98/693/EC: Commission Decision of 1 July 1998 concerning the Spanish Plan Renove Industrial system of aid for the purchase of commercial vehicles (August 1994 - December 1996) (notified under document number C(1998) 2048) (Only the Spanish text is authentic) (Text with EEA relevance)
Date: 1998-07-01
Institutions: European Commission
Subjects: Spain, State aid, commercial vehicle, control of State aid, interest rate subsidy, purchase

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(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 1 July 1998

concerning the Spanish Plan Renove Industrial system of aid for the purchase of
commercial vehicles (August 1994 — December 1996)

(notified under document number C(1998) 2048)

(Only the Spanish text is authentic)

(Text with EEA relevance)

(98/693/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 given notice to the parties concerned to submit
their comments, in accordance with the abovementioned
Article (1),

Whereas:

I

On 9 February 1995 the Commission sent a request,
followed by a reminder sent on 4 April 1995, for informa-
tion on a matter of which it had been made aware by the
press, namely a system of aid for
the purchase of
commercial vehicles. The system forms part of the Plan
Renove Industrial and is designed to assist natural
persons,
(SMEs),
small and medium-sized enterprises
regional public bodies and bodies providing local public
services. It involves the granting of loans for the purchase
of commercial vehicles and its purpose is to renew the
commercial vehicle fleet in Spain. Not until 7 April 1995
did the Directorate-General for Transport receive a reply
from the Spanish authorities, dated 6 March 1995. A
further request for information, dated 6 July 1995, was
answered by the Spanish authorities on 26 July 1995.

Finally, on 20 February 1996, the Commission asked for
further details. These were received in a letter dated 14
March 1996, receipt of which was recorded on 18 March
1996.

The system was set up under an Agreement, concluded
on 27 September 1994 between the Official Credit Insti-
tute (Instituto de Cr(cid:130)dito Oficial: ICO) and the Spanish
Ministry of Industry and Energy, whereby the ICO is
responsible for arranging mediation contracts with the
financial institutions. Under these contracts, the financial
institutions implement the aid scheme and are subse-
quently compensated by the ICO.

The aid consists of a subsidy of up to five percentage
points of the interest payable on the loans granted for
purchasing vehicles or for leasing them with intention to
purchase. These loans may cover as much as 70 % of the
total value of the new vehicle (excluding VAT) and last for
four years, with no grace period, the loan guarantees being
negotiated between the recipient and the financial institu-
tion.

The initial budget was for roughly ESP 9 billion (ECU
53,8 million) (2), given that the credit line opened with the
ICO was ESP 100 billion (ECU 598,1 million) and that
the maximum subsidy was ESP 93 196 (ECU 557) per

(1) OJ C 266, 13. 9. 1996, p. 10.

(2) Exchange rate of 11 May 1998: 1 ECU = ESP 167,182.

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5. 12. 98

million (ECU 5 981) loaned (up-dated value of a five-
point interest-rate subsidy for a four-year loan of ESP l
million). In view of that limit, the maximum subsidy can
also be calculated as roughly 6,5 % of the total cost of the
vehicle (9,3 % x 70 %), exclusive of VAT.

The subsidy is for the purchase of
five categories of
vehicle: (A) semi-trailers and lorries weighing more than
30 tonnes, (B) commercial vehicles weighing between 12
and 30 tonnes, (C) commercial vehicles weighing between
3,5 and 12 tonnes, (D) car-based vehicles, light commer-
cial vans and commercial vehicles weighing up to 3,5
tonnes, and (E) motor buses and coaches. Some 60 % of
the subsidised vehicles are in categories B, C and D, while
30 % are in category A and 10 % in category E.

