Judgment — ECLI:EU:C:2002:508
Date: 2002-09-19
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: State aids;Competition
Concepts: Statement of reasons;Formal investigation procedure;General;Commission decision following the formal investigation procedure;Regional aid;Damage to competition and effect on trade;Definition;Rules on aid in connection with the common organization of the agricultural markets;Rules on competition
Procedure: Action for annulment - unfounded
Origin: Spain

Summary of the Judgment 
1. State aid — Effect on trade between Member States — Adverse effect on compe­
tition — Aid relatively small in amount 
(Art. 87 EC) 
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SUMMARY — CASE C-114/00 
2. State aid — Investigation by the Commission — No observations from interested 
parties — No effect on the validity of the Commission's decision 
(Art. 88(2) EC) 
3. Acts of the institutions — Statement of reasons — Obligation — Scope 
(Art. 253 EC) 
4. State aid — Commission decision finding aid which has not been notified incom­
patible with the common market — Obligation to state reasons — Scope 
(Arts 88(3) EC and 253 EC) 
5. State aid — Prohibition — Derogations — Aid which may be considered to be 
compatible with the common market — Aid for regional development — Distinction 
between Article 87(3)(a) and (c) — Commission's discretion — Reference to the 
Community context 
(Art. 87(3) (a) and (c) EC) 
6. State aid — Prohibition — Derogations — Aid which can benefit from the exemp­
tions referred to in Article 87(2) and (3) EC — Operating aid — Excluded — 
Commission's discretion 
(Art. 87(2) and (3) EC) 
7. Agriculture — Common organisation of the markets — State aid for products 
covered by a common organisation of the markets — Contrary to Community 
rules — Not permissible 
(Art. 34 EC) 
8. Free movement of goods — Quantitative restrictions — Measures having equivalent 
effect — Definition — State aid that promotes the acquisition of local produce for 
processing 
(Art. 28 EC) 
9. State aid — Commission decision requiring that illegal aid be repaid — Legality to be 
assessed in the light of the information available when the decision was adopted 
(Art. 88(2) EC) 
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SPAIN v COMMISSION 
1. The relatively small amount of aid, or 
the relatively small size of the under­
taking which receives it, does not as 
such exclude the possibility that intra-
Community trade may be affected. 
Other factors may be decisive when 
assessing the effect of aid on trade, 
such as whether the aid is cumulative 
and whether the undertakings that 
receive it are operating in a sector that 
is particularly exposed to competition. 
(see para. 46 
2. The fact that no third parties comment 
on aid held incompatible with the 
common market is not such as to affect 
the validity of a decision of the Com­
mission. 
Whilst Article 88(2) EC requires the 
Commission to seek comments from 
interested parties before it reaches a 
decision, it does not prevent the Com­
mission from determining aid to be 
incompatible with the common market 
in the absence of any such comments. 
That circumstance alone does not pre­
clude the possibility that trade between 
Member States might be affected by the 
aid. 
(see paras 54-55) 
3. The obligation to provide a statement 
of reasons laid down in Article 253 EC 
is an essential procedural requirement, 
as distinct from the question whether 
the reasons given are correct, which 
goes to the substantive legality of the 
contested measure. Accordingly, the 
statement of reasons required by 
Article 253 EC must be appropriate 
to the act at issue and must disclose in a 
clear and unequivocal fashion the rea­
soning followed by the institution 
which adopted the measure in question 
in such a way as to enable the persons 
concerned to ascertain the reasons for 
the measure and to enable the compet­
ent court to exercise its power of 
review. 
Furthermore, that requirement must be 
appraised by reference to the circum­
stances of each case, in particular the 
content of the measure in question, the 
nature of the reasons given and the 
interest which the addressees of the 
measure, or other parties to whom it is 
of direct and individual concern, may 
have in obtaining explanations. It is not 
necessary for the reasoning to go into 
all the relevant facts and points of law, 
since the question whether the state-
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SUMMARY — CASE C-114/00 
ment of reasons meets the requirements 
of Article 253 EC must be assessed 
with regard not only to its wording but 
also to its context and to all the legal 
rules governing the matter in question. 
(see paras 62-63) 
4. Where aid is granted by a Member 
State without having been notified to 
the Commission at the planning stage, 
the statement of reasons for a decision 
declaring that aid incompatible with 
the common market need not demon­
strate the real effect of the aid granted 
on competition or trade between 
Member States. If it did have to do 
so, that requirement would ultimately 
favour Member States which grant aid 
in breach of the duty to notify, laid 
down in Article 88(3) EC, to the detri­
ment of those which do notify aid at 
the planning stage. 
