The Market Economy Investor Principle - More emphasis on economic effects required
The IBC Conference held at the Marriot Hotel in Brussels on Thursday 3rd of November addressed State Aid Reform.
Phil Burns, a Director of Frontier (London) discussed the practical application of the Market Economy Investor Principle (MEIP). This approach helps the European Commission explore whether the terms of financing granted by governments to companies are in line with the principles which a private investor would have applied. If such principles are not met financing could be considered as State Aid. Phil Burns discussed the economic rationale for the MEIP, the application of the MEIP and the conceptual challenges inherent in applying the MEIP. The paper emphasised that policy should evolve by placing a greater emphasis on assessing the economic effect of state interventions and drew on practical cases where Frontier has supported industry clients.
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