WRITTEN QUESTION P-3439/00

by Werner Langen (PPE-DE) to the Commission

(30 October 2000)

Subject: Distillation of alcohol intended for human consumption

The Rheinland-Pfalz Land Government has announced that it intends to provide a subsidy of DEM 15 million to increase the volume of alcohol for human consumption which is distilled.

Will the Commission say:

1. Has it received a request from the Federal Republic of Germany notifying it of this subsidy provided by the Land in question? If so, when?

2. What is the correct procedure for submitting an application of this kind and what form does the notification procedure take?

3. How long does it take as a rule for a decision to be taken from the day on which the application is submitted to the Commission?

4. What decision will it be taking in this specific case?

5. What is the basic legal position towards a national subsidy of this kind to supplement an EU programme?

Answer given by Mr Fischler on behalf of the Commission

(21 November 2000)

The Commission is currently examining a notification of a state aid which Rheinland-Pfalz intends to grant to tackle problems caused by a higher than expected wine production, which has lead to low prices and created storage problems. A state aid to promote distillation would be granted on the basis of Article 29 of Council Regulation (EC) No 1493/1999 of 17 May 1999 on the common organisation of the market in wine(1) in addition to the Community aid, up to a total aid level of maximum 50 DEM/hl. The measure has been notified by letter of 26 September 2000, registered on 29 September 2000.

1. The formal requirements and the procedure to be followed are laid down in Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 [now Article 88] of the EC Treaty(2).

2. A decision shall be taken within two months. The two-month period begins on the day following the receipt of a complete notification. The notification will be considered as complete if, within two months from its receipt, or from the receipt of any additional information requested, the Commission does not request any further information (cf. Article 4(5) of Council Regulation (EC) No 659/1999).

3. At this stage, the Commission has not yet taken a position on the proposed aid scheme. Therefore, it cannot yet indicate what its decision in this case will be.

4. According to the established case law of the court, the existence of a common organization of the market precludes national measures in the areas covered unless the Community legislation provides otherwise. The court has moreover repeatedly ruled that once a common organization of the market has been established, Member States must refrain from taking any measures which might derogate from or harm that organization(3). The basic criterion for assessing the lawfulness of national measures is thus whether the exercise of the residual power resting with the Member States affects or may affect the proper functioning of the common market organization. This principle will guide the Commission in the assessment of the proposed state aid measure.

(1) OJ L 179, 14.7.1999.

(2) OJ L 83, 27.3.1999.

(3) See, for example, Case 111/76 Officier van Justitie v. Van den Hazel (1977) ECR 901; Case 177/78 Pigs and Bacon Commission v. McCarren (1979) ECR 2161; Case 190/73, Van Haaster, (1974) ECR p. 1123.