2003/229/EC: Commission Decision of 30 October 2002 on the extension authorised by Germany of the 8 % investment premium for investment projects in the new Länder granted pursuant to the Finance Law 1996 to Mitteldeutsche Erdöl-Raffinerie GmbH (notified under document number C(2002) 4037) (Text with EEA relevance)
Date: 2002-10-30
Institutions: European Commission
Subjects: German Democratic Republic, State aid, control of State aid, investment aid, oil refining

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COMMISSION DECISION

of 30 October 2002

on the extension authorised by Germany of the 8 % investment premium for investment projects
in the new L(cid:228)nder granted pursuant to the Finance Law 1996 to Mitteldeutsche Erd(cid:246)l-Raffinerie
GmbH

(notified under document number C(2002) 4037)

(Only the German text is authentic)

(Text with EEA relevance)

(2003/229/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(3)

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

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

Having called on interested parties to submit their comments
pursuant to those provisions,

Whereas:

1. BACKGROUND AND PROCEDURE

(1)

(2)

Erd(cid:246)l-Raffinerie GmbH (hereinafter
Mitteldeutsche
referred to as MIDER)
the French
company Elf Aquitaine SA (ELF). It was formed on 23
July 1992 with a view to constructing a refinery in
Leuna, Saxony-Anhalt (the Leuna 2000 project).

is a subsidiary of

By decision of 11 November 1992 (1), the Commission
approved an 8 % investment premium for investment
projects in the territory of the former GDR under the
Investment Premium Law 1993 (Investitionszulagen-
gesetz 1993, hereinafter referred to as the InvZulG).
Article 3(3) of the InvZulG stated that, to qualify for the
8 % premium,
investment projects had to be started
between 31 December 1992 and July 1994 and
completed before 1 January 1997. If a project was not
fully completed within that period, the applicant would
be required to repay the sums already received by way
of the investment premium.

(1) State

aid N 561/92 (cid:151) Germany

(Verl(cid:228)ngerung

der

Investitionszulage in der Ex-DDR).

of

by

the

the

(cid:145)With

schemes

that have

been approved

Gemeinschaftsaufgabe

By decision of 30 June 1993 (2)
the Commission
declared a package of aid for the construction of a
refinery for the Leuna 2000 project compatible with the
common market,
including aid of EUR 184,1 million
(DEM 360 million) in the form of the 8 % investment
this decision reads as
premium. The main part of
follows:
additional
exception
investment aid of DEM 400 million, all aids to be
granted are based on and in accordance with existing
aid
the
Commission (Investitionszulagengesetz: C 59/91, NN
150/91 and N 561/92; F(cid:246)rdergebietsgesetz: C 63/91, N
153/91;
der
regionalen Wirtschaftsstruktur: N 292/92 and NN
83/92).
(cid:145)Taking into consideration the positive
situation and prospects of the refinery industry in the
Community, the growing demand for fuel and distillates
in the new L(cid:228)nder, the beneficial impact the refinery will
have on the development of the Halle region, and the
fact that the planned aids that will be granted pursuant
to the
together with the
additional investment aid of DEM 400 million, do not
cumulation ceiling of 35 % for new
exceed the
constructions,
considered
aid project
compatible with the common market under Article
92(3) of the EC Treaty. [(cid:133)].(cid:146) By decision of 25 October
1994,
the Commission authorised the granting of
additional aid for the Leuna 2000 project (3).

approved aid schemes,

Verbesserung

can be

[(cid:133)].(cid:146)

the

(4)

Article 3(3) of the InvZulG was amended by Article
18(1) of
the Finance Law 1996 (Jahressteuergesetz
to qualify for the 8 %
1996). Under that provision,
premium, the investment project had to be completed
before 1 January 1999, prolonging the deadline for
eligible investments by two years without modifying the
relevant period within which the aided investment had
to be started. The Finance Law 1996 entered into force
on 1 January 1996.

(2) State aid NN 11/93 and N 109/93 (cid:151) Germany (Privatisierung von
Leuna/Minol (cid:151) Investitionsbeihilfe des Landes Sachsen-Anhalt)
(OJ C 214, 7.8.1993, p. 9).

(3) State aid N 543/94 (cid:151) Germany (Erh(cid:246)hung einer Beihilfe des
Raffineriegesellschaft
(OJ C 385, 31.12.1994,

Landes
(cid:145)Mitteldeutsche Erd(cid:246)l-Raffinerie GmbH(cid:146))
p. 35).

