Focus on
State Aid

Helping clients to achieve state aid clearance and avoid investigation from the European Commission.

Economics is increasingly being used to inform the regulatory, governmental and judicial decisions which shape the legal boundaries of the free market. Economic and financial analysis is at the heart of modern state aid policy.

Oxera has a long-standing reputation for providing critical economic insight into state aid matters to governments, lawyers, regulators and large corporations. We have market-leading experience in front of the European Commission and courts and enjoy excellent working relationships with the European Commission, including with the Chief Economist’s team.

James Kavanagh

‘We use economics to answer the big questions.’

In this Q&A, Oxera economic experts discuss the success stories and key issues our clients face in state aid

Click here to read the article.

The skills we apply to state aid
State aid covers any form of advantageous government treatment (whether implicit or explicit), ranging from direct subsidies to tax exemptions.

Financial Analysis
Corporate finance skills are essential to state aid analysis, particularly in relation to tests of the market economy operator principle and over-compensation tests for companies providing services of general economic interest (SGEI).

Client projects
  • Expert advice to a top Spanish football club on an appeal of a Commission State aid Decision.
  • Advising EDF in a European Commission investigation into alleged tax advantage in France.
  • Advising airports on a range of State aid matters, including MEOP assessments of loan arrangements and the notification of investment aid.

Competition Economics
Competition economics is used to assess market failures and identify distortions in trade and competition due to state aid. Where aid has a substantial distortive effect, competition economics is used to assess how to mitigate this effect, including the design of effective competition remedies in order to ensure that the goal of ‘good aid’ is still achieved.

Client projects
  • Ex post evaluation of a tax measure for a French authority.
  • Advising EDF in the European Commission investigation into State aid for new nuclear investment at Hinkley Point, leading to clearance by the Commission as compatible with State aid rules.

Regulatory Economics
Regulatory economics is used to assess whether the measure is best designed to deliver its stated objectives. For example, we test whether the European Commission’s requirements for ‘good aid’ are met—i.e. that the aid is well-designed, targeted at identified market failures and least distortive.

Client projects
  • Advised an energy company on the appropriate design of a claw-back mechanism to ensure that the company’s profitability does not exceed a ‘reasonable’ level, and therefore that state funding received by the company can be compatible with state aid rules.
State Aid Sectors