OPINION OF ADVOCATE GENERAL
BIONDI
delivered on 26 March 2026 (1)
Case C‑505/24 P
Condor Flugdienst GmbH
v
Ryanair DAC,
European Commission
( Appeal – State aid – German air transport market – Aid granted to an airline by the Federal Republic of Germany in the context of the COVID‑19 pandemic – Temporary framework for State aid measures – Recapitalisation of Condor Flugdienst GmbH – Decision by the European Commission not to raise objections – Action for annulment – Article 107(3)(c) TFEU – Point 67 of the Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty – Burden sharing )
I.      Introduction
1.        Rescue and restructuring aid (‘R&R aid’) constitutes one of the most distortive forms of State aid under EU law. As recognised in point 6 of the Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty, (2) the exit of inefficient undertakings is a normal and desirable feature of a functioning market economy, allowing more efficient and technologically advanced competitors to grow. By intervening in that process, R&R aid risks delaying necessary market adjustments and may significantly slow economic growth in the sectors concerned, having a negative impact on the wider economy and producing harmful effects on the internal market.
Owing to such potentially severe distortions of competition, R&R aid is justified only in narrowly defined circumstances.
2.        The R&R Guidelines, which set out the conditions under which R&R aid may be considered to be compatible with the internal market on the basis of Article 107(3)(c) TFEU, clearly distinguish between rescue aid, which provides temporary assistance, and restructuring aid, which aims to restore the long-term viability of the undertaking (3) with
a view to enabling it to compete on the market on its own merits, without continued State support. (4)
3.        As concerns restructuring aid,
Section 3.5.2 of the R&R Guidelines lays down specific requirements in order to ensure that the amount and intensity of the aid is limited to the strict minimum necessary to enable restructuring to be undertaken. To that end, a significant level of ‘own contribution’ to restructuring costs (5) and adequate ‘burden sharing’ must be ensured.
4.        Burden sharing is a relatively new requirement in State aid law. It first appeared in the 2009 State aid guidelines for the banking sector, (6) before moving to the forefront in the 2013 Banking Communication. (7) It was then included in the revised 2014 R&R Guidelines,
which were adopted as part of a broader State aid modernisation (SAM) programme. Regulated in Section 3.5.2.2 of those latter guidelines, it requires, in the first place, that shareholders and, where appropriate, subordinated creditors
absorb existing losses in full before public funds are injected. (8) Burden sharing ensures that aid is not used to shield investors from the consequences of past business decisions, as that could create moral hazard and undermine market discipline. (9) Indeed, the risk of moral hazard, arising when undertakings may anticipate that they are likely to be rescued when they run into difficulty and embark upon excessively risky and unsustainable business strategies, is a central concern underpinning the framework of the R&R Guidelines. (10)
5.        Adequate burden sharing under the R&R Guidelines
does not only require
that past losses be
absorbed in full before any State intervention.
As specified in point 67 of those guidelines, it also requires that State aid that enhances the beneficiary’s equity position
‘should be granted on terms that afford the State a reasonable share of future gains in value of the beneficiary, in view of the amount of State equity injected in comparison with the remaining equity of the company after losses have been accounted for’.
The dispute at the heart of the present appeal concerns the application of that specific requirement.
II.    Background to the dispute, the decision at issue, the judgment under appeal and forms of order sought
6.        During the period from 2019 to 2021, the appellant, Condor Flugdienst GmbH (‘Condor’) benefited from several State aid measures, which may be categorised into two groups, namely, on the one hand, aid measures intended to resolve its financial difficulties caused by the insolvency of its former parent company, Thomas Cook Group plc (‘Thomas Cook’), and, on the other hand, aid measures to make good the damage it had suffered as a result of the imposition of travel restrictions linked to the COVID-19 pandemic, from 17 March to 31 December 2020 (‘the COVID-19 aid of 2020’), and from 1 January to 31 May 2021 (‘the COVID-19 aid of 2021’). (11)
7.        By a decision of 26 April 2020, the European Commission approved the COVID-19 aid of 2020, which took the form of two loans totalling EUR 550 million (‘the COVID-19 loans of 2020’), backed by a State guarantee, on the basis of Article 107(2)(b) TFEU. (12)
8.        By judgment of 9 June 2021, Ryanair v Commission (Condor; COVID‑19), (13) the General Court annulled that decision, owing to a failure to state reasons.
9.        On 26 July 2021,
in the first place, the Commission again approved the COVID-19 aid of 2020. However, in order to comply with the aforementioned judgment, the Commission’s decision, first, excluded from the calculation of the damage suffered by Condor the costs it had incurred owing to the extension of the insolvency procedure. Second, on the basis of ex post data provided by the German authorities, it found that Condor had been overcompensated in the amount of EUR 91.745 million, plus interest. (14)
10.      In the second place, the Commission approved
the COVID-19 aid of 2021, which took the form of a partial write-off, amounting to EUR 60 million, of debt resulting from the COVID-19 loans of 2020, as compatible with the internal market on the basis of Article 107(2)(b) TFEU. (15)
11.      Lastly,
the Commission,
on the basis of Article 107(3)(c) TFEU and the R&R Guidelines, approved an aid measure to support the restructuring and continuation of Condor’s operations, which comprised two parts (‘the measure concerned’). The first part consisted
of a modification to the terms of the COVID-19 loans of 2020 and a partial write-off of EUR 90 million of debt resulting from those loans. The second part involved the write-off of EUR 20.2 million of debt corresponding to the interest payable by Condor following the amended decision on the COVID-19 aid of 2020 (16) (‘the decision at issue’). Both were part of a financial package negotiated by the Federal Republic of Germany, Condor’s new private shareholder, Attestor Limited (‘Attestor’), and the German public development bank,
the Kreditanstalt für Wiederaufbau (‘KfW’), with a view to supporting the restructuring and the continuation of Condor’s operations (‘the purchase agreement’).
