Keywords

Summary



Keywords

1. Actions for annulment – Actions of the Member States – Action against a Commission decision finding aid to be incompatible with the common market – Admissibility not conditional upon establishing a legal interest in bringing proceedings

2. Actions for annulment – Natural or legal persons – Interest in bringing proceedings – Commission decision finding aid to be incompatible with the common market

3. State aid – Definition – Public statements by a member of the government of a Member State manifesting the latter’s willingness to take appropriate steps to resolve the financial difficulties of an undertaking – Advantage granted without transferring public resources – Not included – Proposal to grant a credit line to an undertaking

(Art. 87(1) EC)

4. State aid – Definition – Grant of an advantage by a State through State resources – Public statements by a member of the government of a Member State manifesting the latter’s willingness to take appropriate steps to resolve the financial difficulties of an undertaking – Advantage granted without transferring public resources – Not included

(Art. 87(1) EC)

5. State aid – Commission decision – Judicial review

6. Acts of the institutions – Statement of reasons – Obligation – Scope

(Art. 253 EC)

Summary

1. The EC Treaty draws a clear distinction between the right of Community institutions and Member States to bring an action for annulment and that of legal persons and individuals, in that all Member States are given the right to contest the legality of decisions of the Commission by means of an action for annulment, without having to establish any legal interest in bringing proceedings. A Member State need not therefore prove that an act of the Commission which it is contesting produces legal effects with regard to that Member State in order for its action to be admissible. A legal interest in bringing proceedings covers only actions brought by natural or legal persons and not those brought by institutions or Member States.

Furthermore, the concept of a legal interest in bringing proceedings must not be confused with the concept of a challengeable act, pursuant to which an act must be intended to produce legal effects capable of adversely affecting the interests of those concerned in order for it to be capable of being the subject of an action for annulment, which must be ascertained by looking to its substance.

A decision of the Commission finding that State aid is incompatible with the common market produces such binding legal effects and therefore constitutes an act open to challenge by a Member State.

(see paras 118-119)

2. An action for annulment brought by a natural or legal person is not admissible unless the applicant establishes a vested and present interest in seeing the contested measure annulled. Such an interest presupposes that the annulment of the measure must of itself be capable of having legal consequences or, to use a different form of words, the action must be liable, if successful, to procure an advantage for the party who has brought it. Consequently, a measure which gives full satisfaction to that person is not, by definition, capable of adversely affecting him and such a person has no interest in seeking its annulment.

However, as regards a Commission decision finding that State aid is incompatible with the common market, a competitor undertaking of the beneficiary of aid establishes a vested and present interest in seeing that decision annulled, when it claims that the Member State adopted further aid measures involving separate advantages for the beneficiary undertaking and further damaging the competitor undertaking’s market position.

The existence of aid and of its incompatibility with the common market does not preclude a priori the existence of other incompatible aid measures which, although not referred to in the Commission’s decision, are also covered by the administrative procedure culminating in the adoption of that decision and which, moreover, are capable of substantially affecting the market position of certain competitors of the beneficiary of the aid.

In addition, when an applicant claims that the contested measure, even though it may be partially favourable to him, none the less does not adequately protect his legal situation, it must be recognised that he has an interest in bringing proceedings to have the legality of that decision verified by the Court.

(see paras 116, 127-128, 130-131)

3. In order for a measure to be characterised as State aid within the meaning of Article 87(1) EC, it must, firstly, involve an advantage, which may take various forms (‘in any form whatsoever’), and, secondly, that advantage must derive, directly or indirectly, from public resources (granted ‘by a Member State or through State resources’). The concept of advantage implies that the State measure must have the consequence of an improvement in the economic and/or financial position, or even an enrichment of the beneficiary by, for example, mitigating the charges which are normally included in its budget.

As regards the impact of public statements by a member of the government of a Member State manifesting the latter’s willingness to take appropriate steps to resolve the financial difficulties of an undertaking, it must be held that those statements may result in an appreciable advantage for that undertaking, inasmuch as they enable the financial markets to regain confidence, make it possible, easier and cheaper for the undertaking to gain access to new loans necessary in order to refinance its short-term debts and, in the end, help to stabilise its very fragile financial situation. Those statements may decisively influence the reaction of the rating agencies and thus contribute to the improvement of the undertaking’s image in the eyes of investors and creditors and prove decisive for the conduct of the financial market operators which subsequently participate in the refinancing of the undertaking in question.

Moreover, under the principles governing the granting of loans and refinancing on the capital markets, a company’s rating and, therefore, the risk of default associated with the loans granted to it, is decisive for the purpose of measuring the cost of refinancing which that company must bear, in particular, in terms of interest payable on the issue of new bonds. It follows that the lower that risk of default, the easier and cheaper it is to refinance the loans in question on the capital markets. In other words, any positive influence on a company’s rating, if only as a result of public declarations which are likely to create or strengthen investor confidence, produces an immediate impact on the level of costs which the company must incur in order to refinance itself on the capital markets.

