Order of the Court of First Instance (Second Chamber, extended composition) of 25 July 2000. - RJB Mining plc v Commission of the European Communities. - ECSC Treaty - State aid - Operating aid - Conditions for authorisation - Obligation to state reasons - Further steps in proceedings after interlocutory judgment - Application manifestly lacking any foundation in law. - Case T-110/98.



European Court reports 2000 Page II-02971



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

1. Procedure - Introduction of new pleas in law in the course of the proceedings - Conditions - Amplification of an existing plea - Limits

(Rules of Procedure of the Court of First Instance, Art. 48(2), first subpara.)

2. Acts of the institutions - Statement of reasons - Obligation - Scope - ECSC decision

(ECSC Treaty, Art. 15, first para.)

3. Procedure - Introduction of new pleas in law in the course of the proceedings - Inadequate statement of reasons - Plea which may be put forward at any stage in the proceedings

Summary

1. A plea in law which may be regarded as amplifying a plea previously put forward, directly or by implication, in the application initiating proceedings, and is closely connected with that plea is admissible. On the other hand, no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure, as the first subparagraph of Article 48(2) of the Rules of Procedure provides. In this respect, the fact that a plea is based on certain matters referred to in support of another plea is not sufficient for it to be regarded as amplifying that plea. Finally, a judgment which has merely confirmed the law which was known to the applicant, in principle, when it brought its action cannot be regarded as a new matter enabling the introduction of a new plea in law.

( see paras 24, 34, 36 )

2. The first paragraph of Article 15 of the ECSC Treaty provides that the decisions of the Commission are to state the reasons on which they are based. The statement of reasons must disclose in a clear and unequivocal fashion the reasoning 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 so as to defend their rights and to enable the Community judicature to carry out its review. It is not necessary for the reasoning to go into all the relevant facts and points of law, however, inasmuch as it 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 para. 44 )

3. Pleas alleging that a statement of reasons is lacking or inadequate constitute a matter of public interest and may be put forward by the parties at any stage in the proceedings. The applicant cannot therefore be barred from criticising an inadequate statement of reasons solely on the ground that it did not rely on that argument in its application.

( see para. 46 )

Parties

In Case T-110/98,

RJB Mining plc, with its registered office at Harworth, United Kingdom, represented by M. Brealey, Barrister, and J. Lawrence, Solicitor, with an address for service in Luxembourg at the Chambers of Arendt and Medernach, 8-10 Rue Mathias Hardt,

applicant,

v

Commission of the European Communities, initially represented by P.F. Nemitz, and subsequently by K.-D. Borchardt, of its Legal Service, acting as Agents, assisted by N. Khan, Barrister, with an address for service in Luxembourg at the office of C. Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,

defendant,

supported by

Federal Republic of Germany, represented by C.-D. Quassowski, Regierungsdirektor, of the Federal Ministry of Finance, acting as Agent, assisted by M. Schütte, Rechtsanwalt, Berlin, 108 Graurheindorfer Straße, Bonn, Germany,

Kingdom of Spain, represented by R. Silva de Lapuerta, Abogado del Estado, acting as Agent, with an address for service in Luxembourg at the Spanish Embassy, 4-6 Boulevard Emmanuel Servais,

and

RAG Aktiengesellschaft, established in Essen, Germany, represented by M. Hansen, of the Copenhagen Bar, and S.B. Völcker, Rechtsanwalt, Berlin, with an address for service in Luxembourg at the Chambers of Loesch and Wolter, 11 Rue Goethe,

interveners,

APPLICATION for annulment of Commission Decision 98/687/ECSC of 10 June 1998 on German aid to the coal industry for 1997 (OJ 1998 L 324, p. 30),

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Second Chamber, Extended Composition),

composed of: J. Pirrung, President, J. Azizi, A. Potocki, M. Jaeger and A.W.H. Meij, Judges,

Registrar: H. Jung,

makes the following

Order

Grounds

1 This order is made following the interlocutory judgment of the Court of First Instance (First Chamber, Extended Composition) of 9 September 1999 in Case T-110/98 RJB Mining v Commission [1999] ECR II-0000 (the interlocutory judgment).

Factual background to the dispute and earlier procedure

2 The factual background to the dispute, the course of the earlier stages of the procedure and the legal background, in particular Commission Decision No 3632/93/ECSC of 28 December 1993 establishing Community rules for State aid to the coal industry (OJ 1993 L 329, p. 12; hereinafter the Code), are set out in the interlocutory judgment, to which reference is made.

