17. 5. 90 Official Journal of the European Communities NoC 121/9 
STATE AID 
N 336/89 
(Federal Republic of Germany) 
(Articles 92 to 94 of the Treaty establishing the European Economic Community) 
(90/C 121/04) 
Commission communication pursuant to Article 93 (2) of 
the EEC Treaty to other Member States and interested 
parties concerning aids which the German Government 
has decided to grant to horticultural enterprises in water 
catchment areas (Land: Baden-Wiirttemberg) 
By letter of 16 November 1989, registered on 21 
November 1989, the German Permanent Representation 
to the European Communities notified this aid to the 
Commission under Article 93 (3) of the Treaty. 
Additional information was transmitted by letter of 5 
February 1990, registered on 8 February 1990. 
According to the information transmitted by the German 
authorities, the number of beneficiaries of the measure 
mentioned above will be increased. In addition to the 
measures already carried out, an investment aid of up to 
60 % for investments in greenhouses which are carried 
out to avoid the influx of liquid into the water-table will 
be granted to horticultural enterprises located within 
water catchment areas. 
It is the view of the Commission that this measure 
concerning investment in greenhouses represents a state 
aid in the sense of Article 92 (1) of the Treaty, while 
none of the derogations provided for in Article 92 can be 
applied to it. Consequently, the measure has to be 
regarded as incompatible with the Treaty in the form in 
which it has been notified. 
The Commission accepted an earlier version of the 
measure, which provided for an investment aid of 35 % 
for investments for environmental purposes on agri­
cultural holdings. Moreover, the Commission had 
accepted an aid rate of up to 60 % for investments on 
agricultural holdings within water catchment areas. This 
higher aid rate was only accepted, however, because it 
was granted subject to the condition that the density of 
livestock on the holdings concerned would not be higher 
than the equivalent of 1,5 units of manure per hectare 
(cf. Commission's letter SG(88) D/13772 of 25 
November 1988). 
With regard to the measure under consideration, no 
comparable limits or other measures to reduce the 
intensity of agricultural production exist. Consequently, 
it is the view of the Commission that the aid rate of up 
to 60 % is not justified and that it would raise important 
questions of principle in connection with the 'polluter 
pays' principle. As a result, the Commission has decided to initiate the 
procedure provided for in Article 93 (2) of the Treaty 
with regard to the aid for investment in horticultural 
enterprises and requests the German Government to 
reduce the maximum aid rate for this measure to 35 %. 
Moreover, the Commission hereby gives notice to the 
German Government to submit its comments within four 
weeks of receipt of this letter. 
The Commission informs the German Government that 
it will request the other Member States and other parties 
concerned to submit their comments by publishing a 
copy of this letter in the Official Journal of the European 
Communities. 
The Commission points out to the German Government 
that the measure under consideration may only be 
carried out after the procedure provided for in Article 93 
(2) of the Treaty has led to a final decision. 
Moreover, the Commission reminds the German 
Government of the Commission's letter to the Member 
States of 3 November 1983 concerning Member States' 
obligations resulting from Article 93 (3) of the Treaty, 
and of the communication of the Commission published 
in the Official Journal of the European Communities No 
C 318 of 24 November 1983 (p. 3), which said that 
illegal aids, i.e. aids which have been granted without 
waiting for a final decision under the procedure provided 
for in Article 93 (2), may cause the Commission to 
require Member States to recover the aid from recipients 
and/or to refuse to make EAGGF advance payments or 
to charge expenditure relating to national measures that 
directly affect Community measures to the EAGGF 
budget. 
The Commission hereby gives the other Member States 
and interested parties notice to submit their comments on 
the measures in question within four weeks from the 
date of publication of this communication to: 
Commission of the European Communities, 
200 Rue de la Loi, 
B-1049 Brussels. 
The comments will be communicated to the German 
Government.