7.

Without it being necessary to establish a strict order of precedence among those rules it may be observed that they are all to be found in the third part of the Treaty, relating to the ‘Policy of the Community’. Title I contains its common rules, that is to say guiding principles. Article 104 is to be found in Title II concerned with the ‘Economic policy’ of the Community; the provisions of that title can thus be interpreted only by reference to the general principles previously set out. It is true that Article 104 states that each Member State is to pursue ‘the economic policy needed to ensure the equilibrium of its overall balance of payments and to maintain confidence in its currency, while taking care to ensure a high level of employment and a stable level of prices’, but it is immediately followed by provisions requiring the Member States to coordinate their economic policies and to provide for cooperation to that end, and the Commission and Council are entitled to make recommendations for the achievement of such cooperation (Article 105). In addition, Article 104, which is contained in Chapter 2, on the balance of payments, cannot have the scope claimed for it by the applicant so as to deprive the Commission in the present case of any power, in applying Article 92 (3), to fix indicators and threshold values in order to determine regions eligible for aid. That is the interpretation, moreover, which the Court upheld in Case 95/81, ( 11 ) where it is stated that Article 104 must be appraised ‘in the light of the system as a whole of the chapter on the balance of payments. Within the framework of that chapter Article 104 merely sets out the general objectives of the economic policy which the Member States must pursue, regard being had to their membership of the Community. It accordingly may not be invoked in order to derogate from the other provisions of the Treaty.’ The interrelationship of the various rules of the Treaty applicable in the present case clearly shows how fundamental the principle of free competition is to the policy of the Community. That is the basis of the prohibition of both agreements between undertakings and State aid in so far as they affect intra-Community trade or competition. Those prohibitions must, however, be qualified. In the case of undertakings, the exemptions laid down in Article 85 (3) are subject to certain conditions and limits, essentially to the effect that a significant level of competition should be maintained. In the case of regional aid, Article 92 (3) (a) and (c) introduce two derogations from freedom of competition, based on Community solidarity (taking into account national solidarity). This too is a principle which is fundamental to the Treaty, as is shown by the extract from its preamble quoted above. The issue here is the necessary balance between free competition and solidarity. The importance of the latter depends upon the particular case; it is more likely to outweigh considerations of competition in the situations of crisis described in subparagraph (a) than in the cases provided for in subparagraph (c) relating to aid intended to assist the development of certain activities or certain economic regions. Economic solidarity must, however, operate in an equitable manner with regard to all the Member States. That is why the criteria for its implementation, by means of Article 92 (3) (a) and (c), must be left to the judgment of the Community, that is to say in the present case the Commission. Such a process has nothing to do with any notion of levelling downward. In my opinion, State aid intended to encourage the development of a region in which there is, for example, serious underemployment (Article 92 (3) (a)) cannot be regarded as incompatible with the common market solely because that region is situated in a State where the general level of development is considered to be high. There would have to be other reasons, perhaps based on the situation of the region by reference to certain indicators or threshold values drawn up, if necessary on a differentiated basis, at a Community level. As regards Article 92 (3) (c), the contested decision shows by the example, inter alia, of the labour market region of Aachen that aid may be granted on the basis of that provision even to regions situated in Member States with a high level of development. Subject to that observation, however, there is nothing to support the applicant's argument that regional aid should be excluded from the scope of the rule in thePhilip Morris case. In that judgment the Court clearly stated that: (1) in general, Article 92 (3) ‘unlike Article 92 (2), gives the Commission a discretion by providing that the aid which it specifies “may” be considered to be compatible with the common market’ (paragraph 17); (2) ‘the Commission has a discretion the exercise of which involves economic and social assessments which must be made in a Community context’ (paragraph 24); (3) ‘As far as concerns Article 92 (3) (c) ... the compatibility with the Treaty of the aid in question must be determined in the context of the Community and not of a single Member State.’ (Paragraph 26).