12.      Ryanair DAC (‘Ryanair’) brought an action for annulment of the decision at issue, claiming, inter alia, that its procedural rights as an interested party had been infringed through the Commission’s failure to initiate the procedure laid down in Article 108(2) TFEU, despite serious difficulties in assessing the compatibility of the aid. (17) In the judgment under appeal, the General Court rejected most of the pleas in law put forward by Ryanair,
except for two
complaints raised in the sixth plea, alleging a failure by the Commission
to establish the proportionality of the aid. The General Court found that Ryanair had demonstrated to the requisite legal standard that the Commission should have had doubts which justified the initiation of the procedure under Article 108(2) TFEU, first, as to whether the measure concerned satisfied the requirement of adequate burden sharing set out in point 67 of the R&R Guidelines and, second, whether the scope of the measures to limit distortions of competition complied with the requirements set out, in particular, in Section 3.6.2.2 of those guidelines.
13.      The General Court therefore annulled the decision at issue
without examining the remaining two pleas, relating to a breach of the principles of non-discrimination, the free provision of services and free establishment, and to a breach of the duty to state reasons. (18)
14.      Following the General Court’s judgment, Condor
lodged an appeal before the Court of Justice on 18 July 2024. Condor, Ryanair, the Federal Republic of Germany and the Commission were heard at the hearing held on 20 November 2025.
15.      By its appeal, Condor claims that the Court of Justice should set aside the judgment under appeal, dismiss Ryanair’s action in its entirety and order Ryanair to bear the costs relating to the proceedings at first instance and to the appeal proceedings.
16.      The Commission and the Federal Republic of Germany both contend that the Court should uphold the appeal, set aside the judgment under appeal and order Ryanair to pay the costs.
17.      Ryanair contends that the Court should dismiss the appeal and order Condor to pay the entirety of the costs incurred by Ryanair in the present proceedings.
III. The appeal
18.      In support of its appeal, Condor puts forward three grounds of appeal. By its first ground of appeal, it challenges the General Court’s interpretation of the scope of point 67 of the R&R Guidelines. By its second ground of appeal, it
claims that the decision at issue in any case complies with point 67 and that the General Court essentially failed to assess the content of that decision. By its third ground of appeal, Condor argues that the alleged flaw in the Commission’s examination had no impact on the outcome of the decision at issue.
19.      As requested by the Court, the present Opinion will focus exclusively on the second ground of appeal.
A.      Second ground of appeal
20.      By its second ground of appeal, Condor, supported by the Commission and the Federal Republic of Germany, challenges paragraphs 207, 232 and 233 of the judgment under appeal.
21.      In those paragraphs, the General Court found that the Commission had failed to assess whether the measure concerned complied with the requirements set out in point 67 of the R&R Guidelines. The General Court stated that there was nothing in the decision at issue to suggest that the Commission had addressed the question of whether the measure concerned had been granted on terms that would afford the Federal Republic of Germany a reasonable share of future gains in value of Condor. (19) In paragraph 232 of that judgment, the General Court rejected Condor’s argument that the future repayment of the remaining portion of the debt left from the COVID‑19 loans of 2020 could be considered to afford the State ‘a reasonable share of future gains in value’ of Condor, within the meaning of point 67 of the R&R Guidelines. First, according to the General Court, that argument supplemented the statement of reasons for the decision at issue. Second, the General Court held that accepting Condor’s argument risked rendering point 67 of the R&R Guidelines meaningless. It explained that, by its very essence, a partial write-off of debt implies that the part of the debt not written off will be repaid. Condor’s argument amounted, therefore, to excluding de facto the partial write-off of debt from the scope of point 67 of the R&R Guidelines.
22.      Condor argues that the General Court erred in considering that the Commission should have had doubts as to whether the measure concerned satisfied the requirement set out in point 67 of the R&R Guidelines. According to Condor, the decision at issue contains sufficient elements to consider that that requirement has been complied with, even though it does not contain an explicit reference to point 67.
23.      I would observe, at the outset, that, according to settled case-law, in reviewing the legality of acts under Article 263 TFEU, the EU Courts cannot, under any circumstances, substitute their own reasoning for that of the author of the contested act. (20) Having concluded that the Commission had failed to examine whether the measure in question complied with point 67 of the R&R Guidelines, it was not for the General Court to carry out such an assessment, by determining whether, on the basis of the information contained in the decision at issue, the measure concerned had been granted on terms that would afford the Federal Republic of Germany a reasonable share of future gains in value of Condor.
24.      It is true, as Condor argues, that the Court of Justice stated in the judgment of 28 September 2023, Ryanair v Commission, (21) that the General Court is competent to recall the content of the decision contested before it and to draw conclusions from the information contained therein. However, that does not empower the General Court, nor does it require it, to carry out, of its own initiative, an assessment that the Commission has failed to undertake, in particular when such an assessment implies the exercise of discretion. According to the case-law, the finding of an insufficient or incomplete examination constitutes an indication of the existence of serious difficulties in the assessment of the measure at issue which, in itself, calls into question the lawfulness of a decision not to raise objections, such as the decision at issue. (22)
25.      Whilst Condor is thus entitled to challenge the General Court’s conclusion that the decision at issue did not contain an assessment of compliance with point 67 of the R&R Guidelines, it cannot criticise the General Court for failing to assess whether, in the light of the elements contained in the decision at issue, the measure concerned complied with that point.
26.      Having clarified that issue, I shall turn to addressing the two distinct claims that Condor has put forward. I shall then examine the specific arguments made by the Commission and the Federal Republic of Germany in support of the second ground of appeal.
1.      The first submission of the second ground of appeal
27.      By the first submission
of the second ground of appeal, Condor claims
that, in rejecting the argument that the future repayment of the remaining portion of the debt left from the COVID‑19 loans of 2020 could be considered to afford the State ‘a reasonable share of future gains in value’ of Condor within the meaning of point 67 of the R&R Guidelines, the General Court manifestly distorted both Condor’s submissions
and those of the Commission.
