1999/157/EC: Commission Decision of 22 April 1998 on State aid for Triptis Porzellan GmbH (in liquidation), Thuringia (notified under document number C(1998) 1324) (Only the German text is authentic) (Text with EEA relevance)
Date: 1998-04-22
Institutions: European Commission
Subjects: Germany, State aid, Thuringia, aid to undertakings, ceramics, redemption

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 22 April 1998

on State aid for Triptis Porzellan GmbH (in liquidation), Thuringia

(notified under document number C(1998) 1324)

(Only the German text is authentic)

(Text with EEA relevance)

(1999/157/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community, and in particular the first subparagraph of
Article 93(2) thereof,

Having regard to the Agreement on the European
Economic Area, and in particular Article 62(1)(a) thereof,

Having given the parties concerned the opportunity to
submit their comments, in accordance with the aforemen-
tioned Articles,

Having regard to the comments received,

Whereas:

I

By letter dated 30 May 1997 the Commission informed
the German Government of its decision to initiate Article
92(3) proceedings against aid for Triptis Porzellan GmbH,
Thuringia
and
requested it to submit its comments.

referred to as

(hereinafter

‘Triptis'),

The other Member States and interested parties were
informed of the opening of proceedings and were invited
to submit their comments, by way of a notice published
in the Official Journal of the European Communities (1).

(1) OJ C 250, 15. 8. 1997, p. 3.

Germany gave its comments by letter dated 11 July (regis-
tered the same day). The Commission requested further
information in its letters dated 28 July and 5 August, to
which the German Government replied by letters dated
29 August (registered on 12 September) and 8 September
(registered on 9 September). The case was discussed with
the German authorities on 18 and 19 September in
Berlin.

By letter dated 15 September 1997,
the Commission
received comments from a Spanish competitor. The trans-
lation of these comments was transmitted to Germany by
letter dated 27 October. Germany replied to them by
letter dated 1 December (registered on 2 December 1997).

II

Triptis Porzellan GmbH, Thuringia (‘Triptis'), a German
porcelain manufacturer, was founded in 1891 under the
name Unger & Gretschel. The enterprise was located in
the eastern Land of Thuringia.

In the former GDR, the State-owned VEB Porzellanwerk
the fine ceramics
Triptis porcelain formed part of
conglomerate Kahla (Kombinat Feinkeramik Kahla). It
had neither its own trade mark, nor its own distribution
system.

On 1 July 1990, when the THA (Treuhandanstalt) took
over the VEB Porzellanwerk Triptis, there were about 900
employees.

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The restructuring of Triptis started with the firm’s privati-
sation in September 1993. When opening proceedings,
the Commission expressed doubts as to the procedure
followed for privatisation.

In the context of privatisation the company received
extensive aid (totalling DEM 34,7 million in loans relin-
it covered by the Treuhandregime, a
quished), all of
scheme approved by the Commission (1). After privatisa-
tion the enterprise not only had to be rebuilt, but because
of the disappearance of the East European markets had
also to develop a selling and distribution system in new
the
markets. Therefore immediately after privatisation,
enterprise made a difficult operational start and acquired
high liabilities.

In early 1995 the management realised that the restruc-
turing of the enterprise could not be carried out success-
fully with its own financial resources. The Bundesanstalt
vereinigungsbedingter Sonderaufgaben (BvS) was there-
fore asked for financial support. The aid took the form of
a loan of DEM 8 million (plus interest) which was granted
by the BvS under a ‘concerted action'. Repayment of this
loan was later waived. The Commission was notified of
this loan at the time when repayment was waived. All the
parties involved (investors, workers, BvS) made efforts to
rescue the company. In this context the Hessische Land-
esbank (HeLaBa) waived repayment of DEM 10 million of
a larger debt package.

