JUDGMENT OF THE GENERAL COURT (Third Chamber)

4 May 2022 ( )

(State aid – Aid implemented by Greece – Decision declaring the aid incompatible with the internal market – Concept of State aid – Advantage – Private operator principle – Guarantee premium – Firm in difficulty – Knowledge of the Greek authorities – Commission Notice on State aid in the form of guarantees – Manifest error of assessment)

In Case T‑423/14 RENV,

Larko Geniki Metalleftiki kai Metallourgiki AE, established in Athens (Greece), represented by I. Drillerakis, E. Rantos and N. Korogiannakis, lawyers,

applicant,

v

European Commission, represented by A. Bouchagiar, acting as Agent,

defendant,

APPLICATION pursuant to Article 263 TFEU for the annulment in part of Commission Decision 2014/539/EU of 27 March 2014 on the State aid SA.34572 (2013/C) (ex 13/NN) implemented by Greece for Larco General Mining & Metallurgical Company SA (OJ 2014 L 254, p. 24),

THE GENERAL COURT (Third Chamber),

composed of G. De Baere, President, V. Kreuschitz (Rapporteur) and K. Kecsmár, Judges,

Registrar: E. Coulon,

gives the following

Judgment

Background to the dispute

1 Larko Geniki Metalleftiki kai Metallourgiki AE (‘the applicant’ or ‘Larko’) is a company specialising in the extraction and processing of laterite ore, the extraction of lignite and the production of ferronickel and its by-products.

2 The applicant was established in 1989 as a new corporate entity following the liquidation of Hellenic Mining and Metallurgical SA. At the time of the relevant facts, it had three shareholders: the Greek State, which held 55.2% of its shares through the intermediary of Hellenic Republic Asset Development Fund, a private financial institution, the National Bank of Greece SA (‘NBG’), which held 33.4% of its shares, and Public Power Corporation (the main electricity producer in Greece, of which the State is the majority shareholder), which held 11.4% of its shares.

3 In March 2012, Hellenic Republic Asset Development Fund informed the European Commission about a programme for the privatisation of Larko.

4 In April 2012, the Commission initiated an ex officio preliminary investigation into that privatisation, in accordance with the rules on State aid.

5 The investigation examined six measures:

– The first measure concerned, first, a 1998 debt settlement agreement between Larko and its major creditors, in accordance with which the company’s liabilities to creditors were to be serviced with an interest rate of 6% per annum and, secondly, the non-collection of the debt owed to the Greek State (‘measure No 1’);

– The second concerned a guarantee for a loan of EUR 30 million made by ATE Bank to Larko; the guarantee was provided by the Greek State in 2008 (‘measure No 2’ or ‘the 2008 guarantee’), covered 100% of the loan for up to three years and stipulated a guarantee premium of 1% per annum;

– The third concerned a EUR 134 million increase in the share capital, proposed in 2009 by Larko’s Board of Directors and approved by the three shareholders; the Greek State participated fully and NBG participated partially (‘measure No 3’);

– The fourth concerned a guarantee of indefinite duration provided by the State in 2010 to cover fully a letter of guarantee that NBG was to provide to Larko for the sum of approximately EUR 10.8 million; a guarantee premium of 2% per annum was stipulated (‘measure No 4’); the letter of guarantee guaranteed the stay of execution by the Areios Pagos (Court of Cassation, Greece) of a judgment by which the Efeteio Athinon (Court of Appeal, Athens, Greece) had recognised the existence of a debt of EUR 10.8 million owed by Larko to one of its creditors;

– The fifth concerned letters of guarantee which, in accordance with a Greek administrative court decision, were to replace a compulsory pre-payment of 25% of a tax fine (‘measure No 5’);

– The sixth concerned two guarantees provided by the State in 2011 for two loans of EUR 30 million and EUR 20 million respectively granted by ATE Bank; the guarantees covered 100% of the loans and stipulated a premium of 1% per annum (‘measure No 6’).

6 In the course of the preliminary investigation, the Commission requested additional information from the Greek authorities, which they provided in 2012 and 2013. Meetings were also held between Commission staff and representatives of the Greek authorities.

7 By decision of 6 March 2013 (OJ 2013 C 136, p. 27; ‘the opening decision’), the Commission initiated the formal investigation procedure provided for by Article 108(2) TFEU in relation to State aid SA.34572 (2013/C) (ex 13/NN).

8 In the course of the procedure provided for by Article 108(2) TFEU, the Commission invited the Greek authorities and interested third parties to submit their comments on the measures mentioned in paragraph 5 above. The Commission received comments from the Greek authorities on 30 April 2013. It received no comments from interested third parties.

9 On 27 March 2014, the Commission adopted Decision 2014/539/EU on the State aid SA.34572 (2013/C) (ex 13/NN) implemented by Greece for Larco General Mining & Metallurgical Company SA (OJ 2014 L 254, p. 24; ‘the contested decision’).

