Keywords

Summary



Keywords

1. State aid – Commission decision – Judicial review – Limits

(Arts 88 EC and 230 EC)

2. Procedure – Application initiating proceedings – Formal requirements

(Statute of the Court of Justice, Arts 21 and 53, first para.; Rules of Procedure of the General Court, Art. 44(1)(c))

3. State aid – Provisions of the Treaty – Scope ratione temporis – Accession of a new Member State to the European Union

(Arts 87 EC and 88 EC; Act of Accession 2003, Annex IV, Section 3)

4. State aid – Examination by the Commission – Private creditor test – Complex economic assessment – Judicial review – Limits

(Arts 87(1) EC and 88(2) EC)

5. State aid – Definition – Remission of debts granted by public bodies to a firm in difficulty

(Art. 87(1) EC)

6. State aid – Examination by the Commission – Administrative procedure – Obligation on the Commission to put the parties concerned on notice to submit their observations – Status of the aid recipient

(Art. 88(2) EC)

7. State aid – Prohibition – Exceptions – Discretion of the Commission – Possibility of adopting guidelines

(Art. 87(3)(c) EC; Commission Notice 1999/C 288/02)

Summary

1. In an action for annulment the legality of the measure concerned must be assessed in the light of the matters of fact and of law existing at the time when that measure was adopted. The legality of a decision concerning State aid is to be assessed in the light of the information available to the Commission when the decision was adopted. An applicant cannot therefore rely, before the Court, on matters of fact which were not put forward in the course of the pre‑litigation procedure laid down in Article 88 EC. Similarly, it cannot be complained that the Commission failed to take into account matters of fact or law which could have been submitted to it during the administrative procedure but which were not, as the Commission is under no obligation to consider, of its own motion and on the basis of prediction, what information might have been submitted to it.

(see paras 48-51)

2. Under the first paragraph of Article 21 of the Statute of the Court of Justice, applicable to the procedure before the General Court by virtue of the first paragraph of Article 53 thereof, and Article 44(1)(c) of the Rules of Procedure of the General Court, each application is required to state the subject-matter of the dispute and a summary of the pleas in law on which the application is based. It is necessary, for an action to be admissible, that the basic matters of law and fact relied on be indicated, at least in summary form, coherently and intelligibly in the application itself.

(see para. 59)

3. In order to determine whether the Commission has the competence to review an aid measure in relation to which some of the relevant events took place before the accession of the Member State concerned to the European Union, the relevant criterion to be applied is the legally binding act by which the competent national authority undertakes to grant aid.

As regards the partial remission by a Member State authority of the tax debt of an undertaking in difficulty in the context of an arrangement, a distinction must be drawn between a decision to refrain from initiating a bankruptcy procedure or a tax execution procedure and a decision to approve a proposed arrangement. Only the latter decision implies that the tax authority has waived its claims over the undertaking. While a decision of a creditor not to initiate a bankruptcy procedure or a tax execution procedure merely delays a possible forced recovery of the claim, a decision of that creditor to approve a proposed arrangement means, subject to confirmation of that arrangement by the competent court, that that creditor definitively waives all or part of that claim. Consequently, in order to ascertain whether the Commission has the competence to examine the aid measure in question, it is necessary only to determine at what point in time the tax authority adopted its decision to approve the proposed arrangement.

(see paras 68-72)

4. In so far as the Commission’s application of the test of a private creditor in a market economy involves complex economic appraisals, like the application of the test of a private investor in a market economy, when reviewing it the Court must confine itself to verifying whether the Commission complied with the relevant rules governing procedure and the statement of reasons, whether the facts have been accurately stated and whether there has been any manifest error of assessment of those facts or a misuse of powers. However, whilst the Commission has a margin of discretion with regard to economic matters, that does not mean that the Courts of the European Union must refrain from reviewing the Commission’s interpretation of information of an economic nature. Not only must the Courts of the European Union establish whether the evidence relied on is factually accurate, reliable and consistent but also whether that evidence contains all the information which must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it. However, when conducting such a review, the Courts of the European Union must not substitute their own economic assessment for that of the Commission.