The General Court was wrong to consider that Condor had ‘supplemented during the proceedings’ the statement of reasons for the decision at issue. (23) Both the Commission and Condor had in reality argued in
their respective submissions that recital 126 of that decision clearly showed
that Attestor’s bid offered the best conditions for the repayment of the public loans and that the financial package offered by Attestor also reflected the potential future profits that Condor could generate. (24)
28.      In the aforementioned recital 126 of that decision, after briefly outlining the different components of the measure concerned, the Commission stated that the
conditions of the purchase agreement and the restructuring of the COVID-19 loans of 2020
were a
package geared to maximising the benefits for Attestor as well as optimising the
reimbursement of the loan, and depended on each other. While the overall interest amount due on the restructured loan was lower than that of the original loan, ‘it [was] part of a negotiated package aiming to maximise the return for Attestor as well as for the German [G]overnment and can thus be considered to constitute an appropriate remuneration of the aid’.
29.      I fail to see how that recital can be considered to address the issue of whether the component of the measure concerned
identified by the General Court as falling within the scope of point 67 of the R&R Guidelines, namely the partial write-off of debt, complied with the requirement laid down in that point. The assessment contained in recital 126 concerns the conditions under which the part of the debt that had not been written off would be remunerated. It rather relates to the requirement, in point 54 of the guidelines, that aid to undertakings in difficulty should be properly remunerated. There is nothing in that recital to indicate that the Commission assessed whether the partial write-off of debt provided for in the measure concerned afforded the Federal Republic of Germany a reasonable share of future gains in value of the beneficiary.
30.      The General Court did not distort Condor’s argument based on recital 126 of the decision at issue. It simply rejected that argument after finding that there was nothing in the decision at issue, including therefore recital 126, to suggest that the Commission had assessed whether the measure concerned – which had been considered to enhance
Condor’s equity position – afforded the State a reasonable share of future gains in value of Condor, as required by point 67 of the R&R Guidelines.
The first submission of the second ground of appeal should, therefore, in my view, be rejected.
2.      The second submission of the second ground of appeal
31.      By the second submission of the second ground of appeal, Condor argues that the General Court erred in law by finding that securing the best conditions for the repayment of the public loans through the package offered by Attestor could not be considered to afford the State a reasonable share in future gains within the meaning of point 67 of the R&R Guidelines. That package included a partial write-off, as well as an earn-out mechanism for parts of the loans restructured, whereby, if the company performed well, a larger portion of the loan
amount would be repaid.
The General Court’s argument that ‘by its very essence, a partial write-off of debt implies that the part of the debt not written off will be repaid’ (25) failed to respond to the arguments raised by Condor and the Commission based on recital 126 of the decision at issue.
32.      As I have already noted in point 29 of the present Opinion, recital 126 of the decision at issue does not address at all the question of the compliance of the write-off of debt with point 67 of the R&R Guidelines. Merely
finding that the financial package agreed with Attestor constituted appropriate remuneration of the aid could not lead the General Court to consider that the Commission had duly assessed that requirement and correctly concluded, without any
need for further enquiry, that it afforded the Federal Republic of Germany a reasonable share of future gains in value of Condor
in return for the partial write-off of debt included in the measure concerned.
33.      As regards the earn-out mechanism provided for in the aforementioned package, it is not disputed that that mechanism constitutes a condition attached to the repayment of the remaining part of the loan restructuring and thus it is not relevant for the purpose of determining whether the partial write-off of debt agreed by the Federal Republic of Germany complied with point 67 of the R&R Guidelines. To conclude otherwise would amount, as observed by the General Court in paragraph 232 of the judgment under appeal, to excluding de facto the partial write-off of debt from the scope of point 67 of those guidelines.
34.      Therefore, the General Court did not err in law, nor did it fail to reply to
the arguments of Condor and the Commission
based on recital 126 of the decision at issue. To accept that argument would have meant filling in the gaps in the statement of reasons of the decision at issue or in the assessment of compliance with the requirements laid down in the R&R Guidelines conducted by the Commission. Both are prohibited in the context of reviews of the legality of Commission decisions pursuant to Article 263 TFEU.
35.      I am therefore of the view that the second submission of the second ground of appeal should also be rejected.
3.      The arguments put forward by the Commission and the Federal Republic of Germany in support of the second ground of appeal
36.      In support of Condor’s second ground of appeal, the Commission argues that the assessment showing the aid’s compliance with point 67 of the R&R Guidelines is contained in recitals 135 and 136 of the decision at issue, where
it
found that,
due to a total loss of the rights of the incumbent shareholder (26) and an almost total loss of the claims of Condor’s creditors, (27) the measure concerned
involved appropriate burden sharing. (28) According to the Commission, the General Court disregarded both that assessment and its main arguments raised in that regard in its defence and rejoinder, thereby misinterpreting the decision at issue (29) and failing to state reasons.
37.      The Commission
also claims that the General Court misinterpreted point 67 of the R&R Guidelines. It argues that points 66 and 67 thereof seek to reduce the risk of moral hazard in relation to existing investors by preventing restructuring aid from protecting them from the consequences of their choice to invest in the beneficiary. The ‘existing investors’ are the incumbent shareholders and, to a certain extent, subordinated creditors. Attestor, whose entry into Condor was made possible by the approval of the measure concerned, should not be understood as a shareholder for the purposes of point 67 of the R&R Guidelines. The burden sharing required under point 67 is in proportion to ‘the remaining equity of the company after losses have been accounted for’. Therefore, where, as in the present case, there is a total loss of the rights of the incumbent shareholder and an almost total loss of the claims of creditors, any share of the State in the future upsides of the restructuring is reasonable, including a share of 0%. The Federal Republic of Germany makes a similar argument in its response.
38.      Those claims have been endorsed by Condor in its reply and at the hearing.
39.      The Commission and the Federal Republic of Germany also submit that the General Court disregarded the discretion enjoyed by the Commission as far as complex economic and/or social assessments are concerned. In particular, the Federal Republic of Germany criticises the General Court for having extended the limits of its judicial review of decisions not to raise objections pursuant to Article 4 of Council Regulation (EU) 2015/1589. (30) The Federal Republic of Germany adds that, for the purpose of answering the question as to whether the Commission should have entertained doubts as to the compatibility of the aid at issue with point 67 of the R&R Guidelines, it is irrelevant whether, or to what extent, the decision at issue expressly refers to point 67 of the R&R.
