Case T‑457/09

Westfälisch-Lippischer Sparkassen- und Giroverband

v

European Commission

‛State aid — Restructuring of WestLB — Aid to remedy a serious disturbance in the economy of a Member State — Article 87(3)(b) EC — Decision declaring the aid compatible with the common market under certain conditions — Action for annulment — Individual concern — Legal interest in bringing proceedings — Admissibility — Collegiality — Obligation to state reasons — Guidelines on State aid for rescuing and restructuring firms in difficulty — Proportionality — Principle of non-discrimination — Article 295 EC — Article 7(4) of Regulation (EC) No 659/1999’

Summary — Judgment of the General Court (First Chamber, Extended Composition), 17 July 2014

State aid — Prohibition — Exceptions — Aid which may be considered compatible with the common market — Decision declaring restructuring aid for an undertaking compatible with the common market on certain conditions — Obligation to sell the undertaking receiving the aid — Compliance with the property regime in the Member States — No infringement

State aid — Prohibition — Exceptions — Aid which may be considered compatible with the common market — Assessment in the light of Article 87 EC — Possibility of the Commission taking account of the development of the common market in relation to a previous decision

State aid — Prohibition — Exceptions — Decision on aid for restructuring firms in difficulty — Decision declaring the aid compatible with the common market on certain conditions laid down by the restructuring plan — Breach of the principle of equal treatment — Absence/Lack/None (or combine with previous headwords)

State aid — Prohibition — Exceptions — Aid which may be considered compatible with the common market — Aid for restructuring firms in difficulty — Decision declaring the aid compatible with the common market on certain conditions laid down by the restructuring plan — Observance of the principle of proportionality — Scope

Acts of the institutions — Statement of reasons — Obligation — Scope — Commission decision on State aid — Decision on aid for restructuring firms in difficulty — Decision declaring the aid compatible with the common market on certain conditions laid down by the restructuring plan — No obligation to explain the need for each condition

Acts of the institutions — Statement of reasons — Obligation — Scope — Commission decision on State aid — Characterising of the adverse effect on competition and of the affecting of trade between Member States — Reference to the statement of reasons contained in the provisional decision — Lawfulness

State aid — Prohibition — Exceptions — Aid which may be considered compatible with the common market — Aid to remedy serious disturbance in the economy of a Member State — Aid in favour of a bank in difficulty with systemic importance — Examination of the aid in the light of the rescue and restructuring guidelines — Lawfulness

State aid — Prohibition — Exceptions — Aid which may be considered compatible with the common market — Aid to remedy serious disturbance in the economy of a Member State — Made subject to authorisation of the aid on certain conditions — Lawfulness

Actions for annulment — Natural or legal persons — Measures of direct and individual concern to them — Individual concern — Criteria — Commission decision declaring aid compatible with the common market under certain conditions — Action by a shareholder of the aid beneficiary — Interest in bringing proceedings distinct from that of the undertaking receiving the aid — Admissibility

Actions for annulment — Natural or legal persons — Measures of direct and individual concern to them — Individual concern — Criteria — Commission decision declaring aid compatible with the common market under certain conditions — Action by a group of savings banks, having legal personality — No capacity as aid provider — Inadmissibility

See the text of the decision. (see paras 83-109)

An applicant must show that it has a legal interest in bringing proceedings separate from that possessed by a company which it partly controls and which is concerned by a European Union measure. Otherwise, in order to defend its interests in relation to that measure, its only remedy lies in the exercise of its rights as a member of the company which itself has a right of action. In the case of a Commission decision declaring State aid to a bank compatible with the common market under certain conditions, the interest in bringing an action of the shareholders of the beneficiary bank coincides with that of the bank in so far as the decision requires the bank to reduce its balance sheet, so that the shareholders are not individually concerned in that regard. However, the bank’s shareholders are individually concerned by that decision in so far as authorisation of the aid is made subject to those shareholders complying with the obligation to sell the bank to an independent third party. (see paras 112, 120)