10 In the contested decision, the Commission formed the view, as a preliminary matter, that, at the time when the six measures in question were granted, Larko had been a firm in difficulty within the meaning of points 9 to 11 of the Community guidelines on State aid for rescuing and restructuring firms in difficulty (OJ 2004 C 244, p. 2; ‘the Guidelines on State aid for rescuing and restructuring’).

11 As regards its assessment of the measures mentioned in paragraph 5 above, the Commission took the view, first of all, that measures Nos 2, 3, 4 and 6 constituted State aid within the meaning of Article 107(1) TFEU, next, that those measures had been granted in breach of the notification and standstill obligations laid down in Article 108(3) TFEU and, lastly, that the measures in question were aid incompatible with the internal market and must be recovered in accordance with Article 14(1) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 1999 L 83, p. 1).

12 The Commission also took the view that the two other measures, Nos 1 and 5, concerning respectively the non-collection of a debt owed to the Ministry of Finance and two guarantees provided by the State in 2011 (see paragraph 5 above) did not constitute State aid.

13 The operative part of the contested decision reads as follows:

‘Article 1

The non-collection of debt to the Ministry of Finance and letters of guarantee instead of pre-payment of additional tax in 2010, which Greece has implemented for [Larko], do not constitute State aid within the meaning of Article 107(1) [TFEU].

Article 2

The State aid amounting to EUR 135 820 824.35 in the form of State guarantees to [Larko] in 2008, 2010 and 2011 and the State’s participation to the company’s capital increase in 2009, unlawfully granted by Greece in breach of Article 108(3) [TFEU] is incompatible with the internal market.

Article 3

1. Greece shall recover the incompatible aid referred to in Article 2 from the beneficiary.

2. The sums to be recovered shall bear interest from the date on which they were put at the disposal of the beneficiaries until their actual recovery.

3. The interest shall be calculated on a compound basis in accordance with Chapter V of Commission Regulation (EC) No 794/2004 [of 21 April 2004 implementing Council Regulation (EC) No 659/1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 2004 L 140, p. 1)], as amended.

4. As regards measure [No] 3, Greece shall provide the exact date(s) when it provided its contribution to the 2009 share capital increase.

5. Greece shall cancel all outstanding payments of the aid referred to in Article 2 with effect from the date of adoption of this Decision.

Article 4

1. Recovery of the aid referred to in Article 2 shall be immediate and effective.

2. Greece shall ensure that this Decision is implemented within four months following the date of notification of this Decision.

Article 5

1. Within two months following notification of this Decision, Greece shall submit the following information:

(a) the total amount (principal and recovery interests) to be recovered from the beneficiary;

(b) a detailed description of the measures already taken and planned to comply with this Decision;

(c) documents demonstrating that the beneficiary has been ordered to repay the aid.

2. Greece shall keep the Commission informed of the progress of the national measures taken to implement this Decision until recovery of the aid referred to in Article 2 has been completed. It shall immediately submit, on simple request by the Commission, information on the measures already taken and planned to comply with this Decision. It shall also provide detailed information concerning the amounts of aid and recovery interest already recovered from the beneficiary.

Article 6

This Decision is addressed to the Hellenic Republic.’

14 The annex to the contested decision provides ‘information about the amounts of aid received, to be recovered and already recovered’, as set out below:

Identity of the beneficiary – measure Total amount of aid received Total amount of aid to be recovered (Principal) Total amount already reimbursed





Principal Recovery interest Lar[k]o – measure [No] 2 30 000 000 30 000 000 0 0 Lar[k]o – measure [No] 3 44 999 999.40 44 999 999.40 0 0 Lar[k]o – measure [No] 4 10 820 824.95 10 820 824.95 0 0 Lar[k]o – measure [No] 6 50 000 000 50 000 000 0 0

Procedure and forms of order sought by the parties

18 By application lodged at the Registry of the General Court on 6 June 2014, the applicant brought the present action.

19 By document lodged at the Registry of the General Court on 9 October 2014, Elliniki Metalleftiki kai Metallourgiki Larymnis Larko AE applied for leave to intervene in the proceedings in support of the form of order sought by the applicant. That application was dismissed by order of 11 June 2015, Larko v Commission (T‑423/14, not published EU:T:2015:439). An appeal against that order was also dismissed, by order of 6 October 2015, Metalleftiki kai Metallourgiki Etairia Larymnis Larko v Commission (C‑385/15 P(I), not published, EU:C:2015:681).

20 By decision of the President of the Ninth Chamber of the General Court of 3 September 2015, the proceedings were stayed pending the final decision of the Court of Justice in Case C‑385/15 P(I). The proceedings were resumed on 16 October 2015.

21 Following a change in the composition of the Chambers of the Court, pursuant to Article 27(5) of the Rules of Procedure of the General Court, the Judge-Rapporteur was assigned to the Sixth Chamber, to which the present case was accordingly allocated.