That would, at most, be of relevance to the question of whether or not the decision at issue contains an adequate statement of reasons. The General Court confused those aspects, thereby erring in law. The Commission, for its part, argues that the General Court has failed to recognise the discretion it enjoys in the interpretation of the R&R Guidelines.
40.      At the hearing before the Court, Ryanair raised a plea of inadmissibility, claiming that the Commission’s argument regarding recitals 135 and 136 should have been raised as part of a cross-appeal, as it is a ground that had not been raised by Condor in its appeal.
41.      It must be recalled that, in accordance with Articles 172 and
174 of the Rules of Procedure of the Court of Justice, parties to the relevant case before the General Court having an interest in the appeal being allowed or dismissed may submit a response which seeks to have that appeal allowed or dismissed, in whole or in part. Those parties may also, by virtue of Article 176 and Article 178(1) and
(3), second sentence, of the Rules of Procedure, submit a cross-appeal, which must be introduced by a document, separate from the response, which seeks to have annulled, in whole or in part, the decision of the General Court on the basis of pleas in law and arguments separate from those relied on in the response. According to the Court’s case-law, it is apparent from
those provisions that the response referred to in Article 172 of those rules may not seek to have the judgment of the General Court set aside on the basis of distinct and independent grounds from those raised in the appeal, since such grounds may be raised only as part of a cross-appeal. (31)
42.      In the present case, the plea raised by the Commission, alleging that the General Court disregarded the assessment in recital 135 of the decision at issue,
does not relate to any ground put forward by Condor in support of its appeal. Although formally made in support of the second ground of appeal, it raises an entirely new challenge to the General Court’s reasoning. According to the Commission, the assessment of compliance with point 67 of the R&R Guidelines is set out in recital 135 of that decision,
in which the Commission found that there was no remaining equity capital that would have enabled the Federal Republic of Germany to benefit from a reasonable share of Condor’s future increases in value.
By contrast, Condor has claimed in its appeal that point 67 was addressed by the Commission in recital 126 of the decision at issue and that the financial package agreed with Attestor granted the Federal Republic of Germany such a share.
43.      The Commission’s plea is also based on an interpretation of point 67 of the R&R Guidelines that differs and contradicts the one supported by Condor. While Condor, in its first ground of appeal, has explicitly rejected the premiss that a risk of moral hazard is the rationale underlying point 67 of the R&R Guidelines and claims that the General Court unlawfully transferred that
rationale, which actually underlies points 65 and 66, to point 67, the Commission maintains that reducing such risk is indeed the main objective of that latter point. Moreover, the Commission argues that point 67 of the R&R Guidelines does not concern new investors, whereas, in its appeal, Condor has claimed that the financial package offered by Attestor constituted appropriate remuneration for the aid and afforded the State a reasonable share of future profits that Condor might generate, implicitly recognising that the aforementioned point 67 may impact new investors.
44.      Finally, and most importantly, in challenging the General Court’s conclusion that the decision at issue did not contain an assessment of compliance with point 67 of the R&R Guidelines, Condor, in its appeal, and the Commission, in its response,
allege different errors in law. While the Commission raises a misinterpretation of the aforementioned point 67 and of recital 135 of the decision at issue, Condor alleges that its submission on the relevance of recital 126 was distorted, and that the General Court’s reasoning in rejecting that submission based on recital 126 of the decision was flawed and inadequate or otherwise insufficient.
45.      I am therefore of the view that the Commission has raised a distinct and autonomous plea in law in its response, which should be declared inadmissible. The same conclusion applies to the analogous plea raised by the Federal Republic of Germany, and to the pleas of the Commission and the Federal Republic of Germany referred to in point 39 of the present Opinion. In that respect, I would note that Condor has argued that the General Court disregarded the Commission’s margin of discretion in its first ground of appeal, with respect to the question of whether point 67 of the R&R Guidelines applies to the write-off of debt, and in the context of its third ground of appeal,
in relation to the appropriateness of the measure to limit distortions of competition, but not in the context of its second ground of appeal.
46.      By contrast, the claim raised by the Commission that the General Court disregarded its main argument, raised in its defence and in the rejoinder at first instance, regarding recitals 135
and 136 of the decision at issue,
is
admissible.
47.      The Court has, in fact, clarified that, in the context of an appeal, the purpose of review is, inter alia, to ascertain whether the General Court addressed, to the requisite legal standard, all the arguments put forward by the appellant and that a plea alleging that the General Court failed to address arguments relied on at first instance amounts essentially to alleging a failure to comply with the obligation to state reasons. (32) An absence of or an inadequate statement of reasons is a plea involving a matter of public policy which may, and even must, be raised by the Court of its own motion. (33)
48.      However, that plea is, in my view, unfounded.
49.      In support thereof, the Commission refers to paragraphs 122 and 123 of its defence and to paragraphs 94 and 95 of its rejoinder at first instance.
50.      In those two paragraphs
of its defence, addressing Ryanair’s sixth plea, the Commission put forward an argument that the burden-sharing requirement had been complied with. Specifically, first, it
observes
that the shares in Condor had been placed in a trust, with Condor’s previous owner losing all the value of its shareholding and not benefiting in any way from any upside of a successful restructuring of the beneficiary. Second, it states that the beneficiary’s creditors also wrote off almost all of their claims in the insolvency procedure. Recital 135 of the decision at issue, which is referred to only once in the Commission’s defence, is mentioned in footnote 164 thereto in support of that argument. Neither the reference to recital 135 of the decision at issue nor the argument made by the Commission in paragraphs 122 and 123 of its defence specifically addresses
point 67 of the R&R Guidelines.