The system was originally intended to run from August
1994 to December 1995, but was extended to the end of
1996, since only 33 % of
line had been
committed by the end of 1995. However, in their letter of
26 February 1997, the Spanish authorities formally noti-
fied the Commission that a new Plan Renove would be in
force throughout 1997.

the credit

One essential condition for obtaining the subsidy is the
requirement that a vehicle of roughly equivalent capacity
and registered more than 10 years ago (seven years ago in
the case of tractor units) be irrevocably withdrawn from
the market. The proof of that withdrawal will be passed
on by the Directorate-General
for Traffic (Direcci(cid:155)n
General de Tr(cid:145)fico) which presupposes that the with-
drawn vehicle has been registered in Spain. The following
table shows the matching between the purchased and the
withdrawn vehicle:

Type of vehicle purchased

Type of vehicle
to be withdrawn
from the market

A: Semi-trailers and lorries weighing more

A or B

than 30 tonnes

B: Commercial vehicles weighing between

A, B or C

12 and 30 tonnes

C: Commercial vehicles weighing between

A, B, C or D

3,5 and 12 tonnes

D: Car-based vehicles, commercial light vans
and commercial vehicles weighing up to
3,5 tonnes

A, B, C or D

E: Motor buses and coaches

E

II

Access to the international road haulage market was
opened up to Community competition in 1969, with the
entry into force of Council Regulation (EEC) No 1018/
68 (3) introducing a Community quota for the carriage of
goods by road between Member States, though there were

(3) OJ L 175, 23. 7. 1968, p. 13.

to

subject

international

transport was

already bilateral agreements between Member States.
Access
to
Community quotas until the adoption of Council Regula-
tion (EEC) No 881/92 of 26 March 1992 on access to the
in the carriage of goods by road within the
market
Community to or from the territory of a Member State or
passing across the territory of one or more Member
States (4), as amended by the Act of Accession of Austria,
Finland and Sweden. Consequently, the market has been
completely open to competition since l January 1993,
when Regulation (EEC) No 881/92 abolished all quanti-
tative restrictions on international road transport.

Road haulage cabotage was opened up to Community
competition on 1 July 1990, with the entry into force of
Council Regulation (EEC) No 4059/89 of 21 December
1989 laying down the conditions under which non-resi-
dent carriers may operate national road haulage services
within a Member State (5). This Regulation introduced
cabotage quotas.

The Regulation was replaced by Council Regulation
(EEC) No 3118/93 of 25 October 1993 laying down the
conditions under which non-resident carriers may operate
national road haulage services within a Member State (6),
amended by Regulation (EC) No 3315/94 (7) and currently
in force, under which cabotage is to be completely
deregulated from l July 1998, after a transitional period
during which the initial number of Community author-
isations (30 000) will increase by 30 % annually from 1
January 1995.

Access to the international market for the carriage of
persons has been liberalised through Council Regulation
(EEC) No 684/92 of 16 March 1992 on common rules for
the international carriage of passengers by coach and
bus (8), as amended by Regulation (EC) No 11/98 (9). This
Regulation, which entered into force on l June 1992 lays
down market access conditions for each type of passenger
transport service. Cabotage rights were introduced by
Council Regulation (EEC) No 2454/92 of 23 July 1992
laying down the conditions under which non-resident
carriers may operate national road passenger transport
services within a Member State (10), as amended by the Act
of Accession of Austria, Finland and Sweden. Under this
Regulation, road passenger transport cabotage, except for
regular services, is liberalised as from 30 August 1992.

(4) OJ L 95, 9. 4. 1992, p. 1.
(5) OJ L 390, 30. 12. 1989, p. 3.
(6) OJ L 279, 12. 11. 1993, p. 1.
(7) OJ L 350, 31. 12. 1994, p. 9.
(8) OJ L 74, 20. 3. 1992, p. 1.
(9) OJ L 4, 8. 1. 1998, p. 1.
(10) OJ L 251, 29. 8. 1992, p. 1.

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III

transport operations, 16,2 % are firms holding two to five
licences, 2,4 % have six to 20 licences and only 0,1 % are
large enough to have more than 20 licences.

By letter dated 26 June 1996, the Commission informed
the Spanish authorities of
its decision to initiate the
procedure provided for in Article 93(2) of the Treaty,
inviting them to state their views on the decision to
initiate the procedure, and it informed the other Member
States and interested third parties by publishing its letter
in the Official Journal of the European Communities (11).
In this decision the Commission stated that it considered
the aid illegal and expressed its doubts on the conformity
of the aid with the Treaty.