22 On a proposal from the Judge-Rapporteur, the General Court (Sixth Chamber) decided to open the oral stage of the procedure and, by way of measures of organisation of procedure under Article 89 of the Rules of Procedure, put written questions to the parties, asking them to reply in writing. The parties lodged their responses at the Registry of the Court within the prescribed period.

23 The parties presented oral argument and answered the questions put by the Court at the hearing on 26 January 2017.

24 By judgment of 1 February 2018, Larko v Commission (T‑423/14, EU:T:2018:57), the General Court dismissed the action in its entirety.

25 By document lodged at the Registry of the Court of Justice on 4 April 2018, the applicant brought an appeal against the judgment of 1 February 2018, Larko v Commission (T‑423/14, EU:T:2018:57).

26 By judgment of 26 March 2020, Larko v Commission (C‑244/18 P, EU:C:2020:238), the Court of Justice set aside the judgment of 1 February 2018, Larko v Commission (T‑423/14, EU:T:2018:57), in so far as the General Court had rejected the first part of the first plea of the action to the extent that it related to Measure No 2, dismissed the appeal as to the remainder, referred the case back to the General Court and reserved the costs.

27 With regard to the first part of the first plea, the Court of Justice found that the General Court had erred in law (judgment of 26 March 2020, Larko v Commission, C‑244/18 P, EU:C:2020:238, paragraphs 61 to 71).

28 In particular, first, it is apparent from paragraph 70 of the judgment of 26 March 2020, Larko v Commission (C‑244/18 P, EU:C:2020:238), that, given that the aim of the recovery of the aid at issue from the beneficiary is to eliminate the distortion of competition brought about by a certain competitive advantage and, thus, to re-establish the status quo before the aid was granted, the Commission cannot assume that an undertaking has benefited from an advantage constituting State aid solely on the basis of a negative presumption, based on a lack of information enabling the contrary to be found, if there is no other evidence capable of positively establishing the actual existence of such an advantage (judgment of 17 September 2009, Commission v MTU Friedrichshafen, C‑520/07 P, EU:C:2009:557, paragraphs 57 and 58). The Court of Justice held that, by assuming, when it had concluded, in essence, that there was no evidence referring to the situation prior to or on the date that measure No 2 was granted which showed that the Greek authorities were aware of Larko’s difficulties when that measure was granted, that a private operator in the Greek authorities’ situation should have been aware of those difficulties at that time, the General Court disregarded the case-law referred to above and failed to consider the context in which that measure was adopted (judgment of 26 March 2020, Larko v Commission, C‑244/18 P, EU:C:2020:238, paragraph 71). In addition, the Court of Justice stated that it was for the General Court to ascertain whether the administrative file contained reliable and coherent evidence which provided a sufficient basis for concluding, (i), that the Greek authorities were or should have been aware of Larko’s alleged difficulties at the time when measure No 2 was granted and, (ii) that that point was not disputed between the Commission and the Greek authorities during the administrative procedure (judgment of 26 March 2020, Larko v Commission, C‑244/18 P, EU:C:2020:238, paragraph 123).

29 Secondly, the Court of Justice considered that there was no need to examine the applicant’s arguments, set out in paragraphs 50 and 51 of the judgment of 26 March 2020, Larko v Commission (C‑244/18 P, EU:C:2020:238), concerning whether the annual guarantee premium of 1% was consistent with the conduct of a private operator (judgment of 26 March 2020, Larko v Commission, C‑244/18 P, EU:C:2020:238, paragraph 72).

30 Following the delivery of the judgment of 26 March 2020, Larko v Commission (C‑244/18 P, EU:C:2020:238), the case, now registered as Case T‑423/14 RENV, was allocated to the Third Chamber of the General Court to which the Judge-Rapporteur was assigned.

31 In accordance with Article 217 of the Rules of Procedure, the parties submitted, within the time limits set, observations and further observations on the conclusions to be drawn from the judgment of 26 March 2020, Larko v Commission (C‑244/18 P, EU:C:2020:238), for the resolution of the dispute.

32 Acting on a proposal from the Judge-Rapporteur, the General Court (Third Chamber), by way of measures of organisation of procedure pursuant to Article 89 of the Rules of Procedure, put written questions to the parties, requesting them to respond in writing. The parties lodged their responses at the Registry of the General Court within the period prescribed.

33 By decision of the President of the General Court of 22 November 2021, under Article 27(1) of the Rules of Procedure, Case T‑423/14 RENV was assigned to a new Judge-Rapporteur, sitting in the Third Chamber.

