Abstract
This article describes a recent State aid case that advances the boundaries in the analysis of the Market Economy Investor Principle beyond the level of complexity reached in previous cases. In 2017 the European Commission approved the aid to Paks II nuclear power station in Hungary following an in-depth investigation. We highlight the most original pieces of economic analysis and financial modelling that contributed to the decision. Among others, the Commission used multiple benchmarking methodologies to estimate the profitability of the investment and the parameters of the financial model. Furthermore, a complex probabilistic model ensured robustness of the results. Finally, we explain the reasoning provided by the Commission when rebutting some of the assumptions put forward by Hungary. Keywords: State aid; MEIP; Nuclear power; Hungary.
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