In addition, in order to categorise a measure as State aid, the Commission is required to establish on the basis of objective factors that all the cumulative conditions of the concept of aid within the meaning of Article 87(1) EC, including the existence of an advantage, are satisfied, taking account of the economic effects of the measure in question.

The Commission cannot presume, solely on the basis of a unilateral offer by the State to grant a credit line of a certain amount to a company – which was never implemented – that that offer involves advantageous economic effects for the beneficiary, without nevertheless taking account of the conditions governing the performance of the loan contract in question and, in particular, of those relating to the grant and repayment of that loan, and especially not where the beneficiary did not accept that offer but confined itself to refinancing itself on the terms prevailing on the market. If it were otherwise, even a loan contract containing objectively disadvantageous terms, such as higher interest rates and stricter repayment terms than those offered by the market, would have to be characterised as an advantage as referred to in Article 87(1) EC, and this merely on the ground that a public creditor declared itself prepared to make a certain sum available to the beneficiary.

(see paras 215, 231, 234, 237-238, 253, 255)

4. Only advantages granted directly or indirectly through State resources are held to be aid within the meaning of Article 87(1) EC. The distinction made in that provision between aid granted ‘by a Member State’ and aid granted ‘through State resources’ does not signify that all advantages granted by a State, whether financed through State resources or not, constitute aid, but is intended merely to bring within that definition both advantages which are granted directly by the State and those granted by a public or private body designated or established by that State.

In that context, the application of the private investor criterion necessarily presupposes that the measures taken by the State in favour of an undertaking confer an advantage deriving from State resources.

In addition, as regards the scope of the judicial review to be carried out, it should be recalled that the concept of aid is objective and that, consequently, the characterisation of a measure as State aid, which, according to the Treaty, is the responsibility of both the Commission and the Community Courts, cannot in principle justify the attribution of a broad discretion to the Commission, save for particular circumstances owing to the complex nature of the State intervention in question. It is only in cases where Article 87(3) EC falls to be applied and where, accordingly, the Commission, in the context of its determination of whether certain measures are compatible with the common market, must rely on complex economic, social, regional and sectoral assessments that a broad discretion is conferred on that institution. State aid, as defined in the Treaty, is a legal concept which must be interpreted on the basis of objective factors. For that reason, the Community Courts must in principle, having regard both to the specific features of the case before them and to the technical or complex nature of the Commission’s assessments, carry out a comprehensive review as to whether a measure falls within the scope of Article 87(1) EC.

The advantage must derive from a transfer of State resources. That requirement of a connection between the advantage identified and the commitment of State resources presupposes, in principle, that the advantage in question is closely linked to a corresponding charge included in the State budget or to the creation, on the basis of legally binding obligations entered into by the State, of a sufficiently real economic risk to that budget.

In the case of public statements by a member of the government of a Member State manifesting the latter’s willingness to take appropriate steps to resolve the financial difficulties of an undertaking, a concrete, unconditional and irrevocable commitment of public resources on the part of the Member State, for the purpose of Article 87(1) EC, would require those statements to set out explicitly either the exact sums to be invested, or the specific debts to be guaranteed, or, at the very least, a predefined financial framework, such as a credit line up to a certain amount, as well as the conditions for granting the proposed assistance.

The mere fact that the Member State uses its particular reputation with the financial markets cannot suffice to demonstrate that its resources were exposed to a risk such as can be considered to constitute a transfer of State resources within the meaning of Article 87(1) EC, which is sufficiently linked to the advantage conferred on the undertaking by the public declarations by a member of the government of a Member State. It is not sufficient that, instead of committing, directly or indirectly, State resources, the Member State makes use of the particular rules by which the financial markets operate in order to stabilise the undertaking’s economic position in the short term, specifically with the aim of satisfying the entrepreneurial and financial conditions necessary for the adoption of more concrete measures of support which would have to be taken subsequently.

(see paras 214, 217-219, 262, 280, 282, 297)

5. In Community proceedings concerning State aid, the assessment of facts and evidence falls within the Court’s complete discretion. In addition, in that context, the question whether and to what extent a rule of national law applies to the case in point falls within the scope of a factual assessment by the Court and is subject to the rules on the taking of evidence and on the apportionment of the burden of proof.

(see para. 269)

6. The statement of reasons required by Article 253 EC must be appropriate to the measure at issue and 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 and to enable the competent Community Court to exercise its power of review. Moreover, the duty to state adequate reasons in decisions is an essential procedural requirement which must be distinguished from the question whether the reasoning is well founded, which is concerned with the substantive legality of the measure at issue. The reasoning of a decision consists in a formal statement of the grounds on which that decision is based. If those grounds are vitiated by errors, the latter will vitiate the substantive legality of the decision, but not the statement of reasons in it, which may be adequate even though it sets out reasons which are incorrect.

(see para. 315)