3 By its application, the applicant seeks the annulment of Commission Decision 98/687/ECSC of 10 June 1998 on German aid to the coal industry for 1997 (OJ 1998 L 324, p. 30; hereinafter the contested decision).

4 In support of its action, the applicant raised, in its application, four pleas in law. By the first, it alleged that the Commission lacked competence to give retroactive approval to the German aid already paid. The second plea alleged a lack of reasoning, in that the contested decision did not set out either the reasons for the approval of that aid under Articles 3 and 4 of the Code or the reasons for rejecting the complaint lodged by the applicant. By the third plea, alleging breach of the principle of good administration, the applicant criticised the Commission for failing to give proper consideration to the abovementioned complaint and for failing to provide it with a copy of the contested decision. The fourth plea alleged a manifest error of assessment, in that the Commission approved the payment of operating aid under Article 3 of the Code although the recipient undertakings were incapable of becoming viable within the foreseeable future.

5 By the interlocutory judgment, the Court of First Instance:

1. Declares that the plea based on breach of the alleged prohibition on giving ex post facto approval to aid paid without prior approval is unfounded;

2. Declares that the plea of infringement of Article 3 of Commission Decision No 3632/93/ECSC of 28 December 1993 establishing Community rules for State aid to the coal industry is unfounded;

3. Dismisses the application in so far as it is based on those two pleas ...

6 By order of 25 October 1999 in Case T-110/98 RJB Mining v Commission (not published in the ECR), the Court of First Instance (First Chamber, Extended Composition) dismissed the applicant's application for rectification and/or interpretation of the interlocutory judgment.

7 By document lodged at the Registry of the Court of Justice on 8 November 1999, the applicant brought an appeal against the interlocutory judgment. It requests the Court of Justice to set aside paragraphs 1 and 3 of the operative part of that judgment and to annul the contested decision.

8 Since the composition of the Chambers of the Court of First Instance was modified as from the start of the new judicial year, the Judge-Rapporteur has been assigned to the Second Chamber, Extended Composition, to which this case has, as a consequence, been assigned.

9 In response to a request to explain to what extent it intended to proceed with its application before the Court of First Instance following the interlocutory judgment, the applicant stated, by document of 1 March 2000, that it was withdrawing the second plea in so far as it was based on breach of the duty to state reasons in respect of the approval of the contested aid under Article 4 of the Code and the rejection of its complaint, and also the third plea alleging breach of the principle of good administration. The Court of First Instance takes formal note of that partial withdrawal.

10 The applicant has, on the other hand, made it clear that it is pursuing its application before the Court of First Instance by relying, first, on the fourth plea, alleging infringement of Article 3 of the Code in that the Commission failed to assess whether a significant reduction in production costs would follow from the grant of the contested aid, thereby making it possible to achieve a degression of that aid, or committed a manifest error of assessment in approving aid where the reduction in those costs was not significant, and, second, on the second plea alleging breach of the duty to state reasons in respect of the approval of that aid under the same article.

11 By documents of 27 March, 5 April, 9 and 10 May 2000, respectively, the Kingdom of Spain, the Commission, RAG Aktiengesellschaft (RAG) and the Federal Republic of Germany expressed their views on the applicant's document of 1 March 2000.

Forms of order sought by the parties

12 The applicant claims that the Court should:

- annul the contested decision;

- order the Commission to pay the costs.

13 The Commission contends that the Court should:

- dismiss the application;

- order the applicant to pay the costs.

14 The Federal Republic of Germany, the Kingdom of Spain and RAG submit that the Court should dismiss the application in its entirety.

Substance

15 Pursuant to Article 111 of the Rules of Procedure of the Court of First Instance, where an action is manifestly lacking any foundation in law, the Court of First Instance may, by reasoned order, without taking further steps in the proceedings, give a decision on the action.

16 In this case, the Court considers that it has sufficient information from the documents before it and decides, under that article, not to take further steps in the proceedings.

17 As regards the pleas in law on the basis of which the applicant states that it intends to pursue its application before the Court, it is necessary to examine, first, and to the extent that it was not rejected by the interlocutory judgment, the plea of infringement, by the Commission, of Article 3 of the Code.