Sachsen-Anhalt

neue

die

an

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By letter of 19 December 1995, Germany belatedly
notified the Commission of the amendment.

Article 2

(5)

(6)

(7)

(8)

By decision of 3 July 1996, notified to Germany on 31
the Commission initiated the procedure under
July,
Article 88(2) of the EC Treaty in respect of Article 18(1)
of the Finance Law 1996 (4). It called on Germany, the
other Member States and interested parties to submit
comments. Germany and ELF submitted comments by
letters of 9 September
and 29 October 1996
respectively. On 30 October 1996 France responded to
the views expressed by ELF.

Between December
the
Commission and the German authorities had several
meetings to discuss the matter.

1997,

1996

July

and

it considered that

investments qualifying for
additional

On 16 October 1997 the Commission terminated the
procedure by adopting a final negative decision (5). In
the extension under
its decision,
Article 18(1) of the Finance Law 1996 of the period for
the 8 %
completion of
premium constituted
for
aid
undertakings, which had made investments in the new
L(cid:228)nder. It also stated that that aid did not promote any
additional
investment and thus had to be regarded as
operating aid intended to increase the capital of the
undertakings concerned. It ruled out the possibility of
applying the derogation in Article 87(3)(a) of the EC
Treaty, in particular on the ground that the operating
aid would not benefit exclusively the economy of the
new L(cid:228)nder.

State

(9)

The decision’s operative part reads as follows:

(cid:145)Article 1

Article 18(1) of the Finance Law 1996, which amends
Article 3 of the Investment Premium Law 1993 to the
effect that the 8 % investment premium is now granted
for investment projects which were begun after 31
December 1992 and before 1 July 1994 and are
completed before 1 January 1999 (instead of before 1
January 1997), introduces new, additional State aid for
undertakings which have made investments in the new
L(cid:228)nder. This aid is unlawful, since it was put into effect
in disregard of Article 93(3) of the EC Treaty. The aid is
incompatible with the common market, since it does
not contribute to the achievement of one of
the
objectives referred to in Article 92(2) and (3) of the EC
Treaty.

(4) OJ C 290, 3.10.1996, p. 8.
(5) Commission Decision 98/194/EC of 1 October 1997 concerning
the extension of
the 8 % investment premium for investment
projects in the new L(cid:228)nder pursuant to the Finance Law 1996
(OJ L 73, 12.3.1998, p. 38.

Article 18(1) of the Finance Law 1996 shall be repealed.
Germany shall
recover all aid, which was granted
pursuant to this provision. The aid shall be repaid in
accordance with the procedures and provisions of
German law with interest running from the date of
grant of
the rate
the aid calculated on the basis of
serving as the reference interest rate used in assessing
regional aid programmes.

Article 3

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

Article 4

This Decision is addressed to the Federal Republic of
Germany.(cid:146)

(10) However,

in its decision the Commission stated:

(cid:145)The
above comments, however, are without prejudice to a
possible individual notification by Germany of particular
for MIDER’s
measures modifying the aid package
investment in eastern Germany. Such an amendment
would be examined by the Commission with regard to
the special circumstances of this particular investment
and the positive decision of the Commission on this
project.(cid:146)

(11)

By letter of 13 March 1998, Germany informed the
Commission that the decision had been put into effect
by Article 12 of the Law for the further development of
Germany as a financial centre (Gesetz zur weiteren
Entwicklung des Finanzplatzes Deutschland). As a result,
the Finance Law 1996 was
repealed. The measure
entered into force on 28 March 1998 and the tax
authorities of the L(cid:228)nder sought repayment of the sums
already paid from investors who were unable to
complete their projects before 1 January 1997. The
Land of Saxony-Anhalt demanded from MIDER by
decision of 30 December 1996 repayment of an
investment premium granted for the year 1994 and
amounting to EUR 49,8 million (DEM 97,5 million)
plus interest (EUR 3,4 million). MIDER appealed and
deposited the amount in a blocked account.

(12)

By complaint lodged with the Court of First Instance on
5 January 1998, MIDER took legal action against the
Commission decision of 16 October 1997.