On 30 April 1997 the Commission decided to initiate
Article 93(2) proceedings against the State aid granted to
Triptis. The Commission concluded that the BvS loan of
DEM 8 million (plus interest) constituted aid of which the
Commission should have been notified at the time it was
granted, pursuant to Article 93(3) of the Treaty. There was
also the question of whether HeLaBa’s waiving of the
repayment of DEM 10 million constituted ‘aid' within the
meaning of Article 92(1) of the EC Treaty.

The two particular reasons for which the proceedings
were opened were:

(1) as the Hessische Landesbank is State-owned,

the
Commission expressed doubts as to whether it had
really acted as a private banker in waiving repayment
of the loan. For this reason, there was still uncertainty
as regards the exact amount of the aid granted. This
problem was to be settled within the proceedings;

(1) E15/92 (not published): of

the total DEM 34,71 million in
waived loans, DEM 19,26 million was intended to safeguard
liquidity, DEM 7,25 million was for investment purposes and
DEM 8,2 million to cover losses. As the company did not
reach the thresholds laid down by the Treuhandregime of
1 500 employees and DEM 150 million in financial liabilities,
individual notification was not necessary.

(2) Triptis produced in a market which suffers from
severe overcapacity. Under the overall restructuring
process the company was reducing its capacity by
50 %, but there were no plans for further capacity
reduction in relation to the new aid. In view of the
severe overcapacity in the porcelain sector, it could be
argued that the aid to Triptis distorted competition
unduly and damaged competitors that received no aid.
In other cases in the same sector, competitors have
objected to possible aid.

This led to serious doubts as to whether the aid was
compatible with the derogations laid down in Article
92(3)(a) and (c) of the EC Treaty, and in particular with
the ‘Community Guidelines on State aid for rescuing
and restructuring firms in difficulty' (2).

The Commission at no point expressed doubts
concerning the viability of the company.

III

It was only by letter dated 11 July 1997 that Germany
informed the Commission that the special
insolvency
proceedings for enterprises in the new L(cid:132)nder (Gesamt-
vollstreckungsverfahren) had been commenced on 30
April 1997. By its own account, the German Government
did not learn of these proceedings until July. For this
reason, Germany also intended to withdraw the noti-
fication of the aid.

By letter dated 28 July 1997, the German authorities were
informed that it was not possible to withdraw the noti-
fication, because the aid had been granted before its noti-
fication in July and September 1996 and the Article 93(2)
proceedings with regard to these aid measures had already
been initiated. Germany was also told that the Commis-
sion had based its assessment on the date on which aid
had been granted and that therefore the fact that the aid
insolvency proceedings
had been listed in the special
made no difference.

The information submitted on 8 September 1997 shows
that the DEM 10 million loan, repayment of which was
waived by HeLaBa under
the concerted action, was
secured by a 90 % guarantee from Thuringia. This guar-
antee had not been notified and must
therefore be
regarded as unlawful. After HeLaBa had waived the loan,
it invoked the Thuringian guarantee, and as a result was
paid 90 % of the original loan amount (DEM 9 million).
Since both the repayment waiver and the guarantee
payment had taken place as far back as 1996, neither
HeLaBa nor Thuringia laid claim to the loan or the
guarantee as part of the special insolvency proceedings.

(2) OJ C 368, 23. 12. 1994, p. 12.

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In addition, in 1993 and 1994 Thuringia had taken on
guarantees in relation to HeLaBa (to secure 90 % of the
total loan amount) for loans totalling DEM 26,75 million,
without notifying the Commission thereof. These guaran-
tees were awarded by the Thuringian Ministry of Finance
in the course of the privatisation, and related to invest-
ment credits of DEM 14,75 million and DEM 5 million
and guarantees for operating funds of DEM 7 million.
This amount already includes the 90 % guarantee for the
DEM 10 million loan which was waived in 1996. Since
Thuringia had already paid out this guarantee (totalling
DEM 9 million) to HeLaBa, this amount must also be
taken into account in the assessment of aid.