The plea of infringement of Article 3 of the Code

Arguments of the parties

18 The applicant submits that the Court of First Instance, in the interlocutory judgment, did indeed reject its argument concerning the viability of the undertakings in receipt of operating aid, but did not rule on the argument raised in paragraph 4.5.7 of the application according to which the terms of Article 3 of the Code preclude the authorisation of such aid to undertakings which merely have a prospect of reducing production costs. The applicant states, moreover, that the Court found, in paragraphs 111 and 115 of that judgment, that a significant reduction in production costs was required to satisfy the test under Article 3 of the Code. The fact that the Commission failed to assess the scale of the reduction in production costs achieved by the relevant undertakings was an error rendering the contested decision unlawful, since the Commission failed to address an essential element of the test required by the Code.

19 Furthermore, the reasoning in the contested decision is based exclusively on average production figures for the industry as a whole, without its being possible to determine whether those figures relate to particular undertakings or mines and, if so, which. In addition, the reduction in production costs to which the contested decision refers (15% between 1992 and 1996) cannot in any way be regarded as significant.

20 The Commission also failed to assess whether the test set out in paragraph 107 of the interlocutory judgment was satisfied, namely whether the undertakings which were receiving aid and which, over a given year, must have failed to reduce their production costs, were effecting reductions that were commensurably more sustained in subsequent years. In addition, by referring to a reduction in production costs of the order of 15% net of inflation between 1992 and 1996, the Commission worked from inflation-adjusted prices although the second subparagraph of Article 3(2) of the Code states that that reduction must be shown by reference to 1992 prices.

21 The applicant adds that, on page 4 of the contested decision, the Commission took into account an irrelevant consideration, namely an alleged need to mitigate the social and regional consequences of the restructuring of the German coal industry, whereas, in the interlocutory judgment, the Court confirmed, in paragraph 109, that operating aid could not be justified on that basis.

22 The Commission and the parties which have intervened in support of the form of order which it seeks contend that the argument set out in paragraph 4.5.7 of the application, far from constituting a separate plea on the significance of the reduction in production costs, forms part of the single plea that the undertakings in receipt of operating aid did not have a prospect of achieving viability. That plea has already been rejected by the interlocutory judgment and that judgment has, on that point, acquired the force of res judicata. In any event, the arguments raised in the applicant's document of 1 March 2000 should be declared inadmissible under Article 48(2) of the Rules of Procedure. In the alternative, they should be rejected as unfounded.

Findings of the Court

23 Under the first paragraph of Article 22 of the ECSC Statute of the Court of Justice, applicable to the Court of First Instance under the first paragraph of Article 46 of the same Statute, read in conjunction with Article 44(1)(c) of the Rules of Procedure of the Court of First Instance, all applications initiating proceedings must contain, in particular, a brief statement of the pleas in law on which the application is based. That statement must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to give a ruling, if appropriate without other information in support (see, most recently, the order in Case C-418/98 P De Persio v Commission and Council [2000] ECR I-0000, paragraph 32). In order to guarantee legal certainty and the sound administration of justice, if a plea is to be admissible under the aforementioned provisions, the essential matters of law and of fact on which the plea is based must be indicated coherently and intelligibly in the application itself (see the judgment in Case T-251/97 T. Port v Commission [2000] ECR II-0000, paragraphs 90 to 92; and, in respect of the admissibility of an application, the order in Case T-85/92 De Hoe v Commission [1993] ECR II-523, paragraph 20; and the order of 9 March 1999 in Case T-206/98 Clauni and Others v Commission (not published in the ECR), paragraph 14, confirmed on appeal by the order in Case C-171/99 P Clauni and Others v Commission [2000] ECR I-0000, paragraph 20).

24 A plea in law which may be regarded as amplifying a plea previously put forward, directly or by implication, in the application initiating proceedings, and is closely connected with that plea is admissible (Case T-212/97 Hubert v Commission [1999] ECR-SC I-A-41 and II-185, paragraph 87, and the case-law there cited). On the other hand, no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure, as the first subparagraph of Article 48(2) of the Rules of Procedure provides.

25 In this case, it should be noted, first, that the summary of the plea in question, which appears in paragraph 4.1.3 (p. 44) of the application, states as follows:

the production units which have received, or are to receive, the operating aid purportedly approved pursuant to Article 3 of the Code are incapable within the foreseeable future of becoming viable. Accordingly, the Commission has made a manifest error in approving aid to these production units pursuant to Article 3.

26 As to the detailed development of that plea, it must be observed, second, that the applicant explains the concept of viability in paragraphs 3.2.14 to 3.2.16 of the application and then, in paragraphs 4.5.3 to 4.5.6 thereof, sets out its argument on manifest error to the effect that the Commission must have concluded that the undertakings in receipt of the operating aid in question had a reasonable prospect of achieving viability, within the foreseeable future.