Following initiation of the procedure, the Spanish author-
ities submitted their comments in a letter dated 26 July
1996, receipt of which was recorded by the Commission
on 1 August 1996. Following a request for further infor-
mation sent on 19 December 1996, the Spanish author-
ities communicated certain details in the course of a
bilateral meeting held on 14 January 1997 and by letter
of 12 February 1997. Publication in the Official Journal
drew no reactions from any interested third parties.

the aid,

With regard to the actual recipients of
the
Spanish authorities, in their letter of 12 February 1997,
pointed out that many of them fell into the category of
‘regional public bodies and bodies providing local public
services'. These are firms which provide public services,
such as urban passenger transport, fire-fighting and waste
collection services, under a special concession. They
include, for example, local passenger transport companies
such as Transportes de Barcelona, Empresa Municipal de
Transportes de Gij(cid:155)n, Tranv(cid:146)as de Cadiz SA and
Empresa Municipal de Transportes de Madrid.

The remaining recipients are natural persons or SMEs,
covered by the definition laid down in the Community
guidelines on State aid for SMEs (12) and the Commission
Recommendation of 3 April 1996 concerning the defini-
tion of small and medium-sized enterprises (13), engaged
in transport for hire-and-reward but also own account
transport operations. Most are very small firms with just
one lorry or bus, carrying passengers or goods by road. In
their letter of 12 February, these details were spelt out.
Nevertheless, given the difficulty in obtaining detailed
information about all 12 591 recipients of the aid granted
under the Plan Renove, since the details are not on
computer file, the Spanish authorities have obtained their
information by analysing a sample of cases relating to
46 % of vehicles in category A and 67,1 % in category E
which, by reason of their size, are the most likely to be
involved in intra-Community trade. On this basis, the
Spanish authorities have stated that 80,8 % of aid recipi-
ents are very small firms holding just one licence for road

Moreover,
in their comments on the initiation of the
procedure, the Spanish authorities argued that the delay
in examining the aid scheme and the amount of time
which had elapsed between the Commission’s requests
for
for
information, gave them reasonable grounds
believing that no aids were involved, or that any aid
which had been granted was compatible with the Treaty.
In defence of this view they referred to judgments of the
Court of Justice of the European Communities, in partic-
ular those given on 20 March 1984 in Case No C-84/82
(Germany v. Commission (14)) and on 21 March 1991 in
Case No C-303/88 (Italy v. Commission (15)).

At the meeting on 14 January 1997, the Spanish author-
ities informed the Commission that, by the end of 1996,
the system had been applied as follows: 12 591 operations
carried out, 14 295 vehicles subsidised, ESP 7 976 million
(ECU 47,7 million) granted.

In their letter of 12 February 1997 the Spanish authorities
maintain that, in the case of subsidies for vehicles in
categories B, C and D,
the risk of distortion to
competition is minimal since these types of vehicle are
normally used for activities which are not open to inter-
infra-
national
Community trade cannot be appreciably affected.

competition and that,

consequently,

the Spanish authorities
In the abovementioned letter,
pointed out that semi-trailers and lorries weighing more
than 30 tonnes (A) and buses and coaches (E) are used in
road transport activities open to competition. Only 4 288
vehicles in category A were subsidised in 1995, as against
167 353 licences granted for this type of vehicle. Simi-
larly, 1 459 buses and coaches were subsidised in 1995,
out of a total of 28 012 licensed.

The Spanish authorities stressed, in their letter of 26 July
1996, that the introduction of the Plan Renove had not
led to any increase in capacity in this sector, since it was
impossible for a withdrawn vehicle to be placed on the
market again and there was an almost exact correspon-
dence between the withdrawn vehicle and the new one.
As the Spanish authorities confirmed at the meeting on
14 January 1997, no subsidy is granted prior to produc-
tion of a document certifying that the vehicle has been
definitively withdrawn. This certificate appears on the
vehicle licence, so the vehicle cannot possibly be put on
the road again. The withdrawn vehicles are then scrapped.
However, with regard to the equivalence in capacity
between withdrawn vehicles and those replacing them,

(11) See footnote 1.
(12) OJ C 213, 19. 8. 1992, p. 2 and OJ C 213, 23. 7. 1996, p. 4.
(13) OJ L 107, 30. 4. 1996, p. 4.

(14)
(15)

[1984] ECR 1451.
[1991] ECR I-1433.