(see paras 108-110)

5. A public body which has granted a debt remission should be compared to a private creditor who is seeking to obtain payment of sums owed to it by a debtor in financial difficulties. The status of creditor should be distinguished from that of a private investor in a market economy pursuing a structural policy – whether general or sectoral – guided by the longer-term prospects of profitability of the capital invested.

When a firm faced with a substantial deterioration of its financial situation proposes an agreement or series of agreements for debt arrangement to its creditors with a view to remedying the situation and avoiding liquidation, each creditor must make a decision having regard to the amount offered to it under the proposed agreement, on the one hand, and the amount it expects to be able to recover following possible liquidation of the firm, on the other. Its choice is influenced by a number of factors, such as the creditor’s status as a secured, preferential or ordinary creditor, the nature and extent of any security it may hold, its assessment of the chances of the firm being restored to viability, as well as the amount it would receive in the event of liquidation.

(see paras 114-115)

6. Under the procedure for reviewing State aid, the role of interested parties other than the Member State concerned is confined to providing the Commission with all the information needed to guide it with regard to its future action. Accordingly, they cannot themselves lay claim to an exchange of arguments with the Commission such as that initiated in regard to that Member State.

Moreover, of the interested parties, the recipient of the aid does not play a special role pursuant to any provision governing the procedure for the review of State aid. The procedure for the review of State aid is not a procedure initiated ‘against’ the recipient or recipients of aid by virtue of which it or they could rely on rights as extensive as the rights of the defence as such.

Furthermore, the legality of the contested decision is to be assessed in the light of the information available to the Commission when the decision was adopted and it is for the Member State concerned and, where appropriate, the recipient of the aid to adduce evidence to show that the aid is compatible with the common market and, if necessary, to plead specific circumstances relating to recovery of the aid already paid should the Commission require its repayment.

(see paras 178-180)

7. Pursuant to Article 87(3)(c) EC, ‘aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest’ may be considered to be compatible with the common market. Moreover, in accordance with settled case-law, Article 87(3) EC confers on the Commission a wide discretion to allow aid by way of derogation from the general prohibition laid down in Article 87(1) EC, since the determination in such a case of the question whether State aid is or is not compatible with the common market raises problems which presuppose the examination and appraisal of complex economic facts and conditions which may be liable to change rapidly. Since it is not for the Courts of the European Union to substitute their own assessment of the facts, particularly the economic circumstances, for that of the author of the decision, the Court must, in such a context, confine its review to determining whether the Commission complied with the rules governing procedure and the provision of the statement of reasons, whether the facts are accurately stated and whether there has been any manifest error of assessment or misuse of powers.

The Commission may adopt a policy as to how it will exercise its discretion in the form of measures such as guidelines, in so far as those measures contain rules indicating the approach which the institution is to take and do not depart from the rules of the Treaty. As regards State aid for rescuing and restructuring firms in difficulty, it is clear from paragraph 31 of the 1999 Guidelines that, in order to be declared compatible with Article 87(3)(c) EC, individual aid to undertakings in difficulty must be bound to a restructuring programme which has been endorsed by the Commission. Moreover, under paragraphs 32 to 40 of the 1999 Guidelines, the restructuring plan, the duration of which must be as short as possible, must inter alia restore the long‑term viability of the firm within a reasonable timescale and on the basis of realistic assumptions as to future operating conditions, whilst limiting the amount and intensity of the aid to the strict minimum. In addition, in accordance with paragraphs 43 and 45 of the 1999 Guidelines, the company concerned must fully implement the restructuring plan as accepted by the Commission. That implementation and the satisfactory progress of the plan must be monitored by the Commission, to which detailed annual reports must be submitted. In the absence of a credible restructuring plan, the Commission is justified in refusing to authorise the aid in question.

(see paras 225-229, 231)