27 Following those explanations, paragraph 4.5.7 of the application states as follows:

The applicant further submits that the terms of Article 3 of the Code preclude the grant of operating aid to undertakings or production units merely on the basis that those undertakings have a prospect of reducing production costs. The terms of Article 3(2), namely "designated to improve the economic viability of the undertakings", indicate that the objective is to produce undertakings that may become viable as a result of reduced production costs. Where there is no prospect of viability, there can be no operating aid approval.

28 Finally, paragraph 4.5.8 of the application refers to an expert's report (Annex 4 to the application) which is based on the premiss that the Commission may authorise operating aid only after assessing whether the recipient undertaking has a reasonable prospect of achieving viability within the foreseeable future (paragraphs 2, 3, 4 and 17 of that report).

29 A reading of the abovementioned passages reveals that the only argument raised in support of the plea in question which satisfies the criteria of clarity and precision referred to in paragraph 23 above is that which relates to the lack of a prospect of viability on the part of the undertakings in receipt of the contested aid. It is that plea of infringement by the Commission of Article 3 of the Code on the ground that it authorised the grant of operating aid without assessing whether the recipient undertakings had a reasonable prospect of achieving viability within the foreseeable future, as set out in the application and summarised in paragraph 30, second indent, and in paragraphs 84 to 94 of the interlocutory judgment, which was declared unfounded by paragraph 2 of the operative part of that judgment.

30 The sentence in paragraph 4.5.7 of the application which states that a mere reduction in production costs is not sufficient to justify the authorisation of operating aid cannot be interpreted, in the light of its context, as constituting an argument which is distinct and separate from that relating to the lack of a prospect of viability. The criticism levelled in that sentence at the test of a mere reduction in production costs serves only to illustrate the allegedly essential nature of an assessment of the recipient undertaking's chance of achieving viability. The sentence relied on by the applicant does not, therefore, bring any independent element to the plea in question, based on the lack of a prospect of viability, which would have enabled the Commission or the Court to understand that the applicant intended to challenge the Commission's application of the test of a reduction in production costs.

31 Contrary to the applicant's claim, the content of paragraph 4.5.7 of its application does not therefore constitute an argument which is separate from that rejected in paragraph 97 et seq. of the interlocutory judgment. The applicant cannot therefore submit that it remains for the Court to rule on an alleged argument put forward in paragraph 4.5.7 of the application.

32 In that context, it should be recalled again that paragraphs 29 to 36 of the Report for the Hearing, which was communicated to the parties during the procedure which led to the interlocutory judgment, summarised as a single plea of infringement of Article 3 of the Code the argument by which the applicant criticised the Commission for failing to examine whether the undertakings in receipt of operating aid had reasonable chances of achieving economic viability within the foreseeable future. That summary of that plea also included, in paragraph 31 of the Report for the Hearing, the contested sentence, taken from paragraph 4.5.7 of the application. The applicant, requested by letter from the Registrar of 10 December 1998 to comment on the Report for the Hearing, did not object, in its written observations of 11 December 1998, to that presentation of the plea and of the sentence in question (on that point, see also the order in RJB Mining, cited in paragraph 6 above, paragraph 14). It is reasonable to infer that the applicant had itself considered, before the delivery of the interlocutory judgment, that that sentence formed an integral part of the plea in question, based on the lack of a prospect of viability.

33 Consequently, the arguments raised by the applicant in its document of 1 March 2000, that the Commission also infringed Article 3 of the Code in that, first, it incorrectly applied the test of a reduction in production costs - as regards the significance of that reduction, and the figures and reference period taken into consideration - and, second, it gave an irrelevant reason, relating to an alleged need to mitigate the social and regional consequences of the restructuring of the German coal industry, constitute pleas which were not relied on either directly or by implication in the application.

34 Nor are they closely connected with the plea based on the lack of a prospect of viability on the part of the undertakings in receipt of the contested aid. Therefore, they cannot be regarded as amplifying that plea. In this respect, the fact that a plea is based on certain matters referred to in support of another plea, such as in this case the reference to the first sentence of paragraph 4.5.7 of the application, is not sufficient for it to be regarded as amplifying that plea (Hubert v Commission, cited in paragraph 24 above, paragraph 88).

35 It follows from the foregoing that those pleas are to be characterised as new pleas in law within the meaning of the first subparagraph of Article 48(2) of the Rules of Procedure. Consequently, they must, in principle, be declared inadmissible under that provision.

