LEGAL PRACTICE : STATE AID - LEGAL STANDARD - EUROPEAN CONTROL - COMMISSION - MEMBER STATES - PRIVATE INVESTOR - MARKET ECONOMY

State aid: The private investor in market economy principle

The strengthening of the European control on member States economic behaviors with regard to State aid has led the Commission to build and implement a legal notion: the "private investor in market economy". The judges of the Union have deemed this investor to be “reasonable", "aware" or "rational" and distinguished between the right to an authorized State capitalism and the payment of prohibited State aid. They also clarified the scope of this notion, which now applies to all public behaviors. This legal standard leads public authorities to adopt the reasoning of market economic operators - but only if it is predictable - in order to ensure lawfulness of their actions under the competition rules of the Treaty.

*This article is an automatic translation of the original article, provided here for your convenience. Read the original article. State capitalism', an expression used by the European Commission as early as its second report on competition policy in 1972, enshrines a fundamental principle of the Treaty contained in Article 222 of the Rome text (now Article 345 TFEU): the right for Member States to intervene in economic life through nationalisation, privatisation, the creation of public undertakings or the acquisition of holdings, without the liberal rules of the Treaty being opposed to this. This principle of the neutrality of the Treaty with regard to the system of property ownership in force in the Member States does not, however, in the Commission's own words: "...leave the Member

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Michaël Karpenschif, State aid: The private investor in market economy principle, September 2011, Concurrences N° 3-2011, Art. N° 37425, www.concurrences.com

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