Judgment — ECLI:EU:T:2003:192
Date: 2003-07-09
Language of the case: Dutch
Court formation: Fourth Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: European Social Fund (ESF)
Concepts: Statement of reasons;European Social Fund;Rights of the defence and procedural guarantees
Procedure: Action for annulment - successful
Origin: Belgium

summary of its findings and does not indicate clearly why it rejected the applicant's comments on the first check report and the conclusions of the D & T report. 90. Second, the Commission also failed to state the reasons why the second check report did not merit consideration with a view to the adoption of the contested decision. 91. Third, the applicant complains that the Commission failed to state reasons for the rejection of its system of lump-sum grants and failed to set out its interpretation of Article 17 of the coordinating regulation. 92. Fourth, it is almost impossible to ascertain from the data furnished in the contested decision the method by which the Commission reached the conclusion that there had been an overpayment of assistance. 93. The applicant adds, finally, that those failures of the Commission are all the more serious since the reasoning behind the contested decision does not correspond to that followed in the first check report and the Commission was unable, in order to substantiate its decision, to accept the results of that report, in regard to which it must have had doubts, since it decided to carry out a second check after studying the D & T report. 94. The defendant contends that a decision is not required to go into every relevant point of fact and law. The question whether the statement of reasons for a decision is sufficient must be assessed with reference not only to its wording but also to its context and the whole body of legal rules governing the matter in question (Case C-122/94 Commission v Council [1996] ECR I-881, paragraph 29, and Case C-278/95 P Siemens v Commission [1997] ECR I-2507, paragraph 17). In that regard, it points out that, since co-financing rates play a crucial role in the administration of the structural funds, it must be assumed that the staff responsible for implementing structural measures in the Member States are made broadly familiar with the application of those rates, an assumption which lowers the threshold of the requirement to state reasons as far as the technical aspects of the reduction are concerned. 95. In any event, the decision shows clearly the nature of the irregularities and the figures on which it is based, thus indicating with clarity the reasons justifying the reduction in the assistance. In particular, in the annex to the contested decision, the defendant described the system which the applicant operated and explained why that system was incompatible with Article 17 of the coordinating regulation. It adds that the sentence [The VFSIPH] carries out the calculation on too high a basis, thereby claiming too large a financial contribution from the ESF shows that the decision refers to failure to abide by the co-financing rates. In addition, it points out that the seventh recital in the preamble to the decision expressly refers to Article 2 of the ESF regulation which, read in conjunction with the general concept of actual expenditure (Article 21 of the coordinating regulation) implies an a priori rejection of lump-sum systems. 96. The defendant further observes that, in its judgment in Case T-182/96 Partex v Commission [1999] ECR II-2673, at paragraphs 76 to 78, the Court held that earlier measures adopted by the national authorities could be regarded as contributing to the reasons for a decision to reduce assistance, provided that the decision in question referred clearly to those measures and in so far as the beneficiary of the assistance was able to take cognisance of them. That reasoning is even more valid as regards the first check report, on which the applicant was able to express its views and to which the fifth recital in the preamble to the contested decision refers clearly. Account should therefore also be taken, in assessing the adequacy of the statement of reasons on which the decision in question is based, of that report, which describes the irregularity in question in clear terms consistent with those used in that decision, and of the letter of 17 August 1999 (see paragraph 20 above), by which the Commission again set out its views on the irregularities found. 97. As far as the second check report and the D & T report are concerned, the defendant repeats its arguments to the effect that those reports are not relevant to the examination of the lawfulness of the contested decision. 98. Finally, the defendant points out that the decision contains in its annex the exact calculations which gave rise to a reduction in respect of the projects delivered by De Werkgaard and GOCI. The applicant has not specified in what respect those calculations are incomplete or incorrect. - Findings of the Court 99. First of all, it is necessary to consider the fourth part of the present plea in law, by which the applicant complains that it is impossible to ascertain from the data contained in the contested decision the reasons which led the Commission to conclude that there had been an overpayment of assistance. 100. According to consistent case-law, the purpose of the obligation to state the reasons on which an individual decision is based is to provide the person concerned with sufficient information to make it possible to ascertain whether the decision is well founded or whether it is vitiated by a defect which may permit its legality to be contested, and to enable the Community judicature to review the lawfulness of the decision. The extent of that obligation depends on the nature of the measure in question and on the context in which it was adopted (judgments of the Court of Justice in Case 32/86 Sisma v Commission [1987] ECR 1645, paragraph 8, Case C-181/90 Consorgan v Commission [1992] ECR I-3557, paragraph 14, and Case C-189/90 Cipeke v Commission [1992] ECR I-3573, paragraph 14; and judgments of the Court of First Instance in Case T-85/94 Branco v Commission [1995] ECR II-45, paragraph 32, Partex v Commission, cited above, paragraph 73, and Asssociação Comercial de Aveiro v Commission, cited above, paragraph 35). 101. Since a decision reducing the amount of ESF assistance originally granted has, in particular, serious consequences for the beneficiary of the assistance, that decision must state clearly the grounds which justify the reduction in the assistance in relation to the amount originally approved (Consorgan v Commission, cited above, paragraph 18; Cipeke v Commission, cited above, paragraph 18; Lisrestal and Others v Commission, paragraph 52; Branco v Commission, cited above, paragraph 33, Partex v Commission, paragraph 74, and Associação Comercial de Aveiro v Commission, paragraph 36). Moreover, the statement of reasons for such a decision must also inform the beneficiary of the assistance of the method by which the reduction effected was calculated (see, to that effect, Consorgan v Commission, paragraphs 22 to 24, and Cipeke v Commission, paragraphs 21 and 22). 