Opinion of the Advocate General — ECLI:EU:C:1998:572
Date: 1998-11-26
Language of the case: French
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: State aids;Competition
Procedure: Action for annulment - unfounded
Origin: France

Summary of the Judgment 
State aid — Concept — Cases where social charges are partially reduced, entailing 
exemptions from the financial charges arising from normal application of the general 
social security system — Covered — State measures intended to offset costs for 
undertakings arising as a result of collective agreements 
(EC Treaty, Art. 92(1) (now, after amendment, Art. 87(1) EC)) 
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SUMMARY — CASE C-2S1/97 
The concept of aid encompasses advantages 
granted by public authorities which, in 
various forms, mitigate the charges nor­
mally included in the budget of an under­
taking. A partial reduction of social charges 
devolving upon undertakings of a particu­
lar industrial sector constitutes aid within 
the meaning of Article 92(1) of the Treaty 
(now, after amendment, Article 87(1) EC) 
if that measure is intended partially to 
exempt those undertakings from the finan­
cial charges arising from the normal appli­
cation of the general social security system, 
without there being any justification for 
this exemption on the basis of the nature or 
general scheme of this system. The social 
character of State assistance is not suffi­
cient to exclude it outright from being 
categorised as aid for the purposes of 
Article 92. 
Thus, State measures the object of which is 
the degressive reduction of employers' 
social security contributions for underta­
kings in a number of particular industrial 
sectors must be categorised as aid for the 
purposes of Article 92 of the Treaty, where 
they are intended to offset the costs arising 
as a result of agreements concluded 
between employers and trade unions, 
which the undertakings are bound to 
observe and which are included, by their 
nature, in their budgets. 
As regards the assessment of those costs, 
agreements concluded by both sides of 
industry form a whole and cannot be 
evaluated by taking account, out of con­
text, of only some of their positive or 
negative aspects for one or other party. In 
view of the variety of considerations which 
induce the two sides of industry to negoti­
ate, and of the fact that the result of their 
negotiations is the fruit of a compromise 
for which each party makes concessions in 
certain areas in exchange for advantages in 
other areas, which are not necessarily 
related, it is in principle impossible to 
evaluate with the required accuracy the 
final cost of such agreements for under­
takings. 
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