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            COMMISSION DECISION         

of 12 May 2004         

on the State aid implemented by Spain for further restructuring aid to the public Spanish shipyards

State aid Case C 40/00 (ex NN 61/00)

(notified under document number C(2004) 1620)

(Only the Spanish text is authentic)

(Text with EEA relevance)

(2005/173/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community, and in particular the first subparagraph of Article 88(2) thereof,

Having regard to the Agreement on the European Economic Area, and in particular Article 62(1)(a) thereof,

Having regard to Council Regulation (EC) No 1540/98 of 29 June 1998 establishing new rules on aid to shipbuilding (1),

Having regard to Council Regulation (EC) No 1013/97 of 2 June 1997 on aid to certain shipyards under restructuring (2),

Having called on interested parties to submit their comments pursuant to the provisions cited above (3) and having regard to their comments,

Whereas:

I.   PROCEDURE

II.   DETAILED DESCRIPTION OF THE AID

The beneficiaries

Transactions covered by this procedure

The decision to open the formal investigation procedure

The first decision to extend the formal investigation procedure

The second decision to extend the formal investigation procedure

III.   COMMENTS FROM INTERESTED PARTIES

Comments to the opening of the procedure

Comments to the first extension

Comments to the second extension

IV.   COMMENTS FROM SPAIN

Comments following the opening

Comments following the first extension

Comments following the second extension

V.   ASSESSMENT

Legal base

Assessment of aid in the different transfers

1.   The role of SEPI

2.   Aid contained in transactions linked to transfer 1, between AESA and SEPI

(a)   The purchase price

(b)   Loans provided by SEPI to three shipyards in December 1999

3.   Aid contained in transactions linked to transfer 2, between AESA and IZAR

(a)   The capital injection

(b)   The purchase price

4.   Aid contained in transactions linked to transfer 3, between SEPI and Bazán

Recovery of restructuring aid already granted and approved in 1997

Aid recovery following change of ownership

Article 296

VI.   CONCLUSION

The Commission concludes that Spain has unlawfully implemented aid to the sum of EUR 500 473 000 in breach of Article 88(3) of the Treaty. This has been provided in the form of:

The aid is not compatible with the common market, since it cannot be authorised as restructuring aid or any other type of aid.

The aid should be recovered in their totality from the current owners of these shipyards, IZAR, which took over the companies from AESA respectively SEPI.

The loans under point 2 above, amounting to EUR 192 100 000, have in September 2000 been repaid, with interest, by IZAR to SEPI. It can therefore be considered that that amount of the illegal and incompatible aid has been recovered,

HAS ADOPTED THIS DECISION:

Article 1

The State aid which Spain has implemented for the public Spanish shipyards, currently owned by IZAR, amounting to EUR 500 473 000 is incompatible with the common market.

Article 2

1.   Spain shall take all necessary measures to recover from the public Spanish shipyards the aid referred to in Article 1, and unlawfully made available to the beneficiaries, except the EUR 192 100 000 already recovered.

2.   Recovery shall be effected without delay and in accordance with the procedures of national law provided that they allow the immediate and effective execution of the decision. The sums to be recovered shall bear interest throughout the period running from the date on which they were first put at the disposal of the beneficiaries until their actual recovery. The interest rate to be applied will be the reference rate used for calculating the grant equivalent of regional aid.

3.   The interest rate referred to in paragraph 2 will be applied on a compound basis throughout the entire period referred to in paragraph 2.

Article 3

Spain shall inform the Commission, within two months of notification of this Decision, of the measures planned and already taken to comply with it. It will provide this information using the questionnaire attached in Annex of this Decision.

Article 4

This Decision is addressed to the Kingdom of Spain.

Done at Brussels, 12 May 2004.

For the Commission

Mario MONTI            

Member of the Commission

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(1)OJ L 202, 18.7.1998, p. 1.

(2)OJ L 148, 6.6.1997, p. 1.

(3)OJ C 328, 18.11.2000, p. 16 and OJ C 21, 24.1.2002, p. 17 and OJ C 199, 23.8.2003, p. 9.

(4)OJ C 354, 21.11.1997, p. 2.

(5)OJ L 83, 27.3.1999, p. 1.

(6)OJ C 21, 24.1.2004, p. 41, Case T-381/03.

(7)  The monetary amounts in this decision are, in general, rounded figures, in euro, recalculated from Spanish pesetas.

(8)OJ C 201, 26.8.2003, p. 3.

(9)  [1980] ECR 1205.

(10)  [1994] ECR I-877.

(11)  [1998] ECR I-7907.

(12)OJ L 385, 31.12.1994, p. 1.

(*1)  Confidential information.

(13)  [1991] ECR I-1433.

(14)OJ C 119, 22.5.2002, p. 22.

(15)OJ L 37, 12.2.2000, p. 22.

(16)OJ L 193, 29.7.2000, p. 75.

(17)OJ L 195, 29.7.1980, p. 35.

(18)  [2000] ECR I-3271, paragraph 50.

(19)  [2002] ECR I-4397, paragraphs 55-56.

(20)OJ L 37, 12.2.2000, p. 22.

(21)OJ L 296, 30.10.2002, p. 73.

(22)OJ C 307, 13.11.1993, p. 3.

(23)  [1986] ECR 2321.

(24)OJ L 37, 12.2.2000, p. 22.

(25)  [2002] ECR I-3243.

(26)  Case C-342/96 Spain v Commission [1999] ECR I-2459, paragraphs 41 and 42, and Case C-256/97 DMT [1999] ECR I-3933, paragraphs 22 to 24 and the opinion of AG Jacobs in that case, paragraphs 334 to 336.

(27)  It also owned a number of smaller companies, but their total nominal capital was only ESP 161 million (EUR 1,0 million) compared to ESP 9,5 billion (EUR 57,1 million) for the three shipyard companies (Puerto Real ESP 4 billion, Sestao ESP 4 billion and Sevilla ESP 1,5 billion).

(28)  See points 21 and 22 of the judgment: ‘It must therefore be accepted that a parent company may also, for a limited period, bear the losses of one of its subsidiaries in order to enable the latter to close down its operations under the best possible conditions. Such decisions may be motivated not solely by the likelihood of an indirect material profit but also by other considerations, such as a desire to protect the group’s image or to redirect its activities.

However, when injections of capital by a public investor disregard any prospect of profitability, even in the long term, such provision of capital must be regarded as aid within the meaning of Article 92 of the Treaty, and its compatibility with the common market must be assessed on the basis solely of the criteria laid down in that provision.’         

(29)  However, this information will be used in the other procedure open against IZAR, in order to determine whether some of the capital injections provided to IZAR in year 2000 were used for civil purposes.

(30)OJ C 354, 21.11.1997, p. 2. Cf. the penultimate paragraph on page 7.

(31)  COM(1999) 480 final.

(32)  Case C-390/98, H.J. Banks [2001] ECR I-6117, paragraph 77 and C– 277/00 Germany v Commission [2004] not yet published in the ECR, paragraph 80.

(33)  [2003] ECR I-4035.

(34)OJ L 14, 21.1.2003, p. 56.

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ANNEX

Information regarding the implementation of Commission Decision 2005/173/EC

1.   Calculation of the amount to be recovered

2.   Measures planned and already taken to recover the aid

3.   Recovery already effected

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(1)  Date(s) on which (individual instalments of) the aid has been put at the disposal of the beneficiary.

(2)  Amount of aid put at the disposal of the beneficiary (in gross aid equivalents).

(3)  Date(s) on which the aid has been repaid.

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