HeLaBa laid claim to the remaining loans, totalling DEM
16,75 million, under the special insolvency proceedings,
but it is unlikely that much of this amount will be settled
within this procedure. Consequently it is virtually certain
that
the corresponding guarantees will be used for
payment. Therefore the assessment takes into account the
total amount of the unlawfully granted guarantees, rep-
resenting an aid amount of DEM 24,075 million.

By letter dated 1 December 1997 with which the German
authorities reacted to the initiation of proceedings, they
submitted the information that as part of the special
insolvency proceedings the BvS had given notice of a
DEM 8,75 million penalty for employment guarantees, a
DEM 2,685 million penalty for inability to demonstrate
proper application of reserve funds and the loan amount
of DEM 8 million (plus interest), repayment of which was
waived in the concerted action.

IV

After the Triptis insolvency, the receiver tried to find a
buyer to whom the fixed assets of the company could be
sold as part of a second privatisation so that the company
would continue in operation (Auffangl(cid:148)sung). The
company was offered to various porcelain manufacturers
in Germany and Europe, and outside Europe, and the
Treuhandanstalt (THA) received 13 bids. The contract was
concluded with the investor who submitted the best busi-
ness plan and made the best offer.

In the end, only two interested parties remained, the
German company Winterling Porzellan AG of Kirchenla-
mitz, and the French company Medard de Noblat of
Limoges. On 18 June 1997 the fixed assets of Triptis
GmbH (in liquidation) were sold to Winterling for DEM

2,5 million. Winterling also offered an investment guar-
antee of DEM 8 million and the maintenance of 160 jobs.
The Winterling offer was therefore held to be the better,
because Medart de Noblat offered to pay just DEM 1,
promised investment of DEM 4 million and would give
no employment guarantee.

As regards capacity reduction, there is information to the
effect that in 1996 capacity amounted to 3 000 tonnes
and utilisation was 2 300 tonnes on five working days.
There are no plans for the ‘new' Triptis to cut its capacity
further: it will remain at 3 000 tonnes with utilisation
reaching 2 880 tonnes on seven working days.

Although the new company will not receive any restruc-
turing aid, Thuringia is planning to grant resources from
the joint Federal/L(cid:132)nder programme (GA-Mittel) for new
investment under the approved twenty-sixth outline plan
for the joint Federal/L(cid:132)nder programme (1).

V

By letter dated 16 December 1997, the Commission sent
the German authorities the comments of third parties,
namely of one Spanish competitor, which it had received
after
the decision to initiate proceedings had been
published.

The Spanish competitor expressed concern about
the
effects on the European porcelain market if Triptis were
to be restructured with State financial support. It argued
that Triptis would have a considerable advantage because
the competitor would have to finance restructuring meas-
ures out of its own resources whereas Triptis was receiving
State aid to do so. This would seriously affect competition
in a market where overcapacity was enormous and would
damage competitors which did not
receive financial
support from the state. The competitor also argued that
the flexibility with which the Commission can act as
regards the question of capacity reduction in assisted areas
would enable it to avoid any capacity reduction altogether.
For this reason restructuring aid must always be tied to
capacity reduction. The competitor could therefore only
agree to a smaller reduction. The third argument was that
Triptis was planning to increase its export share from
20 % to 38 % which, in view of the overcapacity which
already existed on the market, would be to the detriment
of its West European competitors.

VI

By letter dated 1 December 1997, the German authorities
replied to the Spanish competitor’s comments.

The letter confirmed that HeLaBa was laying claim to
DEM 16,75 million under the special insolvency proceed-
ings, whereas Thuringia was not claiming the DEM 9
million which were requested by HeLaBa on basis of the
guarantee.

(1) N 123/97.

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The BvS was claiming a total amount of DEM 19 717 567
(DEM 8,75 million as a penalty for employment guaran-
tees, DEM 2,685 million as a penalty for inability to
demonstrate proper application of reserve funds and DEM
8 million (plus interest) representing the waiver of repay-
ment).

