test
17.4 The Private Reinsurer Test
17.4.1 Introduction
17.4.2 The Application of the Private Reinsurer Test
17.5 The Private Lender Test
17.5.1 Introduction
17.5.2 The Application of the Private Lender Test
17.6 The Private Borrower Test
17.6.1 Introduction
17.6.2 The Application of the Private Borrower Test
17.7 The Private Vendor Test
17.7.1 Introduction
17.7.2 Sale of Public Property through a Tender Procedure
17.7.3 Sale Following an Independent Expert Evaluation
17.7.4 Relation between a Tender Procedure and an Independent Expert Evaluation
17.7.5 The Absence of a Tender Procedure and an Ex ante Expert Evaluation
17.7.6 The Price of Flexibility and Freedom in Applying the Private Vendor Test
17.7.7 The Proposal of the Market Economy Tenderer Principle
17.8 The Private Purchaser Test
17.8.1 Introduction
17.8.2 The Application of the Private Purchaser Test
17.9 The Private Supplier Test
17.9.1 Introduction
17.9.2 The Application of the Private Supplier Test
17.10 The Private Operator (Player) Test
17.10.1 Introduction
17.10.2 The Application of the Private Market Operator (Player) Test
17.10.3 The Application of the MEIP to Cases of Cross-Subsidisation
17.10.4 The Application of the MEIP to Corporate Tax Arrangements
17.11 Conclusions
PART VI The Judicial Review
CHAPTER 18 The Judicial Review of Cases concerning the MEIP
18.1 Introduction
18.2 Why Does the Extent of the Judicial Review in the MEIP Cases Raise Difficulties?
18.3 A 'Complex Economic Appraisal' or a Review of Information of Economic Nature?
18.4 Wide, But Not Unlimited Commission's Discretion and the Limited Judicial Review
18.5 Conclusions
PART VII Criticism of the MEIP and Conclusions
CHAPTER 19 Criticism of the MEIP
19.1 Introduction
19.2 Does the MEIP Contradict Article 345 TFEU?
19.3 Does the MEIP Deprive the 'One Time, Last Time' Principle of Its Efficiency?
19.4 Is the MEIP an Idealised, Hypothetical Model of a Non-existing Entrepreneur?
19.4.1 Introduction
19.4.2 Is Compliance with the MEIP a Paradox?
19.4.2.1 Lack of the Required Funds
19.4.2.2 State Investments That Are Atypical of the Private Market
19.4.2.3 Other Reasons That May Explain the Absence of a Real Private Investor
19.4.3 Private Investors Are Not Always Rational, Prudent and Profit-Oriented: Why Must the State Behave in This Way?
19.4.4 Does the Commission Replace the Decision Made by a Public Investor?
19.4.5 Conclusions
19.5 Are Public and Private Investors Incomparable?
19.5.1 Introduction
19.5.2 Access to Unlimited Funds
19.5.3 The Exercise of Public Powers
19.5.4 Are Entrepreneurial Skills and Motives of Public Officials Not Comparable to Those of Private Investors?
19.5.5 Absence of 'Normal Market Conditions'
19.5.6 Conclusions
CHAPTER 20 Conclusions
Bibliography
Table of cases
Table of Legislation
EEA law
Miscellaneous
Index
International
Back Cover

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