Judgment — ECLI:EU:T:2007:260
Date: 2007-09-12
Language of the case: Italian
Court formation: First Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: State aids;Competition
Concepts: Statement of reasons;Formal investigation procedure;Principle of the protection of legitimate expectations;Commission decision following the formal investigation procedure;Damage to competition and effect on trade;General;Beneficiaries of the aid to be recovered;Aid to employment
Procedure: Action for annulment - unfounded
Origin: Italy

Summary of the Judgment 1. State aid – Effect on trade between Member States – Adverse effect on competition – Criteria for assessment (Art. 87 EC) 2. State Aid – Definition – Employment aid scheme – Included (Art. 87(1) EC) 3. State aid – Not allowed – Derogations – Aid categories, set out in legislation, which can be regarded as compatible with the common market – Regulation No 2204/2002 on aid for employment (Arts 87 EC and 88 EC; Commission Regulation No 2204/2002) 4. State aid – Commission decision finding non-notified aid incompatible with the common market – Obligation to state reasons – Scope (Arts 87(1) EC and 253 EC) 5. State aid – Administrative procedure – Obligation for the Commission to put the parties concerned on notice to submit their observations (Art. 88(2) EC) 6. State aid – Examination by the Commission – Examination of an aid scheme as a whole – Permissible 7. State aid – Recovery of unlawful aid – Application of national law (Art. 88 EC) 1. A State measure providing for an employment aid scheme threatens to distort competition because it reinforces the financial position of some undertakings as compared with that of their competitors and, in particular, threatens to distort competition and affect trade in cases where the beneficiaries compete with products coming from other Member States, even if they do not export their own products themselves. (see para. 68) 2. The fact that a State measure providing for an employment aid scheme is designed to safeguard employment has no bearing on its classification as State aid, since Article 87(1) EC does not distinguish between measures of State intervention by reference to their causes or their aims but defines them in relation to their effects. (see para. 69) 3. In order for an aid scheme to be considered compatible with the common market in the light of Regulation No 2204/2002 on the application of Articles 87 [EC] and 88 [EC] to State aid for employment, it is not enough for the conditions which it sets to be fulfilled only in certain cases where the scheme could, potentially, be applied. It is necessary for the aid granted on the basis of that scheme to fulfil those conditions in all such cases. Accordingly, a State measure providing for an employment aid scheme which does not preclude the grant of aid to a large undertaking in a non-assisted area does not satisfy the conditions laid down in that regulation. Moreover, the purely theoretical possibility that, under that State measure, the business which might be taken over could be a small or medium-sized enterprise is not sufficient for the aid thus notified to be considered compatible with the common market in the light of the Community guidelines on State aid for rescuing and restructuring firms in difficulty. (see paras 94, 101) 4. The obligation to state reasons 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. The statement of reasons required under Article 253 EC must be appropriate for the type of the act at issue and must disclose in a clear and unequivocal fashion the reasoning 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 competent Community court to exercise its power of review. The requirements to be satisfied by the statement of reasons depend on the circumstances 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 statement 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. It follows, in particular, from those principles, that the Commission is required to demonstrate that a measure constitutes State aid and that it is incompatible with the common market. It is not, on the other hand, required to reply point by point to arguments lacking in any relevance relied on by the national authorities concerned or by intervening third parties. Although in certain cases the very circumstances in which the aid has been granted may show that it is liable to affect trade between Member States and to distort or threaten to distort competition, the Commission must at least set out those circumstances in the statement of reasons for its decision. However, the Commission is not required to demonstrate the actual effect of unlawful aid on competition and trade between Member States. The obligation for the Commission to submit such evidence would ultimately favour those Member States which grant aid in breach of the duty to notify laid down in Article 88(3) EC, to the detriment of those which do notify aid at the planning stage. Moreover, according to the wording of Article 87(1) EC, not only aid which ‘distorts’ competition is incompatible with the common market but also aid which ‘threatens’ to do so. (see paras 117-119, 126-127) 5. Publication in the Official Journal of the European Union of a notice of a decision to open the formal investigation procedure referred to in Article 88(2) EC is an appropriate means of informing all interested parties that such a procedure has been initiated. (see para. 141) 6. In the case of an aid scheme, the Commission may confine itself to examining the general characteristics of the scheme at issue without being required to examine each particular case in which it applies, in order to determine whether that scheme contains aid elements. (see para. 142) 7. In view of the mandatory nature of the review of State aid by the Commission under Article 88 EC, undertakings to which aid has been granted may not, in principle, entertain a legitimate expectation that the aid is lawful unless it has been granted in compliance with the procedure provided for by that article. A diligent business operator must normally be in a position to confirm that that procedure has been followed, even if the State in question was responsible for the unlawfulness of the decision to grant aid to such a degree that its revocation appears to be a breach of the principle of good faith. If the beneficiary of the aid considers that exceptional circumstances exist on which it was entitled to base a legitimate expectation that the aid was lawful, and such a case is brought before a national court, it is for that court to assess the aid, if necessary after obtaining a preliminary ruling on interpretation from the Court of Justice. (see paras 154-155)