The EU Market Economy Investor Principle: A Good Paradigm?

30 Pages Posted: 22 Sep 2014

See all articles by Md. Rezaul Karim

Md. Rezaul Karim

University of Birmingham - Birmingham Law School, Students

Date Written: April 28, 2014

Abstract

The Market Economy Investor Principle (MEIP) is one of the most fundamental precepts of European state aid law. It is a useful tool at the disposal of the European Commission to assess whether in any given situation state aid might exist. Member states also use it to ensure compliance in funding commercial firms, whether public or private. With continuous clarifications and refinement by numerous Commission text, decisions and the European Court's judgments, it captures the center-spot of state aid assessment practices. But the doctrine has also been severely criticized for its inherent theoretical incoherence as well as complex practical application which sometimes resulted in inconsistent and unpredictable decisions. While government actions are always influenced by public policy objectives and other political factors, is it really practical or effective to compare those with that of private investors on pure commercial criteria? How far is it acceptable to hypothesize the existence of a model 'private investor‘ that may never exist? Lack of a proper market benchmark sometimes results in providing wider discretion in the hands of the Commission. Is it good for a legal principle to empower an executive body to use it as a political tool? The MEIP would certainly be a better paradigm when it could provide solution to many of such questions. Given the legal uncertainty, inconsistency and unpredictability related with the test, considerable care need to be exercised to ensure that 'not every characteristics of the state is imputed to the private investor, otherwise the MEIP is liable to act as a distorting mirror that flatters the image of the States as an investor.'

Keywords: Market Economy Investor Principle, Market Investor Principle, Public Investor Principle, European Commission, European Court of Justice, MEIP, Market Economy Lender/Creditor/Vendor Principle, WTO

Suggested Citation

Karim, Md. Rezaul, The EU Market Economy Investor Principle: A Good Paradigm? (April 28, 2014). Available at SSRN: https://ssrn.com/abstract=2498873 or http://dx.doi.org/10.2139/ssrn.2498873

Md. Rezaul Karim (Contact Author)

University of Birmingham - Birmingham Law School, Students ( email )

Edgbaston
Birmingham
United Kingdom

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