On the question of capacity, the letter referred to the
notification, which had already mentioned a capacity
reduction from 6 500 tonnes to 3 000 tonnes since priva-
tisation in 1993; but it repeated that for the future there
were no plans for further capacity reduction in relation to
the new aid.

VII

The Article 93(2) proceedings confirmed the Commis-
sion’s view that the BvS loan of DEM 8 million (plus
interest) must be regarded as aid within the meaning of
Article 92(1) of the EC Treaty and is not compatible with
the derogations laid down in Article 92(3), and in partic-
ular with the ‘Guidelines on State aid for rescuing and
restructuring firms in difficulty', the only basis on which
the aid could have been approved.

The same applies to Thuringia’s unlawful guarantees of
DEM 26,75 million which were revealed in the course of
the proceedings.

It is further established that HeLaBa’s waiver of repay-
ment of the DEM 10 million loan under concerted action
does not in itself constitute aid within the meaning of
Article 92(1) of the EC Treaty, as the loan was secured by
a 90 % State guarantee. Such a guarantee shifts the risk
which a bank runs in lending to a company (irrespective
of whether the company is in difficulty or not) almost
entirely to the public authorities, leaving almost no risk
for the bank itself.

(1) The amount of DEM 8 million (plus interest) granted
to Triptis in the form of a loan on which the interest
rate was 4,4 % is undoubtedly aid within the meaning
of Article 92(1) of the EC Treaty and Article 61(1) of
the EEA Agreement. Since the company had been in
difficulties since its privatisation in 1993, no private
bank or private investor would have granted a loan at
less than the market interest rate, which in 1996 stood
at 7,33 %. The difficulties were mostly rooted in the
late privatisation, because no private investor could be

found before then, so that no restructuring plan could
be developed and implemented. As a result the neces-
sary investments were delayed and the company
acquired high liabilities while having to continue
inefficient production with its obsolete equipment.

The DEM 8 million loan (plus interest) was then
waived under the concerted action. The aid intensity
was already around 100 % because the company was
in difficulties within the meaning of the Commission
communication to the Member States on the applica-
tion of Articles 92 and 93 of the EC Treaty to public
undertakings (1). Consequently, the waiver of the loan
does not increase the aid intensity.

(2) Thuringia’s guarantees of DEM 26,75 million (in
several
instalments) must also be regarded as aid
within the meaning of Article 92(1) of the EC Treaty.
The aid element deriving from such a guarantee is
generally equal to the difference between the interest
rate on a loan raised on normal market terms and the
actual interest rate secured by virtue of the guarantee.
The Commission has consistently taken the view, as
for example in Decision 94/696/EC (2), that whenever,
because of an undertaking’s severe financial circum-
stances, no credit institution would be prepared to
lend to it without a State guarantee, the whole amount
of the loan is to be regarded as aid. Since in this case
the guarantee is for 90 %, the aid granted amounts to
DEM 24,075 million.

As regards the aid awarded to Triptis, it could be
assumed that it would probably distort competition
and affect
trade between Member States. Triptis
produces and sells household porcelain in the upper
A segment. In 1995 the relevant market (A segment)
was about DEM 341 million in West Germany and
about DEM 98 million in East Germany. Triptis had a
market share of 3,6 % on the German market, one of
the largest porcelain markets in the Community.
ceramic/porcelain sector between
Trade
Germany and the other Member States is strong. In
1993 German imports of tableware and ornamental
ceramics amounted to ECU 357,02 million and
exports amounted to ECU 403,97 million.

in the

sector has

The Community ceramic goods
total
production approaching ECU 17 billion and employs
around 210 000 people involving over 2 500 com-
panies. European production grew by an average
0,9 % per annum and consumption by 1,18 % over
the 1984 to 1993 period. Triptis became heavily
involved in intra-Community trade. Roughly 20 % of
its output was supplied to the West European market,
in particular Italy, France and Sweden. For this reason,
any aid to Triptis Porzellan GmbH is likely to
improve its position on the market vis-(cid:133)-vis
its
competitors in the Community which do not receive
State support.