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5. 12. 98

the Spanish authorities recognised, in their letter of 26
July 1996, that in 15,7 % of cases there had been no
equivalence in capacity: in 3,4 % of cases the replace-
ment vehicle was in a lower category, while in 12,3 % of
cases (i.e. 1 758 of the 14 295 vehicles subsidised) the new
vehicle was in a higher category.

When initiating the Article 93 procedure, the Commis-
sion warned of the danger of discrimination, since to
qualify for the aid in question, applicants were required to
produce a document issued by the Direcci(cid:155)n General de
Tr(cid:145)fico (Directorate-General for Traffic) certifying that the
vehicle concerned had been withdrawn from service. This
meant that the withdrawn vehicle had to have been regis-
tered in Spain.

However, the Spanish authorities, in their letter of 26 July
1996, argued that there was no requirement that the reci-
pient of the aid be the owner of the vehicle withdrawn
from circulation. Carriers not established in Spain were
thus eligible for the subsidy if they signed an agreement
with a carrier established in Spain who would then scrap
his old vehicle to enable the subsidy to be granted to the
foreign carrier. Although the vehicle must be registered in
Spain, a non-resident carrier could thus receive the aid
indirectly.

consideration as SMEs but which, for exceptional reasons,
marginally failed to meet one or other of those criteria at
some point in the process.

Furthermore, the Spanish authorities stated that the ICO
had had no margin of discretion with regard to the
maximum amount of the subsidy, since this amount, ESP
93 196 (ECU 557) had already been fixed in the Agree-
ment. They also stated that
the interest rate actually
applied to the loans was the going rate on the Madrid
interbank market
(the MIBOR) and was therefore a
commercial and objectively-based interest rate.

On a number of occasions the Spanish authorities alleged
that the amount of the subsidy in question was lower than
the de minimis figure laid down in the abovementioned
Community guidelines on State aids for SMEs and in the
Commission Communication concerning de minimis
aids (16), and that the subsidy therefore does not constitute
aid within the meaning of Article 92(1) of the Treaty.

The Spanish authorities have also argued that most of the
potential applicants for subsidies are own-account trans-
port operators whose main business is not transport, and
that the Community guidelines on State aids for SMEs
and the de minimis
rule should therefore apply to
purchases made by those non-transport companies.

Moreover, according to the Spanish authorities, there is no
requirement that the recipient of the aid purchase the
new vehicle in Spain, only that the purchase be financed
via one of the bodies associated with the Plan Renove.
This obligation could not give rise to problems of
discrimination, since there are a great many such bodies
(not only banks but also the financial arms of inter-
national vehicle manufacturers such as Scania and Iveco)
located not only in Spain but also throughout Europe.

When initiating the Article 93 procedure, the Commis-
sion pointed out that the aids granted under the Plan
Renove Industrial might be cumulated with those
authorised under the Commission Decisions of 6 April
1993 (17) and 7 February 1996 (18), including the option of
granting aid for the purchase of rolling stock or vehicles
to companies which merge or consolidate, and guaran-
teeing loans for vehicle replacement.

The Spanish authorities did, however, point out
that
foreign carriers never opted for this arrangement since the
benefits to be derived from the Plan Renove Industrial
were insufficient when compared with those available in
other Member States, where interest rates are generally
much lower than in Spain.

In their letter of 12 February 1997 the Spanish authorities
stated that no such cumulation had occurred in the case
of merger and consolidation aids granted under Article
21(b) of the Ministerial Order of 26 April 1993, since this
relates to the purchase, not of new vehicles but of trans-
port equipment by firms holding restricted licences under
business merger and consolidation procedures.

When initiating the Article 93 procedure, the Commis-
sion pointed out that, because the ICO enjoys a wide
margin of discretion, the Plan Renove lacks transparency
and could lead to discrimination. In their letter of 26 July
1996 and at the meeting on 14 January 1997, the Spanish
authorities explained that
there had never been any
recourse to the theoretical option of exceptionally
granting loans which did not meet the stipulated condi-
tions, since the purpose of this exception was to enable
the Plan to benefit firms which met all the criteria for

Article 28 of the Order provides for guarantees for loans
and leasing or commercial credit operations, including
loans for replacing vehicles more than eight years old.
The Spanish authorities stated that, although ESP 9 055
million (ECU 54,2 million) was earmarked for this aid
scheme, only ESP 149 million (ECU 891 000) had been

(16) OJ C 68, 6. 3. 1996, p. 9.
(17) OJ C 128, 8. 5. 1993, p. 6.
(18) OJ C 70, 8. 3. 1996, p. 6.