34 In its observations on the conclusions to be drawn from the judgment of 26 March 2020, Larko v Commission (C‑244/18 P, EU:C:2020:238), the applicant claims that the General Court should:

– uphold the action on the basis of the first part of the first plea;

– annul Article 2 of the contested decision in so far as it classifies measure No 2 as State aid incompatible with the internal market;

– annul Article 3 of the contested decision in so far as it orders recovery, with interest, of the amount of EUR 30 million of the alleged aid linked to that measure;

– order the repayment, with interest, of any sum that may have been recovered from it in that regard, directly or indirectly, pursuant to the contested decision;

– order the Commission to pay the costs incurred before the General Court and the Court of Justice.

35 In its observations on the conclusions to be drawn from the judgment of 26 March 2020, Larko v Commission (C‑244/18 P, EU:C:2020:238), the Commission contends that the General Court should:

– reject the first part of the first plea and, consequently, dismiss the action;

– order the applicant to pay the costs.

Law

Scope of the dispute

36 Under the first and second paragraphs of Article 61 of the Statute of the Court of Justice of the European Union, where the appeal is well founded and the case is referred back to the General Court for judgment, the latter is bound by the decision of the Court of Justice on points of law. Thus, once the Court of Justice has set aside a judgment or an order and referred the case back to the General Court, that Court is seised, pursuant to Article 215 of the Rules of Procedure, of the case by the judgment of the Court of Justice and must rule again on all the pleas in law in support of annulment raised by the applicant, apart from those elements of the operative part not set aside by the Court of Justice and the considerations on which those elements are essentially founded, as those elements have acquired the authority of res judicata (see, to that effect, judgment of 3 July 2018, Keramag Keramische Werke and Others v Commission, T‑379/10 RENV and T‑381/10 RENV, not published, EU:T:2018:400, paragraph 26 and the case-law cited).

37 As regards the scope of the present dispute, it should be noted that it concerns only the first part of the first plea, the applicant’s other pleas having been rejected definitively by the judgment of 1 February 2018, Larko v Commission (T‑423/14, EU:T:2018:57), in so far as that judgment was upheld by the judgment of 26 March 2020, Larko v Commission (C‑244/18 P, EU:C:2020:238) (see paragraph 23 above).

38 That first part seeks to call in question the merits of the grounds set out in recitals 73, 74 and 77 of the contested decision, which read as follows:

‘(73) The Commission disagrees with the argument of the Greek authorities that the conditions of [point] 3.2 of the [Commission Notice on the application of Articles 107 and 108 TFEU to State aid in the form of guarantees (OJ 2008 C 155, p. 10; “the Guarantee Notice”)] are fulfilled. The Commission has established that Lar[k]o was a firm in difficulty in 2008. In addition, an annual guarantee premium of 1% cannot be considered as reflecting the risk of default for the guaranteed loans, given the significant financial difficulties of Lar[k]o and in particular its high debt to equity ratio.

(74) The Commission considers that a reasonable market creditor would not have provided Lar[k]o with a guarantee under those conditions. Since the measure was provided selectively to Lar[k]o, the Commission concludes that the 2008 State guarantee provided a selective advantage to the beneficiary.

…

(77) Thus, it is concluded that Measure [No] 2 constitutes State aid within the meaning of Article 107(1) [TFEU]. …’

39 The grounds set out in recital 73 of the contested decision consist essentially of two parts: first, the Commission’s finding that, in 2008, Larko was ‘a firm in difficulty’ within the meaning of point 3.2(a) of the Commission Notice on the application of Articles 87 and 88 of the EC Treaty to State aid in the form of guarantees (‘the Guarantee Notice’), read in conjunction with the definition in points 9 to 11 of the Guidelines on State aid for rescuing and restructuring (‘the first part of the grounds’) and, secondly, the consideration that ‘an annual guarantee premium of 1% cannot be considered as reflecting the risk of default for the guaranteed loans, given the significant financial difficulties of Lar[k]o and in particular its high debt to equity ratio’, within the meaning of point 3.2(d) of the Guarantee Notice (‘the second part of the grounds’). Furthermore, it is clear from the structure of recital 73 that, from the Commission’s point of view, those two parts of the grounds constitute, in principle, alternative justifications, one based on point 3.2(a) and the other based on point 3.2(d) of that notice, for concluding that the Greek authorities had not demonstrated that measure No 2 was in line with market conditions, and that, consequently, it entailed an advantage for the purposes of Article 107(1) TFEU.

40 In its judgment of 26 March 2020, Larko v Commission (C‑244/18 P, EU:C:2020:238, paragraphs 53 to 71 and 121 to 123), the Court of Justice ruled on the General Court’s assessment of the first part of the grounds without, however, expressly assessing Larko’s complaints about the General Court’s analysis regarding the second part (judgment of 26 March 2020, Larko v Commission, C‑244/18 P, EU:C:2020:238, paragraph 72). Furthermore, in its decision to refer the case, the Court of Justice held that it was for the General Court to ascertain whether the administrative file contained reliable and coherent evidence which provided a sufficient basis for concluding, first, that the Greek authorities were or should have been aware of Larko’s alleged difficulties at the time when measure No 2 was granted and, secondly, that that point was not disputed between the Commission and the Greek authorities during the administrative procedure (judgment of 26 March 2020, Larko v Commission, C‑244/18 P, EU:C:2020:238, paragraph 123).