(1) OJ C 307, 13. 11. 1993, p. 3.
(2) OJ L 273, 25. 10. 1994, p. 22.

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The aid programme for Thuringia’s guarantees (1) on
which the 1993 and 1994 guarantees were clearly
based (2), was not notified at the time and has still not
been approved for the period 1992 to 1994. The aid
an
therefore not granted under
measures were
approved aid scheme and therefore, pursuant
to
Article 93(3) of the EC Treaty, should have been noti-
fied individually, before being put into effect. The
German authorities did not comply with this require-
ment under Article 93(3) since the BvS loan and the
Land guarantees were granted without
first being
approved by the Commission. This means that the aid
is unlawful.

While there would have been a possibility of
exempting the aid from the prohibition under Article
92(1) of the EC Treaty, the derogations laid down in
Article 92(2) are not applicable in this case, because of
the nature of the aid and the fact that no attempt was
made to meet the conditions in which these deroga-
tions apply.

As regards the derogations under Article 92(3) of the
EC Treaty, it is true that Triptis is located in an area
where there is serious underemployment or where the
standard of living is abnormally low. According to
Article 92(3)(a), aid to promote the economic develop-
ment of such areas may be considered to be compat-
ible with the common market. The aid in question
certainly did not contribute to the economic develop-
ment of the region, since it served primarily to keep a
loss-making firm on the market, and not to create
investment
and jobs. Consequently it must be
regarded as ad hoc aid directed towards restoring the
viability of a company in difficulties in an economic-
ally weakened region.

Compatibility is
therefore assessed under Article
92(3)(c), since the restructuring of a company in diffi-
culty is involved. For this derogation to be applicable,
the aid must satisfy the conditions laid down by the
Community guidelines on State aid for rescuing and
restructuring firms in difficulty. It must, in particular:

— restore the viability of the firm within a reasonable
time scale and on the basis of a sound and realistic
restructuring programme,

— avoid undue distortion of competition. This means
that for any aid to be approved under the guide-
lines, measures must be taken to offset as far as

(1) Richtlinie f(cid:129)r die (cid:154)bernahme von B(cid:129)rgschaften und Garan-
tien zugunsten der Wirtschaft und der freien Berufe durch
den Freistaat Th(cid:129)ringen (Programme for taking over guaran-
tees
in favour of business and the liberal professions by
Thuringia) of 18 June 1992. As the Commission explicitly
the next guarantee
in the approval of
stated in its letter,
programme in 1996, no account was taken of its predecessors:
SG(96)D/11031.

(2) At no time during the proceedings did Thuringia refer to this

legal basis.

to Article 92(3)(c) of

since
possible adverse effects on competitors,
otherwise the aid would be contrary to the
common interest and ineligible for exemption
pursuant
the EC Treaty.
Therefore, where an objective assessment of the
demand and supply situation shows that there is a
structural excess of production capacity in a rele-
vant market in the Community, the restructuring
plan must make a contribution, proportionate to
the amount of aid received, to the restructuring of
the industry serving the relevant market in the
Community by irreversibly reducing or closing
capacity. However,
the Commission is able to
apply this principle more flexibly in an area
coming under Article 93(3)(a) of the EC Treaty,

— limit the amount of aid to the strict minimum.
The analysis of the measures should prove that the
aid is proportionate to the costs and benefits of
restructuring. The form in which the aid is granted
must be such as to avoid providing the company
with surplus cash. The aid must not be used for
for
activities or
aggressive, market-distorting
investment not
the restructuring
required for
process, but must be absolutely necessary to solve
the special problems of the company.

