Keywords

Summary



Keywords

1. State aid - Definition - National legislative provisions applying to all undertakings subject to a court-supervised recovery scheme - Included

(EC Treaty, Art. 92(1) (now, after amendment, Art. 87(1) EC))

2. State aid - Commission decision finding aid to be incompatible with the common market and ordering it to be repaid - Commission's power to leave it to national authorities to calculate the exact amount to be repaid

(EC Treaty, Art. 93(2) (now Article 88(2) EC))

3. State aid - Recovery of unlawful aid - Application of national law - Conditions and limits - National legislative provisions precluding the payment of interest in the case of undertakings declared insolvent - Whether permissible

(EC Treaty, Art. 93(2) (now Article 88(2) EC))

Summary

1. Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC) does not distinguish between measures of State intervention by reference to their causes or aims but defines them in relation to their effects.

The mere fact that national legislative provisions are applicable to any enterprise subject to a court-supervised recovery scheme, or which has contracted debts to Social Security and the Treasury, is not therefore sufficient to enable measures taken by the competent authorities of a Member State with regard to an undertaking subject to such a procedure automatically to escape being categorised as aid within the meaning of Article 92 of the Treaty.

It is true that the possible loss of tax revenue for the State as a result of the application to an undertaking of legislation on court-supervised recovery schemes and insolvency does not in itself justify treating that legislation as aid. Such a consequence is an inherent feature of any statutory system laying down a framework for relations between an insolvent undertaking and the general body of its creditors, and the existence of an additional financial burden borne directly or indirectly by the public authorities as a means of granting a particular advantage to the undertakings concerned may not automatically be inferred from it.

Nevertheless, such an advantage may arise as a result of certain measures being taken or even as a result of the relevant authorities not taking measures in a particular set of circumstances. That is the case where an undertaking has been able for several years to continue trading without complying with its tax and social security obligations.

( see paras 16-20 )

2. No provision of Community law requires the Commission, when ordering the recovery of aid declared incompatible with the common market, to fix the exact amount of the aid to be recovered. It is sufficient for the Commission's decision to include information enabling the recipient to work out himself, without overmuch difficulty, that amount. The Commission may, therefore, legitimately confine itself to declaring that there is an obligation to repay the aid in question and leave it to the national authorities to calculate the exact amount of aid to be repaid where that calculation requires tax and social security systems, the detailed rules of which are laid down in the applicable national legislative provisions, to be taken into account.

( see paras 25-26 )

3. Although the recovery of unlawfully granted aid, intended to re-establish the previously existing situation, must in principle take place in accordance with the relevant procedural provisions of national law, those provisions are to be applied in such a way that the recovery required by Community law is not rendered practically impossible.

The objective of re-establishing the previously existing situation is attained once the aid in question, increased where appropriate by default interest, has been repaid by the recipient, which thereby forfeits the advantage which it enjoyed over its competitors.

The national legislation applicable in the present case provides that the debts of undertakings which have been declared insolvent cease to produce interest with effect from the date of the relevant declaration. Such a rule, justified by the common interest of all the creditors in not burdening the insolvent undertaking's assets with new debts likely to worsen the situation, applies to all creditors alike, private or public, in all procedures of this kind.

Taking account of the legislation's objective, the absence of any discrimination in its application and the fact that it applies only to interest falling due after the declaration of insolvency on aid unlawfully received before that declaration, the legislation cannot be regarded as rendering the recovery of aid required by Community law virtually impossible.

( see paras 34-37 )