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allocated to vehicle replacement loans. These loan guar-
antees were provided by means of a temporary contribu-
tion of not more than 9 % of the loan amount to mutual
guarantee companies, enabling the firms concerned to
obtain loans on more favourable terms.

First by fax and then in a letter dated 19 November 1997
the Commission asked the Spanish authorities to provide
further
information on companies who were not
providing transport services as a main activity and only
impact on intra-
operate in local markets without
Community trade. The Spanish authorities replied by
their letters of 27 November 1997 and 20 February 1998,
registered on 3 December 1997 and 23 February 1998 by
the General Secretariat of the Commission respectively. It
derives from the information provided that with regard to
the purchasers of Category D vehicles a number of bene-
ficiaries, identifiable for the Spanish authorities, operate
under restricted licences.

IV

threatens

Article 92 of the Treaty states that any aid granted by a
Member State or through State resources in any form
whatsoever which distorts or
to distort
competition by favouring certain undertakings or the
production of certain goods is, in so far as it affects trade
between Member States, incompatible with the common
market. This concept of aid therefore requires the consid-
eration of
the use of State
resources, the distortion of competition and the extent to
which trade is affected.

three fundamental

issues:

In the case under examination, the Commission considers
that the aid for the purchase of commercial vehicles is
granted from State resources since the subsidies come
from the budget of the Spanish Ministry of Industry and
Energy.

The aid in question takes the form of purchasing aid,
which presumes that it will benefit the purchasers of
commercial vehicles by lowering the cost of
such
vehicles.

From the point of view of these purchasers, the aid is
intended to benefit natural persons, SMEs,
local or
regional authorities or local service providers. The subsid-
ies reduce their normal business expenses, thus giving
them an advantage over their competitors. The Commis-
sion considers that the aid strengthens the financial posi-
tion of the recipient firms, giving them greater scope for
action and a competitive advantage.

The Commission considers that, where the recipients are
public or private bodies providing local or regional public
services not open for competition on the basis of
Community legislation (19) with carriers
from other
trade between Member States is not
Member States,
affected within the meaning of Article 92(1) of the Treaty.
The aid is granted within the context of the provision of a
public service via a concession contract in a regulated
market. Due to the lack of
liberalisation there is no
competition with carriers from other Member States and,
therefore, no reference to international transport services.

Accordingly,
the Commission considers that measures
local or
under the Plan Renove Industrial
regional public bodies or to local firms providing local
public services under a concession do not constitute State
aids within the meaning of Article 92(1) of the Treaty,
since the services provided by such bodies and companies
do not affect trade between Member States.

to assist

In those cases where the aid is granted, to natural persons
or SMEs pursuing a business other than transport at a
solely local or regional level, and where only the purchase
of small commercial vehicles (Category D) typically used
for very short journeys in such environments is subsid-
ised, it can also be concluded that such aid has no effect
on trade between Member States. Such business activities
are considered to affect only the companies’ respective
local markets. In addition, the effect of such own account
services on the transport market is negligible because
entrusting a transport company with the provision of the
service — contracting it out — is not a viable option in
economic terms. The Commission is, therefore, of the
opinion the aid provided does not constitute State aid
within the meaning of Article 92(1) of the Treaty.

The other recipients, however, having transport as their
main business or only as an auxiliary one compete with
transport companies which are not eligible for aid under
the Plan Renove Industrial both from Spain or from
other Member States since the liberalisation of road trans-
port in 1990 led to competition with firms from other
Member States, both in international transport and in the
cabotage sector.

(19) Article 3 of Council Regulation (EEC) No 2454/92 of 23 July
1992 laying down the conditions under which non-resident
carriers may operate national road passenger transport services
within a Member State (OJ L 251, 29. 8. 1992, p. 1) and
Council Regulation (EEC) No 1191/69 of 26 July 1969 on
action by Member States concerning the obligations inherent
in the concept of a public service in transport by rail, road
and inland waterway (OJ L 156, 28. 6. 1969, p. 1) as last
amended by Regulation (EEC) No 1893/91 (OJ L 169, 29. 6.
1991, p. 1).