41 Given that the grounds given in recital 73 of the contested decision are alternatives, the General Court considers it necessary to assess, first, the merits of the arguments concerning the second part of the grounds, linked to the application of point 3.2(d) of the Guarantee Notice, while bearing in mind the requirement to ascertain whether the Greek authorities were or should have been aware of Larko’s financial difficulties by the time measure No 2 was granted, and, secondly, whether or not that point was disputed between the Commission and those authorities during the administrative procedure.

Merits of the arguments relied on in the first part of the first plea, relating to the second part of the grounds of recital 73 of the contested decision, regarding whether the Greek authorities were aware of Larko’s alleged financial difficulties and whether that point was disputed during the administrative procedure

42 With regard to the merits of the second part of the grounds in the light of the criterion referred to in point 3.2(d) of the Guarantee Notice, the applicant merely submits in essence, first, that the annual guarantee premium of 1% reflected Larko’s good solvency ratio at the time measure No 2 was granted, bearing in mind the company’s profitability over the three preceding years, secondly, in the same year, 2008, Larko had obtained a loan from ATE Bank without a guarantee and, thirdly, that premium was in line with the premiums received by the Greek State in respect of loan guarantees which it provided to other companies in a comparable situation to its own.

43 In its observations on the conclusions to be drawn from the judgment of 26 March 2020, Larko v Commission (C‑244/18 P, EU:C:2020:238), the applicant challenges the reasoning set out in paragraphs 91 to 98 of the judgment of 1 February 2018, Larko v Commission (T‑423/14, EU:T:2018:57), and argues that there is no reason to consider that a private operator in the same situation as the Greek authorities before the grant of measure No 2 should have been aware of Larko’s alleged economic and financial difficulties. It states that the Commission replaced the criteria set out in point 3.2(d) of the Guarantee Notice by a vague reference to Larko’s financial difficulties. In addition, the Commission failed to comply with the duty to examine itself the amount of the premium charged and shifted onto Larko and the Greek State the burden of proving that it was appropriate. According to the applicant, the Commission failed to establish the guarantee premium benchmark that could be found on the financial markets, nor did it establish the market price of a similar non-guaranteed loan or classify the borrower in a particular risk category. Lastly, the conclusion drawn in recital 74 of the contested decision is both unfounded and devoid of reasoning.

44 The Commission disputes the applicant’s arguments and considers, in essence, that the first part of the first plea should be rejected, in particular on account of the second part of the grounds contained in recital 73 of the contested decision (see paragraph 36 above).

45 In the present case, the Commission’s argument must be upheld.

46 In the first place, the reference, in the context of the second part of the grounds of recital 73 of the contested decision, to ‘the significant financial difficulties of Lar[k]o’ must not be confused with the reference, in the context of the first part of the grounds of the same recital, to Larko’s status as ‘a firm in difficulty’ in 2008, which corresponds to the definition in points 9 to 11 of the Guidelines on State aid for rescuing and restructuring, to which only point 3.2(a) of the Guarantee Notice makes reference (see paragraph 36 above). Furthermore, as is apparent from paragraph 104 of the judgment of 1 February 2018, Larko v Commission (T‑423/14, EU:T:2018:57), not criticised by the Court of Justice, the conditions set out in point 3.2 of that notice are cumulative, with the effect that, taken together, they are ‘sufficient to rule out the presence of State aid’. As a result, where one of them is not fulfilled, in the present case the condition laid down in point 3.2(d) of the Guarantee Notice, which states that a market-oriented price is to be paid for the guarantee, that is sufficient for the Commission to consider that the Member State concerned has not adequately shown that the existence of State aid could be ruled out, on the basis of that notice.

47 In the second place, in its judgment of 26 March 2020, Larko v Commission (C‑244/18 P, EU:C:2020:238), the Court of Justice did not rule either on the merits of the second part of the grounds of recital 73 of the contested decision, or on the merits of the General Court’s assessment in paragraphs 93 to 98 of its judgment of 1 February 2018, Larko v Commission (T‑423/14, EU:T:2018:57), in that regard, even though the applicant had expressly disputed them in its appeal (judgment of 26 March 2020, Larko v Commission, C‑244/18 P, EU:C:2020:238, paragraphs 50, 51 and 72). The Court of Justice merely criticised the General Court’s misapplication of the private operator principle, in that it assumed, on the basis of a negative presumption, and consequently in breach of the case-law concerning the allocation of the burden of proof in relation to that principle, that, at the time measure No 2 was granted in 2008, the Greek authorities should have been aware of the fact that Larko was ‘a firm in difficulty’ in 2008, within the meaning of point 3.2(a) of the Guarantee Notice, read in conjunction with the definition in points 9 to 11 of the Guidelines on State aid for rescuing and restructuring (judgment of 26 March 2020, Larko v Commission, C‑244/18 P, EU:C:2020:238, paragraphs 53 to 70). Accordingly, the Court of Justice required the General Court to ascertain the existence of evidence which showed, as the case may be, that those authorities were or should have been aware of ‘Larko’s difficulties’ in the situation prior to or on the date that measure No 2 was granted (judgment of 26 March 2020, Larko v Commission, C‑244/18 P, EU:C:2020:238, paragraphs 71 and 123).

