2002/897/EC: Commission Decision of 12 March 2002 on the State aid implemented by Germany for Ingenieur- und Gewerbebau GmbH (IGB) (notified under document number C(2002) 912) (Text with EEA relevance)
Date: 2002-03-12
Institutions: European Commission
Subjects: Germany, State aid, building industry, control of State aid, industrial restructuring

L 314/72

EN

Official Journal of the European Communities

18.11.2002

COMMISSION DECISION

of 12 March 2002

on the State aid implemented by Germany for Ingenieur- und Gewerbebau GmbH (IGB)

(notified under document number C(2002) 912)

(Only the German text is authentic)

(Text with EEA relevance)

(2002/897/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

was then registered as C 66/2001. No comments were
received from third parties. Comments were received
from Germany on 11 November 2001.

Having regard to the Treaty establishing the European
Community, and in particular the first subparagraph of Article
88(2) thereof,

II. DESCRIPTION

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

(4)

Having called on interested parties to submit their comments
pursuant to the provisions cited above (1),

financial measures

The case concerns
the
restructuring of an SME active in the building sector in
Thuringia. On 1 January 1997 IGB was merged with
HAB, a company owned by IGB’s shareholders, and
subsequently traded under the name of HAB. Some
basic economic data are given below:

to assist

Whereas:

I. PROCEDURE

registered by the
By fax of 29 December 1999,
Commission on 10 January 2000 as aid NN 2/2000, the
German Government
informed the Commission of
financial measures to assist Ingenieur- und Gewerbebau
GmbH (hereinafter
financial
measures had already been granted to the company,
they were registered as unnotified State aid (NN)
in
accordance with Article 88(3) of the EC Treaty.

IGB). Given that

the

Progress/output

(in DEM ’000)

1996
(IGB)

1997
(HAB)

1998
(HAB)

1999
(HAB)

Turnover

1 655

10 500

9 175

5 404

Net profit

Employees

3

25

44

85

22

85

23

82

(5)

On 28 March 2001 HAB filed for bankruptcy.

By letter dated 29 September 2001, the Commission
informed Germany that it had decided to initiate the
procedure laid down in Article 88(2) of the EC Treaty in
respect of the aid.

(6)

The restructuring period lasted from 1996 to 2000. The
restructuring costs amounted to DEM 2 610 000.

1. The restructuring

The Commission decision to initiate the procedure was
published in the Official
the European
Communities (2). The Commission invited interested
parties to submit their comments on the aid. The case

Journal

of

2. State financial measures to assist the
restructuring

(1) OJ C 330, 24.11.2001, p. 5.
(2) See footnote 1.

(7)

According to the information in the Commission’s
possession, the following measures were granted from
public sources to assist the restructuring of:

(1)

(2)

(3)

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(a) a DEM 580 000 grant from the BvS (successor to

the Treuhand privatisation agency);

(b) a 80 % deficiency guarantee from the Land of
amounting to DEM 1 200 000 and

Thuringia
covered by an approved aid scheme (3);

(c) a one-off

investment allowance of DEM 1 700
granted under an approved investment allowance
scheme (4).

(8)

According to the information provided, a loan of DEM
500 000 at 5,5 % from the European Recovery
Programme (ERP) and a loan of DEM 250 000 at 5,5 %
from the Thuringia Development Bank (TAB) were
granted. No further
information on these measures
could be obtained.

3. Financial contributions from other sources

(9)

Germany indicated the
as
contributions from the beneficiary or from external
commercial sources:

following contributions

(a)

investor’s own capital: DEM 170 000;

(b) a 20 % personal guarantee

from the

investor

amounting to DEM 300 000;

(12)

(c)

joint liability of the investors for 80 % of the loans,
i.e. some DEM 920 000;

(d) decision by the workforce to forgo the Christmas

allowance, representing DEM 345 000.

(10) Germany is of the opinion that these contributions have
to be regarded as contributions from the beneficiary
from its own or external commercial sources to the
restructuring totalling DEM 1 735 000, i.e. 66 % of the
restructuring costs.

(b) the restructuring plan was possibly not suited to
restoring the long-term viability of IGB/HAB since
the market conditions
in the sector were very
difficult and the company was a small company
with limited resources;

(c)

the aid to IGB possibly distorted competition unduly
since IGB operated in a sector characterised by
overcapacity and the restructuring should have
involved some reduction of capacity; despite a
request for information, Germany did not provide
any details of the capacity situation at IGB/HAB.
Accordingly,
further
information injunction;

the Commission issued a

(d) the aid was possibly not

in proportion to the
restructuring costs and benefits since, contrary to
the opinion of
the
the German authorities,
beneficiary’s
contribution appeared to be DEM
240 000, i.e. 9,2 % of the restructuring costs.

