Judgment — ECLI:EU:C:2006:417
Date: 2006-06-22
Language of the case: French
Court formation: Second Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: State aids;Competition
Concepts: Powers of the Council
Procedure: Action for annulment - successful

Summary of the Judgment State aid – Power of the Council to authorise aid by way of derogation in view of exceptional circumstances – Conditions of exercise (Arts 87 EC and 88(2) EC) The power held by the Council, laid down in the third subparagraph of Article 88(2) EC, is clearly exceptional in character. It follows that, if the Member State concerned has made no application to the Council under that provision before the Commission declares the aid incompatible with the common market, the Council is no longer authorised to exercise the exceptional power conferred upon it by that provision in order to declare such aid compatible with the common market. Such an interpretation, which makes it possible to avoid the same State aid being the subject of conflicting decisions taken successively by the Commission and the Council, contributes to legal certainty. Furthermore, to hold that a Member State is able to grant to beneficiaries of such unlawful aid new aid in an amount equivalent to that of the unlawful aid, intended to neutralise the impact of the repayments which the beneficiaries are obliged to make pursuant to the decision finding the aid incompatible with the common market would clearly undermine the effectiveness of decisions taken by the Commission under Articles 87 EC and 88 EC. Therefore, the Council can neither counter such a Commission decision by itself declaring that aid compatible with the market, nor undermine the effectiveness of that decision by declaring compatible with the common market, in accordance with the third subparagraph of Article 88(2) EC, an aid designed to compensate the beneficiaries of the unlawful aid declared incompatible with the common market for the repayments they are required to make pursuant to that decision. It follows that the Council was not able validly to adopt a decision finding aid which the Belgian State proposed to grant to certain coordination centres established in Belgium compatible with the common market, contrary to a Commission decision adopted prior to the application to the Council which concerned an identical aid scheme and declared it to be incompatible with the common market. (see paras 24-30, 36-37)