48 In the third place, in the second part of the grounds of recital 73 of the contested decision, the Commission established a link between Larko’s ‘significant financial difficulties’, on the one hand, and its ‘high debt to equity ratio’ affecting its ‘risk of default for the guaranteed loans’, on the other hand. The second and third columns of the table in recital 56 of the contested decision show that that ratio was 1.3 in 2007, the total debt being EUR 141.2 million and own equity EUR 104 million, and EUR -575 million in 2008, with a total debt of EUR 230.1 million and own equity of minus EUR 0.4 million. Thus, according to that table, Larko’s own equity fell from EUR 104 million to EUR -0.4 million between 2007 and 2008, whilst its total debt increased from EUR 141.2 million to EUR 230.1 million.

49 In the fourth place, the General Court considers that those findings, read in conjunction with the relevant evidence from the case file, are sufficient to establish that, by the time the guarantee was provided, Larko was experiencing significant financial difficulties and that the Greek authorities were aware of this, a point which they did not dispute during the administrative procedure. That assessment is demonstrated by the following evidence from the case file.

50 First, in paragraphs 36 to 38 of the opening decision, the Commission had expressly drawn the attention of the Greek authorities to the fact that the guarantee premium of 1% intended to remunerate measure No 2 was potentially not in line with market conditions, in the light of point 3.2 of the Guarantee Notice, and to the fact that the 2008 guarantee covered more than 80% of the outstanding loan guaranteed, namely 100% of it, so that the presence of aid could not be ruled out (see point 3.2(c) of that notice). The Commission had stated, in paragraph 37 of the opening decision, that it had no indication of a corresponding guarantee premium benchmark on the financial market, and as the General Court had already noted in paragraph 97 of the judgment of 1 February 2018, Larko v Commission (T‑423/14, EU:T:2018:57), the Commission considered that an annual premium of 1% did not at first sight reflect the risk of default for the guaranteed loans on Larko’s part, given its significant financial difficulties and, in particular, its high debt-to-equity ratio and its negative equity.

51 Secondly, it appears that the Commission expressly requested the Greek authorities to provide it with any relevant information in order to enable it to assess, in the light of the criteria in point 3.2(d) of the Guarantee Notice in particular, the adequacy of the premium of 1% for remunerating a loan that was 100% covered by the 2008 guarantee, in comparison with the ‘corresponding market price’ and by reference to the risk of default on the part of Larko, where appropriate, classified by means of ‘a risk rating’, for example, through ‘a comparison of prices paid by similarly rated undertakings on the market’ (see the fourth paragraph of point 3.2(d) of that notice). Accordingly, in paragraph 1 of the operative part of the opening decision, the Commission requested the Greek State to provide it with ‘all information that may contribute to the evaluation of the aid/measure [including therefore measure No 2] within one month’.

52 Thirdly, however, in that regard, in their observations on the opening decision, the Greek authorities merely stated, in a manifestly inadequate, if not flawed, manner that Larko had a good credit rating in 2008, on the basis of its profitability over the three preceding years, and that the annual guarantee premium of 1% was the premium that corresponded to market conditions, without however providing any evidence to support those assertions (paragraphs 3.52 and 3.53 of the observations of 29 March 2013) (see, to that effect, judgment of 1 February 2018, Larko v Commission, T‑423/14, EU:T:2018:57, paragraph 97). That brief response to the Commission’s request to explain in detail the reasons why that premium corresponded to the market price, in accordance with the criteria laid down in particular in the fourth paragraph of point 3.2(d) of the Guarantee Notice, conflicts with the statements made by those authorities in paragraphs 2.27 to 2.32 of their observations, in which they acknowledged the ‘sharp deterioration’ in Larko’s financial situation during the second half of 2008 (see also paragraph 51 below). In the light of that evidence, the General Court therefore holds that the Commission did not commit a manifest error in taking the view that the annual guarantee premium of 1% could not be considered as reflecting the risk of default on the part of Larko for the guaranteed loans (see, to that effect, judgment of 1 February 2018, Larko v Commission, T‑423/14, EU:T:2018:57, paragraphs 92 to 98).

