Judgment — ECLI:EU:C:2002:507
Date: 2002-09-19
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: State aids;Competition
Concepts: Statement of reasons;Formal investigation procedure;Commission decision following the formal investigation procedure;Regional aid;Damage to competition and effect on trade;Definition;Rules on aid in connection with the common organization of the agricultural markets
Procedure: Action for annulment - unfounded
Origin: Spain

Summary of the Judgment 
1. State aid — Effect on trade between Member States — Adverse effect on compe­
tition — Aid relatively small in amount 
(Art. 87 EC) 
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SUMMARY — CASE C-113/00 
2. State aid — Investigation by the Commission — No observations from interested 
parties — No effect on the validity of the Commission's decision 
(Art. 88(2) EC) 
3. Acts of the institutions — Statement of reasons — Obligation — Scope 
(Art. 253 EC) 
4. State aid — Commission decision finding aid which has not been notified incom­
patible with the common market — Obligation to state reasons — Scope 
(Arts 88(3) EC and 253 EC) 
5. State aid — Prohibition — Derogations — Aid which may be considered to be 
compatible with the common market — Aid for regional development — Distinction 
between Article 87(3)(a) and (c) EC — Commission's discretion — Reference to the 
Community context 
(Art. 87(3)(a) and (c) EC) 
6. State aid — Prohibition — Derogations — Aid which can benefit from the exemp­
tions referred to in Article 87(2) and (3) EC — Operating aid — Excluded — 
Commission's discretion 
(Art. 87(2) and (3) EC) 
7. Agriculture — Common organisation of the markets — State aid for products 
covered by a common organisation of the markets — Contrary to Community 
rules — Not permissible 
(Art. 34 EC) 
8. Free movement of goods — Quantitative restrictions — Measures having equivalent 
effect on exports — Definition — State aid that promotes local processing of local 
produce 
(Art. 29 EC) 
1. The relatively small amount of aid or 
the relatively small size of the under­
taking which receives it does not as 
such exclude the possibility that intra-
Community trade may be affected. 
Other factors may be decisive when 
assessing the effect of aid on trade, 
such as whether the aid is cumulative 
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SPAIN v COMMISSION 
and whether the undertakings that 
receive it are operating in a sector that 
is particularly exposed to competition. 
(see para. 30) 
2. The fact that no third parties comment 
on aid held incompatible with the 
common market is not such as to affect 
the validity of a decision of the Com­
mission. 
Whilst Article 88(2) EC requires the 
Commission to seek comments from 
interested parties before it reaches a 
decision, it does not prevent the Com­
mission from determining aid to be 
incompatible with the common market 
in the absence of any such comments. 
That circumstance alone does not pre­
clude the possibility that trade between 
Member States might be affected by the 
aid. 
(see paras 38-39) 
3. The obligation to provide a statement 
of reasons laid down in Article 253 EC 
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. Accordingly, the 
statement of reasons required by 
Article 253 EC must be appropriate 
to the act at issue and must disclose in a 
clear and unequivocal fashion the rea­
soning 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 compet­
ent court to exercise its power of 
review. 
Furthermore, that requirement must be 
appraised by reference to the circum­
stances of each case, in particular the 
content of the measure, 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 necess­
ary 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. 
(see paras 47-48) 
4. Where aid is granted by a Member 
State without having been notified to 
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SUMMARY — CASE C-113/00 
the Commission at the planning stage, 
the statement of reasons for a decision 
declaring that aid incompatible with 
the common market need not demon­
strate the real effect of the aid on 
competition or trade between Member 
States. If it were, that requirement 
would ultimately favour 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. 
(see para. 54) 
5. A programme of regional aid may fall 
within one of the exemptions in 
Article 87(3)(a) and (c) EC in certain 
circumstances. 
The use of the words 'abnormally' and 
'serious' in Article 87(3)(a) shows that 
the exemption concerns only areas 
where the economic situation is 
extremely unfavourable in relation to 
the Community as a whole. The 
exemption in Article 87(3)(c), on the 
other hand, is wider in scope inasmuch 
as it permits the development of certain 
areas in a Member State which are 
disadvantaged in relation to the 
national average without being 
restricted by the economic conditions 
laid down in Article 87(3)(a), provided 
such aid 'does not adversely affect 
trading conditions to an extent 
contrary to the common interest'. 
Conversely, the fact that that condition 
is not mentioned in the exemption 
under Article 87(3)(a) implies greater 
latitude in granting aid to undertakings 
in regions which do not meet the 
criteria laid down in that exemption. 
Nevertheless, the difference in wording 
between Article 87(3)(a) EC and 
Article 87(3)(c) EC cannot lead to the 
conclusion that the Commission should 
take no account of the Community 
interest when applying Article 87(3)(a), 
and that it must confine itself to 
verifying the specifically regional 
impact of the measures involved, with­
out assessing their impact on the rel­
evant market or markets in the Com­
munity as a whole. In such cases the 
Commission is bound not only to verify 
that the measures are such as to con­
tribute effectively to the economic 
development of the regions concerned, 
but also to evaluate the impact of the 
aid on trade between Member States, 
and in particular to assess the sectorial 
repercussions they may have at Com-
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SPAIN v COMMISSION 
munity level. Article 87(3) EC gives the 
Commission a discretion the exercise of 
which involves economic and social 
assessments which must be made in a 
Community context. 
(see paras 64-67) 
6. Aid granted according to the quantities 
of particular horticultural products 
produced for industrial processing in 
a region of a Member State that 
enables farmers in that region to avoid 
expenses which they would normally 
have had to incur as part of their 
day-to-day running costs must be 
regarded as operating aid in the agri­
cultural sector. 
Where the national authorities have 
provided no evidence that the aid in 
question was by its nature likely to 
make an effective and lasting contribu­
tion to the economic development of 
that region, the Commission does not 
exceed the limits of its discretion in 
finding that the aid in question cannot 
benefit from any of the exemptions 
referred to in Article 87(2) and (3) EC 
and is therefore incompatible with the 
common market. 
(see paras 68-70) 
7. Once the Community has, pursuant to 
Article 34 EC, legislated for the estab­
lishment of a common organisation of 
the market in a given sector, Member 
States are under an obligation to 
refrain from taking any measure which 
might undermine or create exceptions 
to it. 
If that regulation establishes an inte­
grated regulatory framework that 
already contains measures of financial 
support for the sector concerned, a 
Member State may not unilaterally 
award aid related to production, even 
if the aid is limited to certain specific 
products intended for industrial pro­
cessing and even though the quantity is 
subject to a ceiling. It is for the 
Community to seek solutions to the 
problems which might arise in the 
context of the common agricultural 
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SUMMARY — CASE C-113/00 
policy once it has established a com­
mon organisation of the market in a 
given sector. 
(see paras 73-74) 
8. Where an aid scheme establishes a 
financial incentive to producers estab­
lished in a particular region of a 
Member State to sell horticultural 
products to local processors, it must 
be regarded as a measure having 
equivalent effect to a quantitative 
restriction on exports, which is pro­
hibited by the Treaty. 
(see para. 77) 
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