Judgment — ECLI:EU:T:2000:148
Date: 2000-06-13
Language of the case: Portuguese
Court formation: Fifth Chamber, Extended Composition
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: State aids;Competition
Concepts: Statement of reasons;Notification and obligation to suspend payment of the aid;Public undertakings;Interpretation of Community law;Use of State resources;Commission decision following the formal investigation procedure;Damage to competition and effect on trade;General;Aid to undertakings in difficulty;Commission discretion
Procedure: Action for annulment - unfounded;Action for annulment - decision unnecessary
Origin: Portugal

Summary of the Judgment 
1. Acts of the institutions — Statement of reasons — Obligation — Scope — Commis­
sion decision on State aid 
(EC Treaty, Arts 92(1) (now, after amendment, Art. 87(1) EC) and 190 (now Art. 253 
EC)) 
2. Community law — Interpretation — Acts of the institutions — Statement of 
reasons — To be taken into account 
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SUMMARY — JOINED CASES T-204/97 AND T-270/97 
3. State aid — Planned aid — Implemented before the Commission's final decision — 
Commission decision ordering recovery of the aid — Obligation to state reasons — 
Scope 
(EC Treaty, Art. 93(3) (now Art. 88(3) EC)) 
4. State aid — Definition — Assessment according to the criterion of normal market 
conditions 
(EC Treaty, Art. 92 (now, after amendment, Art. 87 EC)) 
5. State aid — Definition — Guarantee granted by the State — Covered — Absence of a 
direct and clear mobilisation of State resources — No effect 
(EC Treaty, Art. 92 (now, after amendment, Art. 87 EC)) 
6. State aid — Commission decision finding unnotified aid to be incompatible with the 
common market — Obligation to state reasons — Scope 
(EC Treaty, Arts 92 (now, after amendment, Art. 87 EC), 93(3) and 190 (now Arts 
88(3) EC and 253 EC)) 
7. State aid — Prohibition — Exemptions — Aid which can be regarded as compatible 
with the common market — Commission's discretion — Review by the Court — 
Limits 
(EC Treaty, Art. 92(3) (now, after amendment, Art. 87(3) EC)) 
8. State aid — Prohibition — Exemptions — Aid which can be regarded as compatible 
with the common market — Aid for rescuing a firm in difficulty — Conditions — 
Loan guarantee bearing a normal market interest rate 
9. Competition — Public undertakings — Equal treatment of public and private 
undertakings — Rules governing public ownership — No effect 
(EC Treaty, Arts 90(1) and 222 (now Arts 86(1) and 295 EC)) 
10. Competition — Public undertakings and undertakings to whom Member States grant 
special or exclusive rights — System of derogation — Conditions 
(EC Treaty, Art. 90(2) (now Art. 86(2) EC)) 
1. The Community institutions' obliga­
tion under Article 190 of the treaty 
(now Article 253 EC) to state the 
reasons on which a decision is based 
is intended to enable the Community 
judicature to exercise its power to 
review the legality of the decision and 
the person concerned to know the 
reasons for the measure adopted so 
that he can defend his rights and 
ascertain whether or not the decision 
is well founded. Furthermore, in stating 
the reasons for the decisions it has to 
take in order to ensure that the rules of 
competition are applied, the Commis­
sion is not obliged to adopt a position 
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EPAC V COMMISSION 
on all the arguments relied on by the 
parties concerned and it is sufficient if 
it sets out the facts and the legal 
considerations having decisive impor­
tance in the context of the decision. 
With regard to the characterisation of a 
measure as aid, that principle requires 
that the reasons which led the Com­
mission to consider that the measure 
concerned falls within the scope of 
Article 92(1) of the Treaty (now, after 
amendment, Article 87(1) EC) should 
be stated. 
(see paras 34-36) 
2. The operative part of an act is indis-
sociably linked to the statement of 
reasons for it, so that, when it has to 
be interpreted, account must be taken 
of the reasons which led to its adop­
tion. 
(see para. 39) 
3. Where, contrary to the provisions of 
Article 93(3) of the Treaty (now Arti­
cle 88(3) EC), the proposed aid has 
already been granted, the Commission, 
which has the power to require the 
national authorities to order its repay­
ment, is not obliged to provide specific 
reasons in order to justify the exercise 
of that power. 
(see para. 53) 
4. The concept of aid embraces not only 
positive benefits, such as subsidies 
themselves, but also interventions 
which, in various forms, mitigate the 
charges which are normally included in 
the budget of an undertaking and 
which, without therefore being subsi-
dies in the strict meaning of the word, 
are similar in character and have the 
same effect. In determining whether a 
State measure constitutes aid, it is 
necessary to establish whether the 
recipient undertaking receives an eco­
nomic advantage which it would not 
have obtained under normal market 
conditions. 
(see paras 65-66) 
5. The grant of a guarantee by the State to 
an undertaking cannot avoid the pro­
hibition in Article 92 of the Treaty 
merely because that advantage was 
not conferred on the beneficiary under-
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SUMMARY —JOINED CASES T-204/97 AND T-270/97 
taking by way of a direct and clear 
mobilisation of State resources. 
(see para. 81) 
6. The Commission is not required to 
carry out an extremely detailed eco­
nomic analysis supported by statistics 
of the effect of the State aid on intra-
community trade and competition. 
Moreover, in the case of aid which 
has not been notified to the Commis­
sion, the decision finding that such aid 
is incompatible with the common mar­
ket does not have to be based on a 
demonstration of the real effect of that 
aid on competition or on trade between 
Member States. To decide otherwise 
would ultimately be to favour those 
Member States which grant aid in 
breach of the duty to notify laid down 
in Article 93(3) of the Treaty (now 
Article 88(3) EC), to the detriment of 
those which do notify aid at the 
planning stage. 
(see para. 85) 
7. Under Article 92(3) of the Treaty (now, 
after amendment, Article 87(3) EC), 
the Commission enjoys a wide discre­
tion, the exercise of which involves 
assessments of an economic and social 
nature which must be made within a 
Community context. The Court must 
therefore limit its review of such an 
assessment to ascertaining that the 
rules of procedure have been complied 
with, that the reasoning is sufficient, 
the facts are correct, and that there is 
no manifest error of assessment or 
misuse of power. 
(see para. 97) 
8. With regard to the first condition, 
concerning the interest rate defined by 
the Community guidelines on State aid 
for rescuing and restructuring firms in 
difficulty, the objective pursued by the 
Commission in authorising such rescue 
aid is to contribute to economic devel­
opment without affecting trade to an 
extent contrary to the Community 
interest. From that point of view, 
charging interest at a rate more favour­
able than that available on the market 
is no more acceptable in the case of a 
loan obtained by virtue of a State 
guarantee than it is where aid consists 
of the loan itself. 
(see para. 107) 
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EPAC V COMMISSION 
9. Article 222 of the Treaty (now Arti­
cle 295 EC) does not contravene the 
principle that, under Article 90(1) of 
the Treaty, the competition rules apply 
without distinction to private and pub­
lic undertakings. 
(see para. 122) 
10. It is clear from Article 90(2) of the 
Treaty (now Article 86(2) EC) that, for 
the derogation provided for in that 
provision to apply, the undertaking in 
question must have been entrusted by 
the public authorities with the opera­
tion of a service of general economic 
interest, the application of the rules of 
the Treaty must obstruct the perfor­
mance of the particular tasks assigned 
to the undertaking and, finally, the 
interests of the Community must not be 
affected. In that connection, undertak­
ings entrusted with the operation of 
services of general economic interest 
must have been assigned that task by 
an act of a public authority. 
(see paras 125-126) 
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