There is no longer any need to adjudicate on a claim for annulment in the event that an applicant has, on account of an event occurring since the action was brought, lost all legal interest in having the contested measure annulled, which means that the annulment of that measure is, of itself, no longer capable of having legal consequences. However, an applicant may continue to have an interest in securing the annulment of a measure which has been repealed, in so far as a repeal does not give rise to the same legal effects as annulment by the General Court. The repeal of a measure of an institution does not amount to recognition of its illegality and takes effect ex nunc, whereas its annulment would take effect ex tunc. In that context, an applicant may retain an interest in seeking the annulment of an act which is not enforced and which directly affects him in order to obtain a finding, by the EU judicature, that an unlawful act has been committed against him, so that such a finding can then be the basis for any action for damages aimed at properly restoring the damage caused by the contested act. (see paras 130, 131, 137)

See the text of the decision. (see paras 160, 161)

See the text of the decision. (see paras 164-173)

See the text of the decision. (see paras 181-186)

See the text of the decision. (see paras 190, 191)

The Commission’s guidelines on the rescue and restructuring of undertakings in difficulty may be considered as being, in principle, suitable for assessing the compatibility of that aid with the common market, in particular if the beneficiaries are banks of systemic importance whose economic viability was compromised to the point of jeopardising their existence. Thus, on the one hand, the fact that such aid is necessary to remedy a serious disturbance in an economy does not mean that it cannot be regarded as aid to a firm in difficulty, as provided for in paragraph 9 of the rescue and restructuring guidelines, according to which such a firm is one which is unable, whether through its own resources or with the funds it is able to obtain from its owner-shareholders or creditors, to stem losses which, without outside intervention by the public authorities, will almost certainly condemn it to going out of business in the short or medium term. As a matter of principle, a bank whose economic viability is compromised to the point of jeopardising its existence may be regarded as a firm in difficulty. Moreover, the rescue and restructuring guidelines require, in order for restructuring aid to be considered compatible with the common market, that the beneficiary be subject to a restructuring plan enabling it to be restored to long-term viability within a reasonable timescale, that the aid be accompanied by measures to avoid undue distortions of competition and that it be limited to the strict minimum of the restructuring costs. However, the Commission is entitled to require that the authorisation of aid granted to banks of systemic importance, on account of the financial crisis, must be subject to the fulfilment of those conditions, even if the aid is intended to remedy a serious disturbance in the economy of a Member State. (see paras 195-197)

Article 87(1) EC prohibits aid which affects trade between Member States and which distorts or threatens to distort competition. However, as the Commission correctly argues, in assessing those two conditions, the Commission is required, not to establish that such aid has a real effect on trade between Member States and that competition is actually being distorted, but only to examine whether that aid is liable to affect such trade and distort competition. Therefore, the fact that the Commission has not adduced, in the contested decision, evidence of distortions of competition resulting from the guarantee at issue cannot constitute either an infringement of Article 87(1) EC or an infringement of its obligation to state reasons. The only relevant questions are, on the one hand, whether the Commission stated, in that decision, the reasons why that guarantee was liable to result in such distortion and, on the other hand, if so, whether the applicant has succeeded in showing that those reasons are incorrect. As regards the statement of reasons for the classification of a State measure as aid within the meaning of Article 87(1) EC and, therefore, necessarily concerning the question whether that measure was liable to distort competition, the Commission may confine itself to referring, in the final decision, to the statement of reasons contained in a provisional decision, provided: (1) that the Member State acknowledged in its notification that the measure in question constituted State aid and did not challenge that classification after the adoption of the provisional decision; and (2) that those two decisions were adopted in a related and sufficiently similar factual and legal context. Consequently, in such a case, the Commission is not necessarily required to carry out a further examination of the competitive situation existing on the date that it adopts the final decision which continues to classify the same measure as State aid. Moreover, the statement of reasons for a decision classifying as State aid restructuring aid for an undertaking with significant cross-border activities, which operates in a sector that has been liberalised within in the Union and which could have disappeared from the market if the aid had not been granted may be particularly succinct. (see paras 228, 229, 235, 240, 241, 243, 254, 259)