51.      In paragraphs 94 and
95 of its rejoinder, the Commission argued that Ryanair had failed to adduce evidence to support its claim that the selling price of Condor would not have reflected the potential future profits the beneficiary could generate and recalled that ‘the purpose of burden sharing is to ensure that the incumbent owners (and subordinated creditors) do not unduly benefit from equity support by the State but that they bear the losses in full where possible’. (34)
52.      I recall that, according to the case-law, the General Court is not required to provide an account which follows exhaustively and one
by
one all the arguments put forward by the parties to the case. The General Court’s reasoning may therefore be implicit on the condition that it enables the persons concerned to know why it has not upheld their arguments and provides the Court of Justice with sufficient material for it to exercise its power of review. (35)
53.      In the present case, the mere reference to recital 135 of the decision at issue in the Commission’s written submissions at first instance cannot reasonably be characterised as ‘main arguments’. In those circumstances, the General Court was not required to go further than simply stating that the decision at issue lacked an assessment of compliance with point 67 of the R&R Guidelines.
54.      It must also be observed that the interpretation of point 67 of the R&R Guidelines advocated in the Commission’s response in the present appeal – according to which that point
is not intended to apply to new investors and allows for
a State share of 0% when there is no remaining equity of the company after losses have been accounted for – does not appear in the decision at issue or in the Commission’s written submissions before the General Court. It seems to have only been developed in the present proceedings. Rather than challenge the findings of the General Court or a failure by it to state reasons, the Commission’s argument actually appears to seek to supplement the reasoning of the decision at issue, which is not permitted at the stage of an action for annulment before the General Court, let alone at the stage of an appeal before the Court of Justice.
55.      In those circumstances, the General Court cannot be criticised for failing to provide specific reasons to address points which were neither clearly articulated nor substantively developed before it. Nor can it be criticised for having focused on the argument alleging that point 67 of the R&R Guidelines
is not applicable to the write-off of debt, developed by the Commission during the proceedings at first instance. (36)
56.      It follows from all of the foregoing that the pleas put forward by the Commission and by the Federal Republic of Germany in support of the second ground of appeal should, in my view, be rejected as partly inadmissible and partly unfounded.
57.      The following considerations
on the merits of the pleas which, in my view, should be declared inadmissible, are therefore put forward in the event that the Court does not agree with my proposal.
58.      At the outset, I wish to address the two claims raised by the Federal Republic of Germany and the Commission, as referred to in point 39 of the present Opinion.
59.      The Federal Republic of Germany criticises the statement made by the General Court in paragraph 35 of the judgment under appeal,
according to which judicial review of the existence of ‘doubts’ (37) as to whether the measure concerned, in so far as it falls within the scope of Article 107(1) TFEU, is compatible with the internal market, will, by nature, go beyond consideration of whether or not there has been a manifest error of assessment. The Federal Republic of Germany
claims that such an approach results in a more extensive review of a Commission decision not to initiate a formal investigation procedure pursuant to Article 4 of Regulation 2015/1589 than that of a Commission decision adopted at the end of such a procedure.
60.      I recall that the assessment of the compatibility of aid measures with the internal market, under Article 107(3) TFEU, falls within the exclusive competence of the Commission, (38) which enjoys, including in the preliminary examination of a given measure, a wide discretion, the exercise of which involves complex economic and social appraisals. Accordingly, it is settled case-law of the Court that the review of those appraisals is limited. (39)
61.      However, it should be borne in mind that the question whether serious difficulties exist at the preliminary examination stage, justifying the decision to initiate the formal investigation procedure, is distinct from the substantive compatibility assessment of the measure. As correctly pointed out by the General Court in paragraph 35 of the judgment under appeal, the concept of ‘doubts’ set out in Article 4(3) and (4) of Regulation 2015/1589, which takes the form of the existence of serious difficulties encountered by the Commission in its examination of whether the measure at issue constitutes aid or whether it is compatible with the internal market, is objective in nature. (40) The EU Courts must be able to determine objectively, comparing the grounds of the decision not to raise objections
with the information available to the Commission at the time of its adoption, whether that institution was in a position to resolve all the relevant issues without initiating the formal investigation procedure. While the substantive economic or social appraisals in support of the conclusion that initiating the formal investigation procedure is not required are subject to limited judicial review, the question of whether that conclusion meets the legal standard of the ‘absence of serious difficulties’ is not. The claim put forward by the Federal Republic of Germany must therefore, in my view, be rejected.
62.      As concerns the Federal Republic of Germany’s claim that the General Court erroneously confused the absence of an adequate statement of reasons in the decision at issue with the existence of serious difficulties, as I have already mentioned, according to the case-law, the finding of an insufficient or incomplete examination calls into question the lawfulness of a decision not to raise objections, in that this constitutes an indication of the existence of serious difficulties in the assessment of the measure concerned. (41) Therefore, that claim should also be rejected.
63.      As for the Commission, it submits
that guidelines are of a different nature than binding acts of EU law (42) and that it is incorrect to interpret them using the same methods of interpretation. When, in the application of its guidelines, the Commission finds that the wording of those guidelines is open to several interpretations, it should retain its discretion to adopt the interpretation that best reflects its State aid policy. Accordingly, judicial review by the EU Courts should be limited to establishing whether the Commission’s interpretation is vitiated by a manifest error. Once it is found that the Commission’s interpretation of such guidelines is at least plausible, it cannot be considered that the Commission exceeded its discretion.
64.      I do not agree with that line of reasoning. The interpretation of a legal instrument, irrespective of its nature, is a different task from that of reviewing whether it has been applied consistently and lawfully. The process of interpretation involves establishing the meaning of what is being interpreted, including where it is an expression of the discretion enjoyed by the author.
65.      If one accepts that the EU Courts are entitled to interpret the Commission’s guidelines on the application of Article 107(3) TFEU, as I believe is correct, such a task must be exercised in accordance with predefined criteria that are objective in nature, even when it comes to reconstructing their author’s intention. Those criteria can be found in the case-law.