As regards the first condition, when it initiated the
Article 93(2) proceedings the Commission, basing
itself on the figures which were submitted by the
German authorities in the notification and subsequent
information, expressed no doubts whatsoever as to the
company’s viability. These forecasts assume a steady
increase in annual turnover, a return to viability in
1997/98 and a profit of DEM 1,25 million in the same
year. Therefore the doubts which led to the initiation
of proceedings concerned only the question of
capacity and uncertainty as to the exact amount of the
aid. As was then shown by the company’s bankruptcy
on 30 April 1997,
the figures, which had been
submitted only five months earlier, were obviously
either already out of date when they reached the
Commission or were based on unrealistic assump-
tions. What is more, the German authorities were
apparently aware of this fact before the Commission
was informed.

initiated proceedings,

Furthermore, when it
the
Commission knew nothing of the unlawful aid of
DEM 26,75 million in the form of guarantees from
Thuringia. It also seems that in 1993 and 1994, i.e. at
the time when the aid was granted, no viable restruc-
turing plan existed and that therefore this aid was
unrelated to any restructuring effort.

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So, despite all efforts, the viability of Triptis could not
be restored, and at the same time the aim of the
concerted action — to save Triptis from bankruptcy
— was not attained either.

bute any more funds. In view of the fact that these are
private individuals and not
firms with the corre-
sponding financial resources, their contribution can
be described as appropriate.

As regards the second condition, it emerged during
the proceedings that overcapacity does exist in the
porcelain industry. Community production and
consumption of ceramic goods grew steadily between
1984 and 1991, and then fell back in 1992 and 1993.
A recovery in production figures has been expected
since 1994. Even an increase in exports cannot
compensate for the pressure of competition in this
sector. On the contrary, the strained competitive situa-
tion connected with the overcapacity within the
Community could intensify further as a result of
from south-east Asia and the
increasing imports
central and east European countries, particularly the
Czech Republic and Hungary, which benefit from
their trade agreements with the Community. This
situation led to high production costs and the overca-
pacity which exists in the Community tableware
sector. Therefore there is still a long way to go before
restructuring is achieved.

During the proceedings it was established that in view
of the severe overcapacity in the porcelain industry,
the aid granted to Triptis did in fact unduly distort
competition and that consequently the payment
damaged competitors which did not receive aid and
had to manage structural adjustment with their own
resources. The presumption that the aid to Triptis was
likely unduly to distort competition is confirmed by
the reaction of a Spanish competitor which it sent to
the Commission.

According to the third condition, the form in which
the aid is granted must be such as to avoid providing
the company with surplus cash which could be used
for an aggressive market policy not linked to the
restructuring process. A major part of the aid was
granted as far back as 1993 and 1994 and was neces-
sitated by the high liabilities and interest payments.
The same applies to the DEM 8 million made avail-
able to Triptis, of which only DEM 600 000 was avail-
able as liquidity. DEM 7,4 million was used to cover
the losses incurred in the years 1994 to 1996.

As regards the proportionality of the aid, Triptis had
already contributed DEM 17 million to investment
and DEM 24,7 million to cover losses. In addition, in
1996 the enterprise promised to invest a further DEM
2,5 million, with each of the investors contributing
DEM 100 000.
their own
this
resources, they are no longer in a position to contri-

exhausts

Since

Since already two of the three criteria set out in the
guidelines are not met, the aid cannot be approved on
the basis of Article 92(3)(c) of the EC Treaty.

Taking all these facts into account the Commission
has to conclude that both the BvS loan of DEM 8
million (plus interest) and the individual guarantees
totalling DEM 26,75 million (aid intensity DEM
24,075 million) granted by Thuringia must be
regarded as aid to which none of the derogations laid
down in Article 92(3) applies.

(3) HeLeBa’s waiver of the DEM 10 million loan under
concerted action does not in itself constitute aid, since
it was provided under a 90 % State guarantee, which
constitutes the aid element of
the action. In this
connection, it seems reasonable to assume that normal
market behaviour is involved, although the public
authorities have secured 90 % of the loan and have
thus taken over most of the risk.

