The EU Commission finds that a French electricity company received incompatible State aid (EDF)
*Article published on StateAidHub: http://stateaidhub.eu, republished in e-Competitions with the courtesy of the author. The original title of this article appears below the e-Competitions title. Authors are welcome to write an alternative article on this case/text, provided they have no relationships with a party or related third party. Article will need e-Competitions Board approval before publication.
How to Apply the Market Economy Investor Principle and what Mistakes to Avoid: The Long-running Case of EDF*
A market investor carries out a thorough ex ante analysis of the prospects of an investment before it commits any money.
Introduction
In 2004, the EU Commission concluded, in decision 2005/145, that France granted incompatible aid to Electricite de France [EDF]. The French government had converted tax liability into share capital in EDF. The Commission was of the opinion that, by not collecting tax due to it and by using instead the amount of tax to increase the capital of EDF, France was not acting as a private investor. The fresh capital was classified as operating aid and consequently found to be incompatible with the internal market.
EDF appealed against the Commission
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