66.      The Court has consistently held that, for the purpose of interpreting a provision of EU law, it is necessary to consider not only the wording of such a provision, but also its context and the objectives of the rules of which it is part. (43) That case-law has been relied upon –
in my view rightly so – to interpret both Commission decisions (44) and guidelines, namely in the field of State aid, including by the Court of Justice itself. (45) In the same vein, other well-established principles on the interpretation of provisions of EU law should be deemed to be equally applicable when it comes to Commission guidelines.
That includes the principle that where such a provision is open to several interpretations, preference must be given to the one that ensures that the provision retains its effectiveness. (46)
67.      Contrary to the Commission’s claim, ambiguity increases, rather than decreases, the need for judicial interpretation, even when it comes to instruments such as the R&R Guidelines. It is the task of the EU Courts to address any lack of clarity or inconsistency in wording by employing a systematic and, above all, teleological interpretation. The latter involves taking into account not only the purpose and general scheme of such instruments, but also the objectives pursued by Article 107(3) TFEU and, more generally, by the State aid rules, in order to ensure consistency with those objectives and guarantee their effectiveness. To consider that the Commission has full discretion, whenever the wording of a set of guidelines is open to several interpretations, to retain
its own interpretation where plausible would, in my view, diminish the effectiveness of judicial review and erode legal certainty by potentially allowing the Commission to use a lack of precision to circumvent its own, self-imposed rules.
68.      I will now turn to examining the merits of the claims submitted by the Commission and the Federal Republic of Germany detailed in points 36 and 37 of the present Opinion. Those claims are based on an interpretation of point 67 of the R&R Guidelines to the effect that the requirement laid down in that point concerns only incumbent shareholders or subordinated creditors and not new investors or the beneficiary itself.
69.      Point 67 of the R&R Guidelines applies to ‘any State aid that enhances the beneficiary’s equity position’ and requires that, in such situations, the State ‘should’ be afforded ‘a reasonable share of future gains in value of the beneficiary’, to be determined ‘in view of the amount of State equity injected in comparison with the remaining equity of the company after losses have been accounted for’ (emphasis added). Arguably,
point 67 of the R&R Guidelines is intended to apply once the burden-sharing requirements laid down in point 66 of those guidelines have been applied and there is positive equity remaining against which such a comparison can be made. Point 67 would thus constitute an extra step, conditional to the existence of remaining equity after point 66 has been abided by. The reference to ‘remaining equity’ is,
however,
far from being unambiguous, especially when one considers that the requirement of a ‘reasonable share of future gains’ concerns a different point in time than losses absorption and is applied only once the beneficiary’s viability has been restored.
In and of itself, that reference
does not make it possible to conclude that point 67 of the R&R Guidelines concerns solely existing shareholders and subordinated creditors and not investors intervening in the restructuring plan alongside the State.
70.      With regard to the contextual analysis, it must be noted that point 67 appears in Section 3.5.2.2 of the R&R Guidelines, regarding burden sharing, and follows points 65 and 66, which are expressly framed as applying to existing investors. Those points identify, in explicit terms, incumbent shareholders and subordinated creditors as bearing the primary responsibility for absorbing any losses before State aid is granted. However, point 67
also
adds an autonomous and cumulative requirement to those of
point 66, as its opening words,
‘adequate burden sharing will also mean’ (emphasis added), make clear. (47) Moreover, points 65 to 67 form part of Section 3.5 of the R&R Guidelines, headed ‘Proportionality of the aid/aid limited to the minimum’. Point 61 of that that section
states that the amount and intensity of restructuring aid must be limited to the strict minimum necessary to enable restructuring to be undertaken and that a sufficient level of own contribution to the costs of the restructuring and burden sharing must be ensured. It follows that
it cannot be concluded from the context in which it appears that point 67 is manifestly confined to incumbent shareholders and subordinated creditors in the same manner as points 65 and 66.
71.      As concerns the objectives pursued by the requirement in point 67 of the R&R Guidelines, it is clear from point 65
thereof that burden sharing under Section 3.5.2.2 aims to reduce moral hazard by ensuring that existing investors do not escape the consequences of their past risk-taking at the expense of public funds. However, it seems clear to me – and is, moreover, expressly stated in point 11 of the R&R Guidelines (48) that point 67 is not exclusively (or even mainly) limited to addressing concerns related to moral hazard. First,
its position within the section of the guidelines devoted to proportionality, alongside own contribution, indicates that burden sharing pursues a complementary and overarching objective, namely ensuring that State aid is limited to the minimum necessary, reducing the burden on taxpayers. (49) Second, the logic underlying point 67 differs slightly from that of point 66. Rather than imposing obligations on specific categories of private shareholders or creditors of the beneficiary, point 67 regulates the terms on which State aid that enhances equity must be granted. In that sense, it appears to be more about setting an own contribution requirement than a burden-sharing requirement and to be primarily designed as an incentive to limit the amount of restructuring aid requested.(50) Thus, it cannot,
in my view, be entirely ruled out that point 67 of the R&R Guidelines, like point 62 on own contribution and unlike point 66, is also intended to apply to new investors participating in restructuring and benefiting from the future gains in value of the beneficiary, which are, at least in part, generated owing to State aid. As the Federal Republic of Germany points out, the entry of Attestor into Condor would not have been possible without the aid granted under the measure concerned. Therefore, it is reasonable to expect Condor’s future profits to be shared fairly with taxpayers.
72.      Still, the Commission and Condor have argued that extending point 67 of the R&R Guidelines to new investors could discourage private investors from participating in restructurings benefiting from State aid. Consequently, more aid, not less, would be needed to replace those lost investments, which would not be in line with the principle of proportionality. In order to avoid such a risk, it is for the Commission to strike a balance, when applying point 67 in circumstances such as those of the case at issue, between the need to afford the State a reasonable share of future gains in value of the beneficiary and the need to avoid disproportionately affecting new investors.
73.      As recital 135 of the decision at issue does not contain any analysis of that kind, I am inclined to conclude that, if the Court were to consider that the pleas put forward by the Commission and the Federal Republic of Germany in that respect are admissible, then they should be rejected on the merits.