53 Fourthly, that conclusion is supported not only by the consistent figures relating to the losses suffered by Larko during 2007 and 2008, already collected and announced by the Commission in paragraph 18 of the opening decision and set out in recital 56 of the contested decision (see paragraph 45 above), but also by point 3.2(c) of the Guarantee Notice, from which it is clear that the existence of State aid cannot be ruled out where the 2008 guarantee covers ‘more than 80% of the outstanding loan’, a point which the Commission had already referred to in paragraph 36 in fine of the opening decision. It is also common ground that measure No 2 was intended to cover 100% of the EUR 30 million loan granted to Larko by ATE Bank.

54 Fifthly, as required in paragraph 123 of the judgment of 26 March 2020, Larko v Commission (C‑244/18 P, EU:C:2020:238), the General Court states that it is clear from the administrative file, namely from the observations of the Greek authorities on the opening decision, as summarised in recitals 32 to 34 of the contested decision, that since mid-2008 those authorities were aware of Larko’s very poor financial situation, which cast doubt on whether the guarantee premium of 1% was in line with the market price at the time the guarantee was granted, on 22 December 2008. As the Commission points out, in paragraphs 2.27 to 2.32 of the Greek authorities’ observations, it is stated inter alia that:

‘From the second half [2008], L[arko’s] financial results experienced a sharp deterioration. That deterioration was due mainly to the sharp fall in the price of nickel from mid-2008 … That trend led to a collapse in L[arko’s] turnover and the extremely negative financial results for 2008. L[arko’s] negative financial situation was also aggravated due to the lapsing of hedging contracts which produced an additional accounting loss … The negative picture of L[arko’s] financial results began to be noticed in July 2008 and it persisted subsequently with the fall of world nickel prices. Whilst the company was making profits and had good economic results up until mid-2008, it subsequently showed a sharp deterioration, which finished with L[arko] showing an extremely negative picture at the end of the year (proportional to the sharp fall in world nickel prices).’

55 In paragraphs 63 to 66 of its further observations on the conclusions to be drawn from the judgment of 26 March 2020, Larko v Commission (C‑244/18 P, EU:C:2020:238), the applicant merely plays down the probative value of those factors and states, in a manner that is terse and lacking credibility, that Larko’s financial weakness was only transitory, essentially due to the fall in the price of nickel during the second half of 2008, and it was noticed for the first time in its financial statements for 2008, from which it was concluded that they constituted a factor that post-dated the granting of measure No 2. However, those assertions are contradicted by the observations of the Greek authorities on the opening decision and are insufficient to call in question the fact that, (i), since September 2008, when the decision to grant measure No 2 was taken, those authorities were fully aware of the drastic deterioration in Larko’s financial situation and, (ii), that point was not disputed between them and the Commission during the administrative procedure.

56 In the fifth place, in the light of the above considerations, the rules on the allocation of the burden of proof in the context of the application of the private operator principle cannot invalidate that conclusion, since otherwise the burden of proof would be unduly reversed to the detriment of the Commission and the scope of the Member State’s duty to cooperate in good faith under Article 4(3) TEU would be disregarded, by taking into account the separation of the spheres of knowledge and responsibility which give rise to the requirements to provide relevant information, in particular under point 3.2(d) of the Guarantee Notice.

57 It is true that, first, it is settled case-law that the Commission is required, in the interests of sound administration of the fundamental rules of the FEU Treaty relating to State aid, to conduct a diligent and impartial administrative procedure, so that it has at its disposal, when adopting the final decision, the most complete and reliable information possible for that purpose. Therefore, it is for the Commission to ask the Member State concerned to provide it with all the relevant information enabling it to determine whether the conditions for applying the private operator principle are satisfied. Even where that institution is faced with a Member State which does not fulfil its duty to cooperate and has not provided the Commission with the information requested, it must base its decisions on reliable and coherent evidence which provides a sufficient basis for concluding that an undertaking has benefited from an advantage amounting to State aid and which, therefore, supports the conclusions which it arrives at. In that regard, the Commission cannot assume that an undertaking has benefited from an advantage constituting State aid solely on the basis of a negative presumption, based on a lack of information enabling the contrary to be found, if there is no other evidence capable of positively establishing the actual existence of such an advantage (see, to that effect, judgments of 26 March 2020, Larko v Commission, C‑244/18 P, EU:C:2020:238, paragraphs 67 to 70 and the case-law cited, and of 7 May 2020, BTB Holding Investments and Duferco Participations Holding v Commission, C‑148/19 P, EU:C:2020:354, paragraphs 48 to 51 and the case-law cited). Moreover, the lawfulness of a decision concerning State aid falls to be assessed by the European Union judicature in the light of the information available to the Commission at the time when it adopted that decision and which could have been obtained, at its request, during the administrative procedure (see, to that effect, judgment of 20 September 2017, Commission v Frucona Košice, C‑300/16 P, EU:C:2017:706, paragraphs 70 and 71 and the case-law cited).

