WRITTEN QUESTION E-2231/02

by Charles Tannock (PPE-DE) to the Commission

(23 July 2002)

Subject: Rules governing the provision and withdrawal of state aid, with particular reference to Mecklenburger Metallguss

In its answer to Written Question E-1253/02(1), the Commission briefly outlined the justification for allowing Member States to grant aid for the rescuing and restructuring of companies. The Commission states that the aid should not distort competition in the market, adding that the restructuring of the German company Mecklenburger Metallguss was, at the time, not considered to create undue distortions of competition and that the Commission was not in possession of any information indicating that Mecklenburger Metallguss might have received any aid other than that approved in the 1999 decision.

Regarding challenges to a Commission Decision to authorise state aid, the Commission confirms that an interested party must challenge the decision within two months, adding that the Commission has the power to revoke its own decision where the decision was based on incorrect information that was provided during the procedure and that was a determining factor in the decision.

Is this the only basis on which the Commission can revoke its own decision, or is the Commission entitled to take into account any distorting effect on competition that may have taken place following the provision of state aid, even if the original Commission Decision to authorise the aid was reasonable at the time and based on correct information? Does not the Commission believe that it should have this power if the principle that the aid should not distort competition in the market referred to above is to be maintained and that absence of such discretionary power may run the risk of actually distorting competition, given that the Commission is not in a position to be sure of the effect which an authorisation of state aid will have in any particular economic sector over a period of time? Does the Commission believe that the requirement that an interested party must challenge the Commission's Decision within two months is reasonable, does it inform all interested parties of its decision at the time it is announced, and does it allow any interested parties wishing to challenge a Commission Decision access to all the principal relevant facts available to the Commission when that decision is made?

Even if a Commission Decision can be challenged only within two months under Article 230 of the EC Treaty, does the Commission accept that a market distortion which only arose later, if uncorrected by the Commission, would be in breach of the Treaties and liable to challenge under Article 232 of the EC Treaty?

(1) OJ C 92 E, 17.4.2003, p. 43.

Answer given by Mr Monti on behalf of the Commission

(16 September 2002)

According to the Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty(1) there are three ways to revise a Commission decision approving an individual aid measure:

(i) where the decision was based on incorrect information provided during the procedure which was a determining factor for the decision, the original decision can be revoked,

(ii) where there is misuse of aid, i.e., aid used by the beneficiary in contravention of the earlier Commission decision, the Commission may open a formal investigation procedure,

(iii) the Commission decision may be challenged before the Tribunal or Court within a period of two months after publication of the measure.

Where the Commission has serious doubts as to whether decisions not to raise objections, positive decisions or conditional decisions with regard to individual aid are complied with, it has the right to undertake on-site monitoring visits.

The two months period, starting at the date of publication in the Official Journal for bringing a challenge against Commission decisions is provided for by the EC Treaty.

The Commission gives a very broad dissemination to state aid decisions. A summary information sheet is published in the Official Journal with a reference to the full text of the decision which is then made available on the internet. In cases where the Commission initiated the formal investigation procedure, all third parties who provided comments on the decision to initiate this procedure, will receive a copy of the final decision. Final decisions are published in full in the Official Journal. All information is also available on the Directorate General Competition's website. Finally, for cases which have a wider impact, press releases will be made. In the area of state aid, 87 press releases were made in the year 2001.

Furthermore, any interested party may inform the Commission of any alleged unlawful aid and any alleged misuse of aid. Where the Commission takes a decision on a case concerning the subject matter of the information supplied, it would send a copy of that decision to the interested party.

All the principal relevant facts forming the basis of the assessment of the Commission are mentioned in the Commission decision, as required under Article 253 of the EC Treaty and Article 6(1) of Council Regulation (EC) No 659/1999.

A procedure for failure to act under Article 232 of the EC Treaty is not possible for an individual aid where a market distortion would have arisen only later.

(1) OJ L 83, 27.3.1999.