III. COMMENTS FROM GERMANY

In its reply to the decision to initiate the procedure,
Germany informed the Commission that the local court
in Gera refused to set the bankruptcy proceedings in
motion because the remaining assets were insufficient to
cover the administrative costs. The company was ipso
jure dissolved. According to Germany, a continuation of
the business in any form whatsoever is thus ruled out in
practice.

(13) No further comments concerning the points raised in
the decision to initiate the procedure were made since
Germany
in view of
the
developments, this would serve no purpose.

opinion that,

of

is

4. Reasons for initiating the procedure under
Article 88(2) of the EC Treaty

IV. ASSESSMENT OF THE AID

(11)

The Commission expressed the following doubts as to
the compatibility of the aid with the common market:

(a)

the ERP loan of DEM 500 000 and the TAB loan of
DEM 250 000 possibly contained aid elements; an
information injunction was thus issued;

(3) B(cid:252)rgschaftsrichtlinie der Th(cid:252)ringer Aufbaubank, SG(96)D/11696 of

27 December 1996 (N 117/96).

(4) Investitionszulage f(cid:252)r die neuen L(cid:228)nder, SG(95)D/17154 of 27
December 1995, as amended by SG(96)D/3794 of 12 April 1996
(N 494/A/95).

granted

to the

(14) Article 87(1) of the EC Treaty applies to all the financial
measures
recipient
by Germany
undertaking since they confer economic benefits on a
specific undertaking which it would not have received
from commercial
therefore
constitute State aid likely to distort competition. Given
the nature of the support provided and the existence of
inter-State trade within the common market
in the
sector in which the recipient undertaking was active, the
financial measures granted fall within the scope of
Article 87(1).

sources. The measures

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to the

aid allegedly granted under
(15) With respect
that,
notes
approved
according to the information available to it,
these
measures comply with the conditions of those schemes
and need not be further assessed in this decision.

the Commission

schemes,

(16)

(17)

(18)

(19)

In addition to the BvS grant of DEM 580 000, the ERP
loan of DEM 500 000 and the TAB loan of DEM
250 000 have also to be considered as ad hoc aid for
the restructuring since no other information is available.

The Commission further notes that Germany failed to
comply with its obligation under Article 88(3) of the EC
Treaty. From a formal viewpoint, the aid is therefore
unlawful. This does not necessarily mean, however, that
it
is incompatible with the common market. As a
consequence, the individual measures must be examined
under Article 87 of the EC Treaty.

Since the other derogations provided for in Article 87(2)
and (3) of the EC Treaty do not apply, the measures are
assessed under Article 87(3)(c) and under the 1994
guidelines on rescue and restructuring aid (5)
(the
guidelines). The guidelines are applicable in the present
case since all the aid measures were granted before the
1999 guidelines (6) took effect.

Since no comments on the substance of the case were
received in the course of
investigation
procedure, the doubts raised in the decision to open the
procedure have not been allayed. Accordingly, on the
basis of the available information, the Commission must
conclude that:

the formal

(21) Where an unlawfully granted aid measure has been
found to be incompatible with the common market, the
Commission is required under Article 14(1) of Council
Regulation (EC) No 659/1999 of 22 March 1999 laying
down detailed rules for the application of Article 93 of
the EC Treaty (7) to order recovery of the aid unless this
would be contrary to a general principle of Community
law. According
information provided by
Germany, the beneficiary company has been dissolved
by order of the local court in Gera on account of a lack
of assets and any continuation of its activities in any
form whatsoever is ruled out. The Commission has
therefore decided that an order for recovery of the aid
in the present case would serve no purpose.

to the

V. CONCLUSION

(22)

for

The Commission finds that Germany has unlawfully
implemented financial measures
Ingenieur- und
Gewerbebau GmbH (IGB) in breach of Article 88(3) of
the Treaty. On the basis of its assessment, it concludes
that the aid is incompatible with the common market as
it does not fulfil the conditions set out in the guidelines.
However, in view of the facts of the case, recovery of
the second
the aid should not be required under
sentence of Article 14(1) of Regulation (EC) No
659/1999,

HAS ADOPTED THIS DECISION:

Article 1

The State aid which Germany has implemented for Ingenieur-
und Gewerbebau GmbH (IGB), amounting to EUR 680 018
(DEM 1 330 000), is incompatible with the common market.

(a)

the restructuring plan was not suited to restoring
the long-term viability of HAB;

Article 2

(b) the aid for IGB unduly distorted competition;

This Decision is addressed to the Federal Republic of Germany.

(c)

the aid was not in proportion to the restructuring
costs and benefits.

Done at Brussels, 12 March 2002.

(20)

Consequently, the aid for IGB does not comply with the
criteria laid down in the guidelines and has to be
considered incompatible with the common market.

For the Commission

Mario MONTI

Member of the Commission

(5) OJ C 368, 23.12.1994, p. 12.
(6) OJ C 288, 9.10.1999, p. 2.

(7) OJ L 83, 27.3.1999, p. 1.