36 In so far as the applicant relies on the interlocutory judgment as a new fact in support of the admissibility of its new pleas in law, the Court considers that that judgment, in rejecting the plea of infringement of Article 3 of the Code, gave only an interpretation of that article, which did not modify the law as it stood when the application was lodged. It is clear from the case-law that a judgment which has merely confirmed the law which was known to the applicant, in principle, when it brought its action cannot be regarded as a new matter enabling the introduction of a new plea in law (Case 11/81 Dürbeck v Commission [1982] ECR 1251, paragraph 17; and, by analogy, Case C-279/89 Commission v United Kingdom [1992] ECR I-5785, paragraph 17; Case T-106/95 FFSA and Others v Commission [1997] ECR II-229, paragraph 57; and Case T-455/93 Hedley Lomas and Others v Commission [1997] ECR II-1095, paragraph 32).

37 In this case, it is clear that nothing prevented the applicant from raising in its application the pleas based on infringement of Article 3 of the Code, incorrect application of the test of a reduction in production costs and the taking into consideration of an irrelevant reason.

38 Accordingly, the applicant cannot be authorised to raise them for the first time in its document of 1 March 2000.

39 It follows that the new pleas in law must be rejected as manifestly inadmissible.

40 In so far as the applicant again submits that, in paragraphs 108, 109, 111 and 115 of the interlocutory judgment, the Court ruled on the test forming the subject-matter of the new pleas in law, it must be noted that those paragraphs form part of the reasoning of that judgment, which merely decided questions of law (order in RJB Mining, cited in paragraph 6 above, paragraph 17; and the interlocutory judgment, paragraph 30). Consequently, those paragraphs do not relate either to the assessment, in the contested decision, of the facts of this dispute, or to any specific argument relating to that assessment which may have been raised during the procedure preceding the interlocutory judgment. The abovementioned paragraphs are thus irrelevant to the admissibility of the present new pleas in law.

The plea of breach of the duty to state reasons in respect of the conditions for authorisation laid down in Article 3 of the Code

Arguments of the parties

41 In its application, the applicant submits that the contested decision does not contain any explanation of how the Commission reached a conclusion that the operating aid, in the amount of more than 6 thousand million German marks (DEM), satisfied the conditions in Article 3 of the Code. In particular, the decision does not consider the prospect of viability of any of the recipient undertakings or reach any conclusion that any or all of the undertakings concerned could achieve viability within the reasonably foreseeable future having regard to current world market conditions. As regards the reduction in production costs, the contested decision does not give any information such as to enable the applicant or the Court to understand the basis of the Commission's analysis.

42 In its document of 1 March 2000, the applicant adds that the contested decision does not contain any reasoning as to whether and why the reduction actually achieved in the production costs of the recipient undertakings was significant within the meaning of paragraphs 111 and 115 of the interlocutory judgment. Nor is it possible, by reading the contested decision, to know whether that reduction relates to individual mines or undertakings or whether it has been on a sustained basis. No assessment of that reduction is given in respect of each undertaking, since the Commission took account only of average reductions. The applicant criticises the Commission, in addition, for failing to provide any explanation concerning the fact that the comparison between the 1992 figures and the 1996 figures was made, in the contested decision, at constant prices, that is to say inflation-adjusted prices. Finally, the contested decision does not contain any indication about meeting the requirement as to degression of aid.

43 According to the Commission and the parties which have intervened in support of the form of order which it seeks, the arguments put forward in the applicant's document of 1 March 2000, alleging inadequate reasoning, must be declared inadmissible under Article 48(2) of the Rules of Procedure. Furthermore, they constitute, in reality, substantive arguments alleging infringement of Article 3 of the Code, the rejection of which by the interlocutory judgment is no longer open to challenge. The applicant cannot escape the consequences of that rejection by presenting the same arguments in support of another plea in law. In any event, the contested decision is based on a sufficient statement of reasons.

Findings of the Court

44 The first paragraph of Article 15 of the ECSC Treaty provides that the decisions of the Commission are to state the reasons on which they are based. According to settled case-law, the statement of reasons must disclose in a clear and unequivocal fashion the reasoning 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 so as to defend their rights and to enable the Community judicature to carry out its review. It is not necessary for the reasoning to go into all the relevant facts and points of law, however, inasmuch as it 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 (Joined Cases 172/83 and 226/83 Hoogovens Groep v Commission [1985] ECR 2831, paragraph 24; Case T-243/94 British Steel v Commission [1997] ECR II-1887, paragraphs 159 and 160; and Case T-37/97 Forges de Clabecq v Commission [1999] ECR II-859, paragraph 108).