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The Commission considers that although there is no
formal legal reason why carriers not established in Spain
should not take advantage, albeit indirectly, of the sub-
sidies available under the Plan Renove, in practice the
system nevertheless discriminates against non-resident
carriers since they have to scrap a vehicle registered in
Spain and, therefore, may have to buy scrapping rights
from Spanish operators, whereas the latter can take direct
advantage of the subsidies without recourse to an inter-
mediary.

that Article, Council Regulation (EEC) No 1107/70 of 4
June 1970 on the granting of aids for transport by rail,
road and inland waterway (20), as last amended by Regula-
tion (EC) No 543/97 (21), authorises aid for the coordina-
tion of transport. The Commission, however, considers
that
the Spanish aid scheme in question cannot be
covered by any of the exemptions provided for in the
Regulation since it does not constitute a measure neces-
sary for the coordination of transport.

leads

Industrial

It is therefore reasonable to conclude that granting sub-
sidies for purchasing commercial vehicles under the Plan
Renove
also to a distortion of
competition between carriers established in Spain and
those who operate in Spain but are based in other
Member States. Above all, however,
the aids granted
distort or threaten to distort competition because recip-
ients of subsidies under the Plan Renove are in a priv-
ileged position vis-(cid:133)-vis competitors unable to take ad-
vantage of the aid scheme.

The Commission considers it reasonable to accept that
the management of the loans through ICO does not
imply any potential discrimination between recipients of
the subsidies.

Where aid strengthens the financial position of firms in a
particular sector involved in intra-Community trade, this
trade must be regarded as affected within the meaning of
Article 92(1) of the Treaty. Since the aid provided for in
the Plan Renove Industrial strengthens the financial
position and scope for action of the recipient companies
as compared with their competitors, and since this effect
takes place within the context of intra-Community trade,
the Commission considers that the latter is likely to be
affected by the granting of such aid.

V

The concept of aid meeting the needs of coordination of
transport implies Government intervention in the trans-
port sector. The more a sector is liberalised, the less need
there is for coordinating activities to be undertaken by the
Member States. Indeed, in a liberalised transport market
coordination may be achieved by the market itself, within
the limits of the framework conditions set by the Member
States in accordance with Community law as set out in
Article 75 of the Treaty. In conclusion, in this case no
transport specific exceptions apply.

In the case at issue, the exceptions provided for in Article
92(2) of the Treaty are not applicable because the aid
scheme is not directed towards the attainment of the
objectives set out. According to those objectives aid shall
be compatible with the common market if it is granted
either to individuals for social purposes, or to compensate
for damages caused by natural disasters or exceptional
occurrences, or for effects of the division of Germany.

functioning of

Under Article 92(3) of the Treaty aid may by considered
compatible with the common market. In order to ensure
the proper
the common market and
having regard to the principles in competition matters
established by the Treaty, the exceptions provided for in
that Article must be construed narrowly when aid meas-
ures are assessed.

Accordingly, the Commission considers that aid granted
to SMEs under the Plan Renove Industrial constitutes
aid within the meaning of Article 92(1) of the Treaty,
under which aid having the characteristics described in
that paragraph is,
incompatible with the
common market. Article 77 as well as Article 92(2) and (3)
of the Treaty set out the types of aid which are, or may be,
compatible with the common market.

in principle,

Article 77 of the Treaty, especially designed for the needs
of the transport sector, provides exemptions for State aid
granted for the coordination of transport or compensating
to
the provision of a public service. Pursuant
for

Article 92(3)(a) exempts aid which promotes the develop-
ment of areas with economic difficulties and a special
need for assistance. The exception cannot be considered
relevant to aid schemes without a regional element — the
whole territory of the Member State is covered — and
with a clear sectoral objective and the Commission has
traditionally considered vehicle-purchasing aid, within the
common transport policy context not to be justifiable
from a regional viewpoint, given the mobile nature of the
object of the subsidy. The same can be said for the
exception provided by Article 92(3)(c) of the Treaty when
reference is made to the development of regions.

(20) OJ L 130, 15. 6. 1970, p. 1.
(21) OJ L 84, 26. 3. 1997, p. 6.