102. It is relevant in that regard that, in the present case, although the contested decision certainly makes it clear that the applicant declared to the ESF amounts (expenditure actually incurred by the VTCs) greater than the (lump-sum) amounts which it actually granted to the VTCs, it does not show sufficiently clearly the reasoning on the basis of which the Commission concluded that the amounts declared were greater than the amounts granted. 103. It is noteworthy that, according to the data contained in the annex to the contested decision, the amounts granted by the applicant to the VTCs are greater than the amounts declared to the ESF (BEF 14 471 188 against BEF 13 559 144 for De Werkgaard; BEF 26 635 331 against BEF 17 538 985 for GOCI). 104. However, in determining, for each dossier, the eligible amount to be declared by the VFSIPH to the ESF, the Commission did not take into account the full amounts granted to the VTCs, but excluded a portion of those amounts by the application of an apportionment coefficient. 105. In those circumstances, the Commission had a duty, under Article 253 EC, to explain clearly in its decision the reasons for which it found it necessary not to take into account the full amounts granted by the applicant to the VTCs and to apply to those amounts the apportionment coefficients adopted by it. 106. The unavoidable conclusion is that the Commission did not discharge such an obligation since, in particular, it did not state in the contested decision, any more than it has during the present proceedings before the Court, the reason which led it to fix at 45 000 and 81 000 respectively the denominators of the apportionment coefficients applied to the De Werkgaard and GOCI dossiers, since the wording of the contested decision indicates only that those figures are the product of the multiplication by 1 800 hours of the number of training modules declared by the applicant for each dossier. 107. The relatively obscure explanations concerning the hourly cost of training, contained in the first two paragraphs of the reasons set out in the annex to the contested decision, the meaning and relevance of which were not adequately clarified for legal purposes by the defendant's replies to the questions put by the Court, fail to provide any guidance in this regard. On the contrary, they even seem to be in conflict with the data contained in the correction calculation. The Commission states, in those explanations, that the cost of training amounted, per hour actually provided, to BEF 320 in the case of De Werkgaard (training of a manual worker), whereas if the amount granted to De Werkgaard, as set out in the calculation in question (BEF 14 471 188), is divided by the number of hours actually provided by that VTC (21 342 according to the first check report and the applicant, a figure not disputed by the defendant), the cost borne by the applicant per hour actually provided was equal to BEF 678.06, and therefore much higher than BEF 320. 108. In reply to a written question from the Court, the Commission confined itself to contending that, in adopting as denominators for the apportionment coefficients the amounts of 45 000 and 81 000 respectively, it was merely adhering to the choices made by the Flemish Government when it adopted the Decree of 22 April 1997, which provided for a system of lump-sum grants for VTCs. 109. A mere reference to that decree and to that system is not in itself sufficient to facilitate an understanding of the reasoning followed in the contested decision. In that regard, in the first check report, the Commission, while recalling the characteristic features of the system of lump-sum grants for VTCs, under which for the VFSIPH, training costs are limited to a lump-sum amount of BEF 550 000 per training module ... and the maximum number of training hours is subject to a ceiling of 1 800 hours per year, was nevertheless able to adopt, as the denominator of the apportionment coefficients, not the value mentioned in paragraph 106 above, but a completely different value, namely, the hours actually provided by the VTC concerned. 110. For that same reason, the defendant cannot claim that the reasoning underlying the fixing of the denominator of the apportionment coefficients applied in the correction calculation is apparent from the first check report or, indeed, from the letter of 17 August 1999, in which the Commission merely made a reference to that report, without altering its wording in any way. 111. It must therefore be concluded that the statement of reasons for the contested decision, even when assessed in the light of the context, the legal rules and the previous documents referred to by the defendant, does not show clearly the reasoning on the basis of which the Commission established the eligible amounts paid by the applicant to the VTCs concerned under the system of lump-sum grants and was therefore able to form the view that those amounts were lower than the amounts which the applicant declared to the ESF as eligible for co-financing. 112. The fourth part of the present plea in law, alleging breach of the obligation to state reasons, must therefore be accepted. 113. In the light of all the foregoing, the contested decision must be annulled in so far as it makes a reduction, equivalent to EUR 181 067, in the ESF financial assistance of which the applicant was the beneficiary, and there is no need to examine the other arguments and pleas in law raised by the applicant. Costs 114. Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. In this instance, since the Commission has been unsuccessful, it must, in accordance with the form of order sought by the applicant, be ordered to pay the costs. On those grounds, THE COURT OF FIRST INSTANCE (Fourth Chamber) hereby: 1. Annuls Commission Decision C (2000) 36 of 31 January 2000 reducing the amount of the financial assistance originally provided for by Decision C (1994) 3059 of 25 November 1994 approving the grant by the European Social Fund of aid for an operational programme under the Community support framework for the attainment of Objective 3 in Belgium (Flemish Community) in so far as it makes a reduction, equivalent to EUR 181 067, in the European Social Fund financial assistance of which the Vlaams Fonds voor de Sociale Integratie van Personen met een Handicap was the beneficiary; 2. Orders the Commission to pay the costs. Tiili Mengozzi Vilaras Delivered in open court in Luxembourg on 9 July 2003. H. Jung V. Tiili Registrar President 1: Language of the case: Dutch.