Bringing sound economics to state aid policy is a major priority for the European Commission, as evidenced by the State Aid Action Plan.

As the Commission has explained:

‘A refined economic analysis can help in identifying real market failures and then in assessing the actual effects of a measure, both in terms of its positive impact, but also as concerns its negative effects on competition and trade’

(Neelie Kroes, GCLC/College of Europe Conference, Brussels, September 21st 2006)

It is difficult to find an adviser with a greater depth and breadth of knowledge than Oxera. For example, we have recently been working with the European Commission on counterfactual scenarios to state aid, thereby helping to improve decision-making in state aid cases. We have also been working with financial institutions that are subject to the bank restructuring processes, and with non-banking clients that are subject to the generic state aid rules. Our experience gives us unique insight into decision criteria and analysis of state aid cases.

Our role
As economics becomes more central to state aid cases, we are experiencing an increase in demand from around Europe for our expertise. Our involvement ranges from financial analysis to determine the effectiveness of a restructuring plan, to competition analysis on distortions caused by aid, and regulatory analysis assessing the scope of the market failure addressed by the aid. In particular, we are actively engaged in cases involving:

–   aid for the rescue and restructuring of firms in difficulty
–   services of general economic interest (SGEI)
–   the market economy investor principle (MEIP) test
–   risk capital measures
–   aid for research, development and innovation
–   aid for climate change and other environmental protection

We have been involved recently with the European Commission in developing an understanding of the drivers and outcomes of financial difficulty across large firms in Europe. In addition, we have worked recently for corporate clients on state aid issues in the financial, energy, aviation, media, defence, and communications sectors. Our case list includes several recent proceedings before the European Commission and the General Court (formerly the Court of First Instance), and this has promoted a close working relationship with a number of leading state aid lawyers.