Judgment — ECLI:EU:T:1998:78
Date: 1998-04-30
Language of the case: English
Court formation: Fifth Chamber, Extended Composition
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: State aids;Competition;Transport
Concepts: Statement of reasons;Pleas in law;Private investor/private creditor test;Commission decision following the formal investigation procedure
Procedure: Action for annulment - unfounded
Origin: United Kingdom

SUMMARY — CASE T-16/96 
3. State aid — Commission decision finding unnotified aid to be incompatible with the common 
market — Obligation to state reasons — Scope 
(EC Treaty, Arts 92, 93(3) and 190) 
1. In the field of State aid no provision 
makes the right of a person directly and 
individually concerned to challenge a 
measure addressed to a third party condi­
tional upon all the complaints set out in 
the application having been raised during 
the administrative procedure. In the 
absence of such a provision, the right of 
such a person to bring proceedings can­
not be restricted on the basis only of the 
fact that, although he could, during the 
administrative procedure, have submitted 
observations on an assessment disclosed 
when the Article 93(2) procedure was 
opened and then repeated in the con­
tested decision, he failed to do so. 
2. In order to determine whether financial 
assistance granted by a Member State to 
an undertaking has the character of State 
aid, the relevant criterion is whether the 
undertaking receiving the aid could have 
obtained the amounts in question on the 
capital market. In particular, the relevant 
question is whether a private investor 
would have entered into the transaction 
in question on the same terms and, if not, 
on which terms he could have entered 
into the transaction. 
In the case of a loan granted at a prefer­
ential rate, the Commission may rightly 
classify as aid incompatible with the com­
mon market the difference between the 
interest which would have been paid at 
the market rate and the interest actually 
paid, and not the sum lent. 
The private investor test also enables the 
Commission to determine the measures 
to be taken under Article 93(2) of the 
Treaty in order to remove any distortions 
of competition which are found and to 
restore the situation prevailing prior to 
payment of the unlawful aid, having due 
regard to the principle of proportionality. 
If a fundamental distinction cannot be 
established depending on whether aid is 
granted in the form of a loan or in the 
form of a capital injection, the uniform 
application of the private investor test in 
both cases may nevertheless, having due 
regard to the principle of proportionality, 
require different measures to be adopted 
in order to eliminate distortions of com­
petition found and to restore the situation 
prevailing prior to the payment of the 
unlawful aid. 
The principle of proportionality requires 
the adoption of the measures necessary to 
ensure healthy competition on the 
internal market which least harm the 
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CITYFLYER EXPRESS ν COMMISSION 
promotion of a harmonious and balan­
ced development of economic activities 
throughout the Community. 
Since a sum provided in the form of a 
contribution to share capital is transferred 
on a permanent basis whereas a sum pro­
vided by way of loan, being repayable, is 
made available only temporarily, the rule 
of proportionality requires, as a matter of 
principle, the adoption of different mea­
sures in the two cases. Where an equity 
injection is involved, the Commission can 
take the view that abolition of the advan­
tage granted must require the repayment 
of the capital contributed. As regards a 
loan, on the other hand, if the competi­
tive advantage resides in the grant of a 
preferential interest rate and not in the 
actual value of the funds made available, 
the Commission, instead of requiring the 
principal sum simply to be repaid, is jus­
tified in requiring the interest rate which 
would have been charged under normal 
market conditions to be applied and the 
difference between the interest which 
would have been paid under those condi­
tions and the interest which was actually 
paid on the basis of the preferential rate 
to be repaid. 
J. The statement of reasons required by 
Article 190 of the Treaty must explain 
clearly and unambiguously the reasoning 
of the Community authority which drew 
up the contested decision so as to enable 
the persons concerned to ascertain the 
matters justifying the measure adopted so 
that they can defend their rights and the 
Community judicature can carry out its 
review. However, it is not necessary for 
the reasoning to go into all the relevant 
facts and points of law, since the question 
whether the statement of reasons meets 
the requirements of Article 190 of the 
Treaty 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. 
In stating the reasons for the decisions 
which it has to take in order to ensure 
that the rules of competition are applied, 
the Commission is not obliged to take a 
position on all the arguments relied on by 
the parties concerned. It is sufficient if it 
sets out the facts and legal considerations 
having decisive importance in the context 
of the decision. 
When applied to decisions finding that 
measures constitute State aid, this prin­
ciple requires that the reasons for which 
the Commission considers that the aid 
measure in question falls within the scope 
of Article 92(1) of the Treaty should be 
indicated. 
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