The European Commission (EC) recently approved state-owned company Alitalia’s recapitalisation plan, deeming that there was no state aid involved because the state acted like a private investor. This decision adds new fuel to a debate about how to apply the principle of the ‘market economy private investor’ to public shareholders.
On the basis of the market-economy private investor criterion, the EC assesses whether the state, when assisting public undertakings or private undertakings partially owned by it, does so on more favourable terms than a private investor would, operating under normal market conditions. If so, the state’s action involves state aid within the meaning of Article 87(1). This approach was repeatedly confirmed by the Court of First Instance.
