State aid tools
Our experience in the field of State aid encompasses:
- Market Economy Investor Principle (MEIP) test
In numerous State aid cases, we have applied the MEIP test to show if a State's investment in an enterprise meets the terms and conditions which would be acceptable to a private investor operating under normal market economy conditions, which is one of the determinants of if the intervention can be characterised as State aid or not.
- Market definition
Market definition techniques used in other areas of competition policy need to be adapted to fit State aid cases.
- Effects-based assessment
Often an effects-based assessment of an EC State aid case is required. The evaluation of the incentive effect requires, for instance, an assessment of the counterfactual without State aid; evaluating the potential distortions of competition and the effects an aid measure would have on trade requires the application of economic theories and its empirical testing. Based on our deep knowledge of EC State aid rules and state-of-the-art economic practices we can offer unique advice to aid beneficiaries, governments or affected parties.
- Conceptual policy advice
E.CA staff provide high-level conceptual policy advice and shape State aid policy discussion through comments in public consultation periods, participation in conferences and numerous publications.
- Business plan evaluation
Our economists are experienced in applying discounted cash flow (DCF) models, capital asset pricing models (CAPM) and other tools of modern finance.