Case C-501/00

Kingdom of Spain

v

Commission of the European Communities

(Articles 4(c) CS and 67 CS – Commission Decision No 2496/96/ECSC – Export aid for steel undertakings – Observance of a reasonable period – Tax deduction – Duty to state reasons – Selective nature – General measure)

Summary of the Judgment

1. ECSC – Steel aid – Time-limit laid down by Article 6(5) of the Sixth Steel Aid Code for the adoption of the decision by the Commission on the compatibility of an aid – Time-limit not subject to withdrawal of competence

(General Decision No 2496/96, Art. 6(5))

2. ECSC – Steel aid – Investigation procedure for aid plans – Commission’s obligations – Compliance with a reasonable period for the adoption of a definitive decision

(General Decision No 2496/96, Art. 6)

3. Acts of the institutions – Statement of reasons – Duty – Scope – ECSC Decision

(Arts 4(c) CS and 15 CS)

4. ECSC – Aid – Definition – Grant by the public authorities of a tax exemption to a number of undertakings – Included

(Arts 4(c) CS and 67 CS)

5. ECSC – Aid – Definition – Measures pursuing the objective of promotion of international trade by supporting foreign investment – Included

(Art. 4(c) CS)

6. ECSC – Aid – Definition – Effect on trade between Member States or on competition – Irrelevant

(Art. 4(c) CS)

7. ECSC – Aid – Authorisation by the Commission – Authorisation by individual decision – Condition – Prior request by the Member State concerned

(Art. 95 CS)

1. In the context of the Sixth Steel Aid Code, according to which a Member State can lawfully implement an aid measure only pursuant to a formal Commission decision in that respect, the three-month period laid down in Article 6(5) for the adoption of that decision cannot be regarded as a mandatory time-limit subject to withdrawal of competence, the expiry of which would prevent the Commission from deciding on the compatibility of such a planned measure with the ECSC Treaty.

Having regard to the general context in which that period is placed and its objective, were a decision not to be taken by the Commission within that period the Member State concerned would be prevented from implementing that aid measure and could not obtain an authorisation decision to that effect from the Commission under the procedure initiated by the latter. Such a situation would be contrary to the orderly functioning of the rules on State aid, since the Commission’s authorisation could be obtained only as a result of a new procedure initiated in accordance with the Steel Aid Code, which would delay the Commission’s decision without offering any additional safeguard to the Member State concerned.

(see paras 50-51)

2. Having initiated the investigation procedure in respect of aid projects provided for by the Sixth Steel Aid Code, the Commission has a duty, in accordance with the principle of sound administration, to adopt a definitive decision within a reasonable period from receipt of the observations of the Member State concerned, any interested parties, and possibly other Member States. If the duration of the investigation procedure is excessive it is likely to make it more difficult for the Member State concerned to refute the Commission’s arguments, thus infringing the rights of the defence.

In that regard, the reasonableness of such a period must be appraised in the light of the circumstances specific to each case and, in particular, its context, the various procedural stages followed by the Commission, the conduct of the parties in the course of the procedure, the complexity of the case and its importance for the various parties involved.

(see paras 52-53)

3. The statement of reasons required by Article 15 CS must be appropriate to the act 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 Court to carry out its review. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 15 CS 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. 73)

4. The term ‘aid’, within the meaning of Article 4(c) CS, necessarily implies advantages granted directly or indirectly through State funds or constituting an additional charge for the State or for bodies designated or established for that purpose and Article 67(2) CS, by providing, in derogation from Article 4 CS, for situations enabling the Commission to authorise Member States to grant aid, does not distinguish between aid specific to the coal and steel sector and aid which applies to it only as the result of a general measure.

A measure by which the public authorities grant to certain undertakings a tax exemption, which places the recipients in a more favourable financial position than that of other taxpayers, constitutes State aid within the meaning of Article 4(c) CS.

(see paras 91-92, 116)

5. Measures of State intervention are not characterised by reference to their causes or aims, but must be defined in relation to their effects. The fact that national measures pursue a commercial or industry policy objective, such as the promotion of international trade by supporting foreign investment, is thus not sufficient to take them outside the classification of aid’ within the meaning of Article 4(c) CS.

(see para. 125)

6. In order to take the view that national measures fall within the prohibition on State aid, the Commission is not obliged to show that those measures have an effect on trade between Member States on or competition, as would be required, by contrast, under the EC Treaty.

(see para. 129)

7. The logic inherent in that system of authorisation, by way of derogation, of aid necessary for the proper functioning of the common market for coal and steel, requires, in the case of an individual decision by the Commission, that the Member State concerned ask the Commission to initiate the procedure laid down in Article 95 CS before the Commission considers whether aid is needed in order to attain the Treaty’s objectives.

(see paras 153, 155)