B.      Conclusion on the second ground of appeal
74.      It follows from all the foregoing considerations that the second ground of appeal should, in my view, be dismissed.
IV.    Conclusion
75.      In the light of the foregoing considerations, I propose that the Court should dismiss the second ground of appeal.
1      Original language: English.
2      OJ 2014 C 249, p. 1; ‘the R&R Guidelines’.
3      Points 26 and 27 of the R&R Guidelines.
4      See point 52 of the R&R Guidelines.
5      See points 62 to 64 of the R&R Guidelines. Such a contribution is required from the own resources of the aid beneficiary, its shareholders or creditors or the business group to which it belongs, or from new investors, and it must be real, actual, free of aid and adequate, that is to say it must be up to at least 50% of the restructuring costs in normal circumstances.
6      Commission communication on the return to viability and the assessment of restructuring measures in the financial sector in the current crisis under the State aid rules (OJ 2009 C 195, p. 9).
7      Communication from the Commission on the application, from 1 August 2013, of State aid rules to support measures in favour of banks in the context of the financial crisis (‘Banking Communication’) (OJ 2013 C 216, p. 1).
8      According to point 66 of the R&R Guidelines,
‘adequate burden sharing will normally mean that incumbent shareholders and, where necessary, subordinated creditors must absorb losses in full. Subordinated creditors should contribute to the absorption of losses either via conversion into equity or write-down of the principal of the relevant instruments. Therefore, State intervention should only take place after losses have been fully accounted for and attributed to the existing shareholders and subordinated debt holders. …’
9      See point 65 of the R&R Guidelines.
10      See, in particular,
points 9 and 11 of the R&R Guidelines.
11      See judgment of 8 May 2024, Ryanair v Commission (Condor; restructuring aid) (T‑28/22, EU:T:2024:301, paragraphs 3 to 9) (‘the judgment under appeal’).
12      Decision C(2020) 2795 final of 26 April 2020 on State aid SA.56867 (2020/N, ex 2020/PN) – Germany – Compensation for the damage caused by the COVID‑19 outbreak to Condor.
13      T‑665/20, EU:T:2021:344.
14      Decision C(2021) 5731 final of 26 July 2021 on State aid SA.63617 (2021/N) – Germany – COVID-19 – Condor damage compensation II.
15      Decision C(2021) 5731 final of 26 July 2021 on State aid SA.63617 (2021/N) – Germany COVID-19 – Condor damage compensation II.
16      Decision C(2021) 5729 final of 26 July 2021 on State aid SA.63203 (2021/N) – Germany – Restructuring aid for Condor.
17      Condor and the Federal Republic of Germany intervened before the General Court in support of the form of order sought by the Commission.
18      After the judgment under appeal, the Commission informed the Federal Republic of Germany of its decision to initiate a formal investigation procedure on 29 July 2024, with a view to adopting a new decision on the restructuring aid to Condor; see Decision C(2024) 5322 final of 29 July 2024 on State Aid SA.63203 (2024/C) (ex 2021/N) – Germany – Restructuring aid for Condor (OJ C, C/2024/5533). A decision of re-approval has since been adopted, in April 2025; see Decision C(2025) 2294 final of 28 April 2025 on the State aid SA.63203 (2024/C) (ex 2021/N) implemented by Germany for [Condor] (OJ L, 2025/2178) (‘the new decision’). The new decision has not been challenged before the General Court.
19      See paragraphs 207 and 232 of the judgment under appeal. In paragraph 212 of that judgment, the General Court concluded that the measure concerned, which was in the form, inter alia, of a partial write-off of debt, had to be classified as ‘State aid that enhances the beneficiary’s equity position’ within the meaning of point 67 of the R&R Guidelines. Condor challenges that finding in its first ground of appeal.
20      See, inter alia, judgments of 6 October 2021, World Duty Free Group and Spain v Commission (C‑51/19 P
and
C‑64/19 P, EU:C:2021:793), and of 28 September 2023, Ryanair v Commission (C‑321/21 P, EU:C:2023:713).
21      C‑321/21 P, EU:C:2023:713, paragraph 104 et seq.
22      See, inter alia, judgment of 2 September 2021, Commission v Tempus Energy and Tempus Energy Technology (C‑57/19 P, ‘the judgment in Tempus’, EU:C:2021:663, paragraph 41).
23      See paragraph 232 of the judgment under appeal.
24      In the defence, the Commission argued, in relation to recital 126, that the burden-sharing requirement was respected because Attestor acquired Condor through a bidding process where its bid was accepted out of the three available bids as it offered the best conditions for the repayment of the public loans. In support of the Commission’s submissions before the Court, Condor argued, in its statement in intervention, that without Attestor’s offer, which reflected potential future profits in its pricing, there would have been much slimmer – if any – chances of a repayment of the Federal Republic of Germany’s previous loans. In that situation, taking all the losses and potential losses into account, the repayment of previous loans could be considered a reasonable share in future gains of Condor for the Federal Republic of Germany. According to Condor, those considerations were reflected in recital 126 of the decision at issue. While that argument was central to Condor’s statement in intervention, recital 126 of the decision at issue was referred to only once in the Commission’s defence, in footnote 165 thereto.
25      See paragraph 232 of the judgment under appeal.
26      The decision at issue, recital 19 et seq. and recital 135.
27      The decision at issue, recital 33 and recital 132 et seq.
28      According to recital 135, ‘as regards sharing the burden of the restructuring by former shareholders and subordinated creditors, it is apparent that the former controlling shareholder of Condor, TCG, is wound-up and being liquidated, whilst the shares of Condor have been transferred to a trust (recitals (12) and (19)). TCG loses all the value of its shareholding and will in no way benefit from any upside of the successful restructuring of Condor. Likewise, Condor’s creditors write
off almost all their claims in the insolvency procedure, and thus contribute to the restructuring plan. The write-off contribution exceeds the amount of the restructuring aid both in terms of partial write-off and continuation of restructured KfW loans made available to Condor. Former shareholders and creditors of Condor effectively contribute to the restructuring, thus diminishing the need for State aid and reducing moral hazard.’ As a result, the Commission concluded, in recital 136, that the aid involved appropriate burden sharing.