45 In this case, it should be recalled that the plea of infringement of Article 3 of the Code, based on the lack of a prospect of viability on the part of the undertakings in receipt of the contested aid, was rejected by the interlocutory judgment on the ground, in particular, that that article does not require that the undertaking in receipt of operating aid achieve viability by the end of a fixed period (paragraph 100 of the judgment). Therefore, the Commission was not required to insert into the text of the contested decision any statement of reasons on the application to the case in question of such a test.

46 As regards the arguments raised for the first time in the applicant's document of 1 March 2000, it is settled case-law that pleas alleging that a statement of reasons is lacking or inadequate constitute a matter of public interest and may be put forward by the parties at any stage in the proceedings (Case C-166/95 P Commission v Daffix [1997] ECR I-983, paragraphs 23 to 25; Case T-534/93 Grynberg and Hall v Commission [1994] ECR-SC I-A-183 and II-595, paragraph 59; Case T-4/96 S v Court of Justice [1997] ECR II-1125, paragraphs 52 and 53; and Case T-129/98 Sabbioni v Commission [1999] ECR-SC I-A-0000 and II-0000, paragraph 25). The applicant cannot therefore be barred from criticising an inadequate statement of reasons solely on the ground that it did not rely on that argument in its application.

47 However, the arguments raised in respect of the parameters referred to in paragraph 42 above - namely the significance of the reduction in production costs, the size of the reduction per undertaking and not as an average, the comparison at constant prices and the possibility of degression of aid - in fact merely repeat, from the angle of an inadequate statement of reasons, the arguments put forward in support of the substantive pleas rejected above as inadmissible. The arguments in question do not therefore concern the existence in the contested decision of an adequate statement of reasons but the accuracy of that statement (see, to that effect, Forges de Clabecq v Commission, cited in paragraph 44 above, paragraph 109), as is clear, in particular, from paragraphs 4.23 and 4.24 and footnote 26 of the document of 1 March 2000.

48 In any event, the Commission provided a series of indications in the contested decision (point III of the preamble thereto). Thus, it found that costs fell by 15%, at constant prices, between 1992 and 1996, and it noted a significant difference between average production costs (DEM 269 in 1996) and world market prices (DEM 80), while pointing out that that difference might be reduced over the next few years as production was concentrated on the most productive pits. It found, in addition, that the cost reduction recorded exceeded the cost reduction notified by the Federal Republic of Germany in the framework of the modernisation, restructuring and rationalisation plan of 1994 and considered that the principle of degression of aid which that State had adopted following the approval of that plan would help to boost that trend. Finally, the Commission declared that, in its assessment of the operating aid, it had taken account of the need to mitigate the social and regional impact.

49 Those indications enabled the applicant to make a complaint in good time about an erroneous application by the Commission of the test of a reduction in production costs and to put forward the arguments relating to the significance of that reduction, to its assessment in respect of each undertaking at constant prices and, finally, to the degression of aid.

50 Consequently, the plea of breach of the duty to state reasons can manifestly not be upheld.

51 It follows from all the foregoing that the application, in so far as it was not disposed of by the interlocutory judgment, must be dismissed as manifestly lacking any foundation in law, in that it is based on the pleas examined above.

Decision on costs

Costs

52 Under Article 87(2) of the Rules of Procedure of the Court of First Instance, the unsuccessful party is to be ordered to pay the costs, if they have been applied for in the successful party's pleadings. Since the applicant has been unsuccessful, it must be ordered to bear its own costs and pay those of the Commission, in accordance with the form of order sought by the Commission, including the costs relating to the interlocutory proceedings and the interlocutory judgment.

53 Under Article 87(4) of the Rules of Procedure, the Federal Republic of Germany and the Kingdom of Spain must bear their own costs. The same is true for the intervener, RAG, since it did not apply for costs.

Operative part

On those grounds,

THE COURT OF FIRST INSTANCE (Second Chamber, Extended Composition)

hereby orders:

1. The application is dismissed as manifestly lacking any foundation in law, in so far as it is based on pleas in law which were not rejected by the interlocutory judgment of 9 September 1999 in this case.

2. The applicant shall bear its own costs and pay those of the Commission, including those relating to the interlocutory proceedings in Case T-110/98 R and the interlocutory judgment.

3. The Federal Republic of Germany, the Kingdom of Spain and RAG Aktiengesellschaft shall bear their own costs.