(4) As regards the continuation arrangements (Auffangl(cid:148)-
sung) which were established after Triptis went bank-
rupt and under which Winterling took over
the
company’s fixed assets, the extent to which this offer
can be considered the best has still to be settled. After
an open and unconditional invitation to tender, two
interested parties
remained, Winterling and the
French company Medart de Noblat. Winterling
offered a purchase price of DEM 2,5 million and an
investment guarantee of DEM 8 million and under-
took to keep 160 employees. Medart de Noblat offered
a purchase price of only DEM 1, an investment guar-
antee of DEM 4 million and no employment guar-
antee. On this basis, Winterling’s offer could be
regarded as the better of the two. As a result, the fixed
assets of Triptis were sold to Winterling on 18 June
1997. This admits of the conclusion that no aid meas-
ures were involved in Winterling’s purchase of the
Triptis fixed assets.

According to the information submitted by Germany
on 9 September 1997, the new company will receive
no restructuring aid, except for funds for new invest-
the
ment which Thuringia plans to grant under
approved twenty-sixth outline plan for
the joint
Federal/L(cid:132)nder programme. While this subsidy is to
be regarded as aid,
is covered by Commission
approval. Any further aid to the new company must
be notified to the Commission.

it

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VIII

In cases where aid is deemed incompatible with the
common market, the Commission requires the Member
State to reclaim the aid from the recipient (1). Since this
applies to the measures in favour of Triptis which are the
subject of this Decision, the aid must be recovered. Nor
does the fact that Triptis has in the meantime filed for
insolvency make any difference to this assessment.

The recovery of the aid must take place in accordance
with German law, including the rules on default interest
on claims governed by public law in accordance with the
normal market reference interest rate in force; interest
runs from the date on which the aid was granted (2).

In accordance with the judgment of the Court of Justice
of the European Communities in Case C-142/87 Belgium
v. Commission (3) the provisions relevant for the recovery
of aid are to be applied in such a way that the recovery
required by Community law is not rendered practically
impossible. Any procedural or other difficulties in regard
to the implementation of the measure cannot have any
influence on its lawfulness,

HAS ADOPTED THIS DECISION:

Article 1

Both the loan of DEM 8 million (plus interest) granted by
the Bundesanstalt vereinigungsbedingter Sonderauf-
gaben and the 90 % guarantee provided by Thuringia to
Triptis Porzellan GmbH (in several instalments) for loans
totalling DEM 26,75 million (aid amount — DEM 24,075
million) are unlawful since they were granted without the
Commission having first been notified in accordance with
Article 93(3) of the EC Treaty.

In accordance with Article 92(1) of the EC Treaty and
Article 61(1) of the EEA Agreement, the aid is incompat-
ible with the common market, since it meets none of the

conditions contained in those Articles under which an
exemption or derogation can be granted.

Article 2

Germany shall ensure that the aid referred to in Article 1
is reclaimed and repaid in full within two months of the
date of notification of this Decision.

The aid shall be recovered in accordance with the proced-
ures and provisions of German law, and in particular the
rules on default interest on claims governed by public
law, and includes interest on the aid which starts to run
from the date on which it was granted until it is repaid,
with the rate applied being the reference rate used to
calculate the net grant equivalent of regional aid in
Germany.

These provisions shall be applied in such a way that the
recovery required by Community law is not rendered
practically impossible. Any procedural or other difficulties
in regard to the implementation of the measure shall not
have any influence on its lawfulness.

Article 3

Germany shall
inform the Commission within two
months of notification of this Decision of the measures it
has taken to comply with it.

Article 4

This Decision is addressed to the Federal Republic of
Germany.

Done at Brussels, 22 April 1998.

For the Commission

Karel VAN MIERT

Member of the Commission

(1) Commission communication of 24 November 1983 (OJ C

318, 24. 11. 1983, p. 3).

(2) Letter from the Commission to the Member States SG(91) D/

4577 of 4 March 1991.

(3) ECR [1990] I-959 (paragraphs 58 to 63).