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the aid at

issue is not

With regard to the exceptions provided for in Article
92(3)(b) and (d),
intended to
promote the execution of a project of common European
interest or to remedy a serious disturbance in the Spanish
economy, nor does it have any features of such projects. It
is also not
intended to promote culture or heritage
conservation, nor does it comply with any other exemp-
tion on the basis of Council legislation.

Article 92(3)(c) also provides for an exception relating to
aid granted to facilitate the development of certain
economic activities and where the aid measures do not
adversely affect trading conditions to an extent contrary to
the common market. Legal practice requires, inter alia,
that the aid has to be restricted to those cases where it is
necessary to achieve objectives which market forces do
not achieve by themselves (judgment of the Court of 17
September 1980 in Case C-730/79, Philip Morris v.
the Commission
Commission (22)).
considers that the State aid measures notified in the given
case should be assessed under Article 92(3)(c) of
the
Treaty.

conclusion,

In

The Commission has adopted some specific conditions
for aid schemes which are not considered to be incompat-
ible with Article 92 of the Treaty: the de minimis rule. As
has already been pointed out by the Commission when
initiating the Article 93 procedure, under these rules,
certain amounts provided by the Member States, due to
their low thresholds, are not considered to threaten to
distort competition and trade between Member States to
any perceptible degree. However, the de minimis rule
explicitly exempts the transport sector from its scope, as
in this sector — characterised by a large number of small
companies — even relatively small amounts can have an
impact on competition and trade between Member States.

The Commission similarly regards as invalid the argu-
ments mentioned in the context of the application of the
Community guidelines on State aids for SMEs and the
applicability of the de minimis rule to companies who are
performing own-account transport operations. The trans-
port sector is made up of transport for hire or reward as
well as own-account
transport, as both activities are
regarded as being interchangeable. From a macroeco-
nomic as well as an operational point of view in certain
situations the outsourcing of transport services permits an

(22)

[1980] ECR 2671.

optimum allocation of resources and brings a desired
element of flexibility to the organisation of transport.

The Commission acknowledges the validity of the argu-
ment that financial incentive may help to withdraw from
the market commercial vehicles with low technical stan-
dards with regard to safety and/or
the environment.
However, the Member State concerned needs to prove the
positive impact of a proposed measure.

In particular, in order to be compatible with the common
market, aid provided for the purchase of vehicles must be
organised in such a way that, in compliance with the
Community guidelines on State aid for environmental
protection (23), the eligible costs are strictly confined to
the extra investment costs necessary to meet environ-
mental objectives by achieving standards higher than
those already required by law. A similar approach can be
considered for safety standards. Any measure justified
counteract other
under
Community legislation or the Articles of the Treaty.

the guidelines may never

The Commission in its guidelines does not consider aid
provided to ensure compliance with existing mandatory
technical standards to be eligible except for certain invest-
ment in fixed assets. Such aid has a considerable distortive
effect on competition as it subsidises investment which
becomes necessary anyhow under economic considera-
tions and is, therefore, inevitable. Aid compensating for
such investments is not regarded as serving the common
European interest.

First, Spain has never provided the Commission with any
proof of
the positive impact, nor does the measure
provide any incentive to go beyond the existing man-
datory technical standards.

Secondly, in a market with overcapacity like the road
transport sector, aid for the purchase of tonnage and even
more additional tonnage — there is no exact equivalence,
in terms of size, between the new vehicles and those
withdrawn — is, in principle, considered contrary to the
Community interest.
It had been confirmed to the
Commission that the granting of the aid under the Plan
Renove Industrial, has led to a certain increase in
capacity, although the Commission accepts
the
system of prior checks provides a sufficient guarantee that
replaced vehicles are indeed finally withdrawn from the
market. The Commission,
in its general aid practice,
authorises aid for new investment which would not take
place otherwise but not just for replacement (24).

that

(23) OJ C 72, 10. 3. 1994, p. 3.
(24) Paragraph 18 of the Communication of the Commission of

1975, COM(75) 77 final, 26. 2. 1975.

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Official Journal of the European Communities

5. 12. 98

However, under the Renove Industrial aid system, the
basis for calculating the subsidy is the price of a new
vehicle: no environmental factor is taken into account.
The subsidy is proportional to the price of the vehicles
and not to their environmental or safety performance.

