Judgment — ECLI:EU:C:2002:408
Date: 2002-07-02
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: State aids;Competition
Concepts: General;Defences;Obligations of the Member States;Implementation of the Commission decision and recovery
Procedure: Action for failure to fulfil obligations - successful;Action for failure to fulfil obligations - unfounded
Origin: Spain

Summary of the Judgment 
1. Actions for failure to fulfil obligations — Failure to comply with a Commission 
decision concerning State aid — Decision requiring the recovery of illegal aid — 
Oefences — Absolutely impossible to implement — Criteria of assessment — Finan­
cial position of debtor 
(Art. 88(2) EC) 
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SUMMARY — CASE C-499/99 
2. State aid — Commission decision declaring aid to be incompatible with the common 
market — Difficulties in implementation — Obligation on the Commission and the 
Member State to cooperate in seeking a solution consistent with the Treaty 
(Arts 10 EC and 88(2) EC) 
3. Actions for failure to fulfil obligations — Failure to comply with a Commission 
decision concerning State aid — Decision requiring the recovery of illegal aid — 
Assessment of failure to fulfil obligations — Situation to be taken into consider­
ation — Situation at the end of the period laid down in the reasoned opinion 
(Art. 88(2) EC) 
1. Where a Commission decision requi­
ring the cessation of State aid incom­
patible with the common market has 
not been the subject of a direct action, 
the only defence available to a Member 
State in opposing an infringement 
action by the Commission under 
Article 88(2) EC is to plead that it 
was absolutely impossible for it to 
implement the decision properly. 
However, the condition that it be 
absolutely impossible to implement a 
decision is not fulfilled where the 
government of the Member State 
merely informs the Commission of the 
legal, political or practical difficulties 
involved in implementing the decision, 
without taking any real step to recover 
the aid from the undertakings con­
cerned, and without proposing to the 
Commission any alternative arrange­
ments for implementing the decision 
which could have enabled the dif­
ficulties to be overcome. 
Similarly, the fact that, on account of 
the financial position of the beneficiary 
of the aid in question, the authorities of 
the Member State concerned could not 
recover the sum paid does not con­
stitute proof that implementation was 
impossible, since the Commission's 
objective was to abolish the aid. The 
absence of recoverable assets can only 
be shown in proceedings to wind up the 
company. 
(see paras 21, 25, 37-38) 
2. A Member State, which during the 
implementation of a Community 
decision on State aid, encounters unfor-
seen and unforeseeable difficulties or 
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COMMISSION v SPAIN 
becomes aware of consequences 
unforeseen by the Commission must 
submit those problems to the Commis­
sion for its assessment, proposing 
appropriate amendments to the 
decision in question. In such a case, 
under the rule imposing on Member 
States and Community institutions 
reciprocal duties of genuine cooper­
ation which underlies in particular 
Article 10 EC, the Commission and 
the Member State must work together 
in good faith with a view to overcom­
ing the difficulties whilst fully observ­
ing the provisions of the Treaty and in 
particular those on aid. 
(see para. 24) 
3. In the context of an action under 
Article 88(2) EC seeking a declaration 
that a Member State has failed to fulfil 
its obligations by failing to adopt the 
measures necessary to comply with a 
Commission decision on State aid, the 
infringement must be assessed at the 
expiry of the time-limit fixed in 
the Commission's decision by which 
the Member State must notify the 
Commission of the measures it pro­
poses to take to recover the aid 
declared incompatible with the com­
mon market. 
(see para. 28) 
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