(see para. 68) 
5. A programme of regional aid may fall 
within one of the exemptions in 
Article 87(3)(a) and (c) EC in certain 
circumstances. 
The use of the words 'abnormally' and 
'serious' in Article 87(3)(a) shows that 
the exemption concerns only areas 
where the economic situation is 
extremely unfavourable in relation to 
the Community as a whole. The 
exemption in Article 87(3)(c), on the 
other hand, is wider in scope inasmuch 
as it permits the development of certain 
areas in a Member State which are 
disadvantaged in relation to the 
national average without being 
restricted by the economic conditions 
laid down in Article 87(3)(a), provided 
such aid 'does not adversely affect 
trading conditions to an extent 
contrary to the common interest'. 
Conversely, the fact that that condition 
is not mentioned in the exemption 
under Article 87(3)(a) implies greater 
latitude in granting aid to undertakings 
in regions which do not meet the 
criteria laid down in that exemption. 
Nevertheless, the difference in wording 
between Article 87(3)(a) EC and 
Article 87(3)(c) EC cannot lead to the 
conclusion that the Commission should 
take no account of the Community 
interest when applying Article 87(3)(a), 
and that it must confine itself to 
verifying the specifically regional 
impact of the measures involved, with­
out assessing their impact on the rel­
evant market or markets in the Com­
munity as a whole. In such cases the 
Commission is bound not only to verify 
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SPAIN v COMMISSION 
that the measures are such as to con­
tribute effectively to the economic 
development of the regions concerned, 
but also to evaluate the impact of the 
aid on trade between Member States, 
and in particular to assess the sectorial 
repercussions they may have at Com­
munity level. Article 87(3) EC gives the 
Commission a discretion the exercise of 
which involves economic and social 
assessments which must be made in a 
Community context. 
(see paras 78-81) 
6. Aid granted according to the quantities 
of agricultural products bought from 
growers from a region of a Member 
State by processing undertakings in the 
region for local processing which 
reduces the production costs of both 
growers and processors in the region 
and thus enables them to avoid 
expenses which they would normally 
have had to incur as part of their 
day-to-day running costs must be 
regarded as operating aid to the under­
takings concerned in the agricultural 
sector. 
Where the national authorities provide 
no evidence that the aid in question 
was by its nature likely to make an 
effective and lasting contribution to the 
economic development of that region, 
the Commission does not exceed the 
limits of its discretion in finding, on 
that basis, that the aid in question 
cannot benefit from any of the exemp­
tions referred to in Article 87(2) and 
(3) EC and is therefore incompatible 
with the common market. 
(see paras 82-84) 
7. Once the Community has, pursuant to 
Article 34 EC, legislated for the estab­
lishment of a common organisation of 
the market in a given sector, Member 
States are under an obligation to 
refrain from taking any measure which 
might undermine or create exceptions 
to it. 
If those regulations establish an inte­
grated regulatory framework that 
already contains measures of financial 
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SUMMARY — CASE C-114/00 
support for the sectors concerned, a 
Member State may not unilaterally 
award aid to those sectors, even if the 
aid is intended to facilitate the pur­
chase of certain specific products for 
industrial processing and even though 
the quantity is subject to a ceiling. It is 
for the Community to seek solutions to 
the problems which might arise in the 
context of the common agricultural 
policy once, as in this case, it has 
established common organisations of 
the market in a number of sectors. 
(see paras 89-90) 
8. Where an aid scheme establishes a 
financial incentive for processors estab­
lished in a particular region of a 
Member State to buy raw materials 
from local producers, it must be 
regarded as a measure having equival­
ent effect to a quantitative restriction 
on imports, which is prohibited by the 
Treaty. 
(see para. 103) 
9. The legality of a decision adopted by 
the Commission in the area of State aid 
is to be assessed in the light of the 
information available to the Commis­
sion when the decision was adopted. 
Where there is no indication in the 
case-file that, when it adopted the 
decision requiring that the aid be 
repaid, the Commission was in pos­
session of information suggesting that 
no aid had been paid, it cannot be 
claimed that it committed a manifest 
error of assessment in requiring such 
repayment, since it was not impossible 
that aid might have been granted after 
that date under the abovementioned 
national provisions. 
(see paras 108-111) 
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