Already in Decision 98/182/EC (25)
the Commission
contended that a similar measure in a scheme intended to
improve the competitive position of commercial road
haulage companies is likely to produce a distortion of
competition, since it seeks to reduce the normal business
running costs of a company, whereas such costs have to
be borne in full by its competitors.

The Commission therefore considers that the exemption
under Article 92(3)(c) of the Treaty cannot be applied in
the Spanish authorities have
this case. Furthermore,
neither argued nor shown that the aids in question qualify
for any of the abovementioned exemptions provided for
in the Treaty, in Regulation (EEC) No 1107/70 or in any
other Council Regulation.

In addition the Commission considers that there has been
a genuine risk of cumulating the aids granted under the
Plan Renove Industrial with those granted under the
guarantee measures authorised by the Commission in
1993 and 1996, and that this may have resulted in aids
exceeding the levels provided for in the Plan Renove
Industrial.

the foregoing information,

On the basis of all
the
Commission considers that the aid for the purchase of
commercial vehicles granted under the Plan Renove
Industrial to certain natural persons and SMEs is not
compatible with the common market for the purposes of
Article 92 of the Treaty.

its
under that Article a Member State may not put
proposed measures into effect until the procedure has
resulted in a final decision, and that failure to comply
with this provision constitutes
an infringement of
Community law which may result in recovery of the aid,
with interest.

The Spanish Government was informed by letter of 26
June 1996 that
the Article 93 procedure was being
initiated. On that occasion, the Spanish Government’s
attention was drawn to the Commission Communication
to the Member States (26) pointing out that any aid illeg-
ally granted may be the subject of a Decision ordering the
Member State concerned to recover it. In their reply, the
Spanish authorities argued that such a Decision would
contravene the principle of proportionality, given the low
level of aid involved.

The Commission nevertheless considers that,
in this
instance, the aid should be recovered in order to restore
the conditions of fair competition, which prevailed before
the aid was granted,

HAS ADOPTED THIS DECISION:

Article 1

the Plan Renove Industrial

Aid granted under
to
regional public bodies and bodies providing local public
services, in the form of interest rate subsidies on loans for
the purchase of commercial vehicles between August
1994 and December 1996, under the cooperation Agree-
ment of 27 September 1994 between the Spanish Ministry
of Industry and Energy and the Instituto de Cr(cid:130)dito
Oficial, does not constitute State aid within the meaning
of Article 92(1) of the Treaty.

VI

Article 2

Under Article 93(3) of the Treaty, the Commission should
have been informed of that aid in sufficient time to
enable it to submit its comments. The Spanish Govern-
ment implemented the aid system without having met
that notification requirement: accordingly, the Commis-
sion considers that system illegal under Community law.

Aid granted to natural persons or SMEs pursuing a busi-
ness other than transport on a solely local or regional
level, for the purchase of commercial vehicles of Category
D, does not constitute State aid within the meaning of
Article 92(1) of the Treaty.

The Commission does not accept the argument that the
aid became legal by virtue of time elapsing since the
scheme was first put into effect. The Spanish authorities
still failed to comply with their obligation under Article
93(3) of the Treaty to notify their plans to grant aid and
await the relevant Commission decision authorising the
provision of the aid. The Commission reminds them that

Article 3

All other aid granted to natural persons and SMEs consti-
tutes State aid within the meaning of Article 92(1) of the
Treaty, is illegal and is incompatible with the common
market.

(25) OJ L 66, 6. 3. 1998, p. 18.

(26) OJ C 156, 22. 6. 1995, p. 5.

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Official Journal of the European Communities

L 329/31

Article 4

Spain shall abolish and recover the aid referred to in Article 3. The aid shall be repaid in
accordance with the provisions of national law, and maturity interest shall be added to the
sums recovered. The interest shall be calculated on the basis of the reference rates used in
evaluating regional aid schemes and shall run from the date when the illegal aid was
granted until the date when it is actually repaid.

Spain shall inform the Commission, within two months of the date of notification of this
Decision, of the steps it has taken to comply therewith.

Article 5

This Decision is addressed to the Kingdom of Spain.

Article 6

Done at Brussels, 1 July 1998.

For the Commission

Neil KINNOCK

Member of the Commission