58 Secondly, case-law has recognised that guidelines adopted by the Commission, such as the Guarantee Notice, cannot as such impose obligations on the Member States (see, to that effect and by analogy, judgment of 19 July 2016, Kotnik and Others, C‑526/14, EU:C:2016:570, paragraphs 40 to 44), including in the matter of the burden of proof for the purposes of demonstrating the existence of an advantage.

59 However, in the present case, in the light of what is stated in paragraphs 45 to 51 above, from the time of the opening decision the Commission possessed sufficiently reliable and coherent evidence to show that the Greek authorities were aware of Larko’s difficult financial situation at the time measure No 2 was granted and that the latter did not correspond to market conditions. Moreover, in that decision, it had expressly requested the Greek authorities to provide it with relevant information in that regard, with the result that in order to fulfil the criteria set out in point 3.2(d) of the Guarantee Notice, they were required to provide any evidence that would call into question that information. In particular, the Greek authorities could have sought to establish that, despite Larko’s undisputed financial difficulties, the premium of 1% to cover 100% of a loan corresponded to the practice on the Greek financial market or they could have provided evidence with regard to retaining its risk rating until December 2008, something which neither those authorities nor Larko did. The mere fact, relied on by those authorities, that Larko also received in 2008 a loan granted by ATE Bank without requiring a State guarantee does not alter that assessment, the Commission having rightly pointed out that, at that stage, that bank was controlled by the Greek State and that the grant of that loan did not preclude subsequent deterioration of Larko’s economic situation during that year.

60 That assessment corresponds moreover to the separation of the spheres of knowledge and responsibility underlying the conditions of point 3.2 of the Guarantee Notice, which are, in particular, meant to make it easier for a Member State to demonstrate that an individual public guarantee does not involve State aid that should be notified to the Commission. Even though, by such a notice that is not legally binding on the Member States, the Commission cannot reverse, to the latter’s detriment, the burden of proof of the existence of State aid noted in the case-law referred to in paragraph 54 above, the fact remains that it may make clear in that notice the relevant information, in particular of an economic nature, which in its view may rule out sufficiently the presence of State aid and which the Member State is in a position to provide in accordance with its duty under Article 4(3) TEU to cooperate in good faith, precisely on the ground that such information falls within its sphere of knowledge and responsibility.

61 Lastly, nor is that assessment affected by the judgments of 12 March 2020, Elche Club de Fútbol v Commission (T‑901/16, EU:T:2020:97, paragraphs 132 to 137), and of 12 March 2020, Valencia Club de Fútbol v Commission (T‑732/16, under appeal, EU:T:2020:98, paragraphs 134 to 136), on which the parties commented in response to a written question from the General Court. In that regard, suffice it to say that those judgments concern factual circumstances that are very different from those in the present case, in particular due to the existence of securities in favour of the creditor concerned, such as a pledge or a mortgage, which were likely to have a significant effect on the assessment of whether a guarantee premium, particularly under point 3.2(d) of the Guarantee Notice, was in line with market conditions.

62 Therefore, in the light of the factors taken into account in the second half of the grounds of recital 73 of the contested decision, the adequacy of the reasoning of which was definitively upheld by the judgment of 1 February 2018, Larko v Commission (T‑423/14, EU:T:2018:57, paragraphs 24 to 44), as endorsed by the judgment of 26 March 2020, Larko v Commission (C‑244/18 P, EU:C:2020:238, paragraphs 102 to 117 and 124), it must be concluded that, at the time that decision was adopted, the Commission possessed sufficient reliable and coherent evidence to consider, in recitals 74 and 77 of that decision, that the guarantee premium associated with measure No 2 was not in line with a market price, particularly on the grounds that the criteria in point 3.2(d) of the Guarantee Notice were not fulfilled, and therefore it constituted an advantage for the purposes of Article 107(1) TFEU.

63 Consequently, the first part of the first plea must be rejected, without it being necessary to rule on whether Larko was ‘a firm in difficulty’ in 2008, within the meaning of point 3.2(a) of the Guarantee Notice, read in conjunction with the definition set out in points 9 to 11 of the Guidelines on State aid for rescuing and restructuring, and whether the Greek authorities were or should have been aware that the relevant criteria of that definition were fulfilled at the time measure No 2 was granted.

64 The action must therefore be dismissed in its entirety.

Costs

65 Under Article 134(1) of the Rules of Procedure, 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 pay the costs, in accordance with the form of order sought by the Commission.

On those grounds,

THE GENERAL COURT (Third Chamber)

hereby:

1. Dismisses the action;

2. Orders Larko Geniki Metalleftiki kai Metallourgiki AE to pay its own costs and those incurred by the European Commission in Cases T‑423/14 and T‑423/14 RENV and in Case C‑244/18 P.

De Baere Kreuschitz Kecsmár

Delivered in open court in Luxembourg on 4 May 2022.

[Signatures]