In the context a decision authorising restructuring aid, it is, in particular, for the Commission, first, to establish that the authorised measure must actually be classified as State aid within the meaning of Article 87(1) EC, secondly, to ensure that the Member State concerned has established that the aid could benefit from one of the derogations referred to in Article 87(3) EC and, thirdly, to find that, in the light of all of the measures provided for by the restructuring plan to which that Member State has committed itself, it is possible to consider that the beneficiary of the aid will be viable in the long term and that the aid will not cause undue distortions of competition. However, the Commission is not required to explain the need for each measure provided for by the restructuring plan or to seek to impose only the least restrictive measures possible among those likely to ensure the attainment of the objectives referred to in the preceding paragraph, unless either the Member State concerned has previously committed itself to a less restrictive restructuring plan, fulfilling those objectives in an equally appropriate manner, or that Member State has shown its opposition to the inclusion of certain measures in the restructuring plan and committed itself to that plan because the Commission had definitively informed it that the aid would not be authorised in the absence of those measures, since in those situations the decision to make the granting of the aid subject to compliance with those measures cannot be attributed to the Member State. Those principles also apply where the Commission decides, under Article 7(4) of Regulation No 659/1999, to attach to a decision authorising restructuring aid a condition which reflects a measure envisaged by the restructuring plan which the Member State concerned undertook. Consequently, where it adopts such a decision, the Commission’s obligation to state reasons, concerning the necessity of making authorisation of the guarantee at issue subject to the conditions provided for by the final restructuring plan to ensure the long-term viability of the aid beneficiary, consists in stating the reasons why it considers that compliance with that plan is sufficient to achieve the realisation of that objective. However, there is no need to examine in isolation the reasoning in the contested decision relating to each of the conditions laid down by the restructuring plan and included in the decision. (see paras 296, 297, 303, 304, 317, 318)

With regard to a decision declaring restructuring aid compatible with the common market under conditions also laid down in the restructuring plan, application of the principle of proportionality by the Commission in that context is confined to determining, first, that the restructuring plan to which the Member State concerned has committed itself suggests that the beneficiary of the aid will be viable in the long term and that undue distortions of competition will be avoided and, secondly, that the Member State concerned has not committed itself to a plan containing less onerous measures adequately ensuring that economic viability and avoiding those distortions. (see para. 350)

Compliance with the principle of equal treatment requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified. In that regard, the fact that authorisation of restructuring aid is made subject to compliance with the measures provided for by the restructuring plan to which the Member State concerned has committed itself cannot result in an infringement of the principle of equal treatment. Indeed, in the event that the authorisation of two comparable restructuring aid measures is made subject to different conditions, which are provided for in restructuring plans to which the Member States concerned had respectively committed themselves, the different situations in which the beneficiaries of the aid would find themselves would be a result not of a choice by the Commission but of the nature of the respective commitments made by those Member States, since the Commission was required to consider whether they were adequate to ensure the restoration of the beneficiaries to viability and to avoid undue distortions of competition. (see paras 364, 370, 371)

It is only in the context of Article 87(3)(b) EC that it is necessary to assess the legality of a Commission decision declaring that new aid does not fulfil the requirements for application of that derogation, and not in the light of its previous decision-making practice, assuming that the latter is established. The concept of State aid and the conditions necessary for ensuring the restoration of the beneficiary’s viability reflect an objective situation which must be appraised on the date on which the Commission takes its decision. Thus, the Commission’s reasons for having made a different appraisal of the situation in an earlier decision must remain immaterial to the appraisal of the lawfulness of the contested decision. Moreover, the Commission cannot be deprived of the opportunity to set compatibility conditions stricter than those in previous decisions if so required by the development of the common market and the objective of undistorted competition within that market, and there is no legitimate reason for traders to entertain a legitimate expectation that an existing situation which is capable of being altered by the EU institutions in the exercise of their discretionary power will be maintained. (see paras 368, 369)

See the text of the decision. (see para. 372)