29      Misinterpretation of a contested act amounts to an error in law and is admissible in the context of an appeal;
see judgments of 10 March 2022, Commission v Freistaat Bayern and Others (C‑167/19 P
and
C‑171/19 P, EU:C:2022:176, paragraph 47 and the case-law cited), and of 10 September 2024, Commission v Ireland and Others (C‑465/20 P, EU:C:2024:724, paragraph 112).
30      Regulation of 13 July 2015 laying down detailed rules for the application of Article 108
[TFEU] (OJ 2015 L 248, p. 9).
31      See judgments
of 14 September 2023, Land Rheinland-Pfalz v Deutsche Lufthansa (C‑466/21 P, EU:C:2023:666,
paragraphs 50 and 51 and the case-law cited), and of 1 August 2025, France and Commission v CWS Powder Coatings and Others (C‑71/23 P
and
C‑82/23 P, EU:C:2025:601, paragraph 57).
32      See, to that effect, judgment of 14 September 2023, Land Rheinland-Pfalz v Deutsche Lufthansa (C‑466/21 P, EU:C:2023:666, paragraph 93 and the case-law cited).
33      See judgment of 9 March 2023, Les Mousquetaires and ITM Entreprises v Commission (C‑682/20 P, EU:C:2023:170, paragraph 39 and the case-law cited).
34      The Commission explicitly referred only to points 65 and 66 of the R&R Guidelines. It added, referring back to paragraphs 122 and 123 of its defence, that Ryanair had not ‘claimed (let alone shown) that the incumbent owners or subordinated creditors of Condor would have reaped undue benefits’.
35      See judgment of 14 September 2023, Land Rheinland-Pfalz v Deutsche Lufthansa (C‑466/21 P, EU:C:2023:666, paragraph 94 and the case-law cited).
36      This argument, which does not appear in the Commission’s written submissions at first instance, was presented, according to the Federal Republic of Germany’s response, at the hearing before the General Court held on 22 September 2023.
37      The concept of ‘doubts’ appears in Article 4(3) and (4) of Regulation 2015/1589 and indicates the existence of serious difficulties encountered by the Commission in its examination of the measure concerned.
38      See, inter alia, judgment of 19 July 2016, Kotnik and Others (C‑526/14, EU:C:2016:570, paragraph 37).
39      That review is confined to establishing that the rules of procedure and the rules relating to the duty to give reasons have been complied with, and to verifying the accuracy of the facts relied on, and that there has been no error of law, manifest error in the assessment of the facts or misuse of powers. See judgment of 4 October 2024, E. Breuninger v Commission (C‑124/23 P, EU:C:2024:860, paragraph 30).
40      See, inter alia, judgment of 2 April 2009, Bouygues and Bouygues Télécom v Commission (C‑431/07 P, EU:C:2009:223, paragraph 63).
41      See, inter alia, the judgment in Tempus, paragraph 41.
42      It is well known that, in the exercise of its discretion under Article 107(3) TFEU, the Commission may adopt soft law instruments in order to clarify, while necessarily complying with higher-ranking legal provisions (whether that be primary and/or secondary EU law), the criteria which it proposes to apply in assessing the compatibility of national measures with the internal market under State aid rules. Guidelines constitute a self-imposed limitation to the discretion enjoyed by the Commission. The latter cannot, as a general rule, depart from those guidelines, at the risk of being found to be in breach of general principles of law, such as equal treatment or the protection of legitimate expectations (see judgment of 19 July 2016, Kotnik and Others, C‑526/14, EU:C:2016:570, paragraphs 39, 40 and 43). If guidelines are not capable of imposing independent obligations on the Member States, their provisions may become binding by virtue of a Commission decision applying them (see, to that effect, judgment of 12 October 2023, Est Wind Power,
C‑11/22, EU:C:2023:765, paragraphs 30 to 38, and Opinion of Advocate General Rantos in Est Wind Power,
C‑11/22, EU:C:2023:241, points 28 to 32).
43      See, ex multis, judgments of 17 November 1983, Merck (292/82, EU:C:1983:335, paragraph 12); of 7 March 2018,
SNCF Mobilités v Commission (C‑127/16 P, EU:C:2018:165, paragraph 29); and of 12 October 2023, Est Wind Power (C‑11/22, EU:C:2023:765, paragraph 46).
44      See, to that effect, judgments of 7 March 2018, SNCF Mobilités v Commission (C‑127/16 P, EU:C:2018:165, paragraph 29 et seq.), and of 17 December 2015, SNCF v Commission (T‑242/12, EU:T:2015:1003, paragraph 88 et seq.).
45      See, to that effect, judgment of 12 October 2023, Est Wind Power (C‑11/22, EU:C:2023:765, paragraph 46 et seq.).
46      See, inter alia, judgments of 22 September 1988, Land de Sarre and Others (187/87, EU:C:1988:439, paragraph 19); of 10 September 2014, Holger Forstmann Transporte (C‑152/13, EU:C:2014:2184, paragraph 26 and the case-law cited); and of 15 June 2000, Commission v Germany (C‑348/97, EU:C:2000:317, paragraph 53).
47      As correctly observed by the General Court in paragraph 223 of the judgment under appeal.
48      According to point 11 of the R&R Guidelines, ‘the notion of burden sharing has been introduced, inter alia, to better address the issue of moral hazard’.
49      See, by analogy, judgment of 19 July 2016, Kotnik and Others (C‑526/14, EU:C:2016:570, paragraphs 55 to 58).
50      See,
to that effect,
Soltész, U. and Maier-Rigaud, F., ‘Rescue and restructuring aid’, in Werner, P. and Verouden, V. (eds),
EU State Aid Control: Law and Economics, 2025, pp. 553 and 554.