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Staff Working Document on SOEs

Commission Staff Working Document on state aid-compliant financing, restructuring and privatisation of State-owned enterprises (SOE).


On 10 February 2012 the European Commission issued a Staff Working Document on state aid-compliant financing, restructuring and privatisation of State-owned enterprises (SOE).1 Some of SOEs are currently loss-making/or have accumulated significant amounts of debt as a result of the economic and financial crisis. Member States often decide to intervene and adopt different measures in the form of financing, like capital injections or writing off of debts, for the purposes of restructuring and/or privatisation of SOE. Such state measures can potentially involve state aid. In principle, granting aid is prohibited under EU/EEA State aid rules.

The objectives of the issued Staff Working Document are: 1) to raise awareness in all Member States of EU State aid rules applicable to inter alia privatisation of SOEs; 2) to provide clarifications on the application of the main State aid principles; 3) to clarify the impact that State aid rules could have on the policies and decisions of Member States undergoing economic adjustment programmes.

In general, if the measure in question meets all the cumulative conditions laid down in Article 107(1) TFEU (Article 61(1) EEA), it is subject to notification and standstill obligation. Only aid that is authorized by the Commission (or the EFTA Surveillance Authority), meaning it is considered compatible with the internal market, can be implemented. However, if a measure concerned is taken on conditions that a private investor (owner) would accept in similar circumstances and under normal market conditions, it does not involve aid. This is because it does not confer an economic advantage upon a recipient undertaking. Such measures comply with the so-called Market Economy Vendor Principle (MEVP), one of the subtypes of the well-established Market Economy Investor Principle (MEIP). The Staff Working Document clarifies how these two types of state measures should be seen in the context of restructuring and/or privatisation of SOEs.

However, since the present Document is a guidance paper, it is issued exclusively for information purposes. Thus, it does not represent an official position of the Commission on this issue, nor does it anticipate such a position. Likewise, it is not intended to constitute a statement of the law and is without prejudice to the interpretation of the State aid rules by the Court of Justice or the General Court of the European Union. Save otherwise mentioned, the principles referred to in this Guidance Paper are applicable not only to SOE, totally or partially owned by the State, but more generally to any stake or participation that a public authority may hold in a company, independently of whether the public authority effectively exercises control or not over it.

1Commission Staff Working Document: Guidance Paper on state aid-compliant financing, restructuring and privatisation of State-owned enterprises, swd (2012) 14 final.