(13) On 30 December 1997 a settlement had been reached
between
f(cid:252)r
vereinigungsbedingte Sonderaufgaben (successor to the

ELF/MIDER and

Bundesanstalt

the

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Treuhand privatisation agency and hereinafter referred
to as BvS) to waive their mutual claims resulting from
the privatisation of
the Leuna 2000 project. The
settlement provided for the payment of EUR 122,7
million (DEM 240 million) by the BvS and EUR 61,4
of
million
Saxony-Anhalt. Germany notified the Commission of
the settlement on 30 January 1998.

(DEM 120 million)

Land

the

by

(14) On 13 March 2000 the Commission adopted a
decision (6) finding that the settlement did not contain
any element of State aid within the meaning of Article
87(1) of the EC Treaty as far as the payment of EUR
122,7 million by the BvS was concerned. With respect
to the payment of EUR 61,4 million by the Land of
Saxony-Anhalt, which was intended to compensate in
part for the 8 % investment premium not received, the
Commission considered that
the measure constituted
State aid but declared it compatible with common
market. However, Germany undertook to leave the
amount of EUR 61,4 million in a blocked account until
the Commission had taken a final decision in procedure
C 47/97 (cid:151) Leuna 2000/ELF/MIDER.

2. JUDGEMENT OF THE COURT OF FIRST INSTANCE
(T-9/98)

judgement

(15) On 22 November 2001 the Court of First Instance gave
in Case T-9/98 (7).
It annulled the
its
Commission Decision of 16 October 1997 concerning
the extension of
the 8 % investment premium for
investment projects in the new L(cid:228)nder pursuant to the
Finance Law 1996 in so far as it concerned MIDER. The
main findings of the judgement are as follows:

(16)

it

that

finally,

the fact

and abstract

in the decision it

should be observed,

examination of
adopts

(cid:145)It
that,
formally, the Commission has been notified of an aid
from examining its
scheme does not prevent
application in a particular case, as well as making a
the
general
scheme.
Similarly,
following its
examination, the Commission can consider that some
scheme notified
specific
constitute aid while others do not, or can declare certain
applications only to be incompatible with the common
market. In the exercise of its wide discretion,
it may
differentiate between the beneficiaries of the aid scheme
notified by reference to certain characteristics they have
or conditions
the
judgement).

they satisfy [(cid:133)].(cid:146)

applications of

(Point 116 of

the

aid

(17)

(cid:145)In the present case, the Commission could not confine
itself
to carrying out a general, abstract analysis of
Paragraph 18(1) of the Finance Law 1996, but was also
obliged to examine the specific case of the applicant.
Such an examination was required not only in view of

(6) State aid N 94/98 (cid:151) Germany.
(7) Case T-9/98, Mitteldeutsche Erd(cid:246)l-Raffinerie GmbH v Commission

[2001] ECR II-3367.

features of

the particular
the applicant’s investment
project [(cid:133)], of which the Commission was fully aware,
but also because, during the administrative procedure,
the German Government had expressly asked for that to
be done.(cid:146) (Point 117 of the judgement).

(cid:145)The documents
in the case and the Commission’s
explanations at the hearing show that to reach those
conclusions the Commission distinguished two different
categories of potential beneficiaries of the aid measure
in question.(cid:146) (Point 121 of the judgement).

in this respect,

the premium, but,

the 8 % investment

The first category consists of the undertakings which
had decided to carry out investment projects in the new
L(cid:228)nder in reliance on the 8 % investment premium, had
started the projects between 1 January 1993 and 30
June 1994 and applied in good time for part payments
of
contrary to their original
expectations, were in the end unable to complete their
In the contested
projects before 1 January 1997.
that
decision the Commission states,
(cid:145)undertakings which have taken investment decisions
regarding
premium without
allowing time for investment-related risks have accepted
investment aid which turns out to be potentially lower
than if they had met the requirements laid down in the
(InvZulG), and despite those risks have regarded their
investment as profitable(cid:146). It says that (cid:145)the extension of
the time-limit does not generate any extra investment
and will probably have no effect on the termination of
investment projects already begun. On being asked by
the Court at the hearing to explain in more detail, the
Commission stated that, with respect to undertakings in
the first category, Paragraph 18(1) of the Finance Law
1996 introduced additional State aid by (cid:147)eliminating the
risk(cid:148) for those undertakings of not completing their
investment projects within the time-limit.(cid:146) (Point 122 of
the judgement).

[(cid:133)] (cid:145)However, the Commission places the applicant in
the first category of undertakings. There is therefore no
need, in the present case, to rule on the correctness of
the definition of the second category, nor, consequently,
on the parties’ differing interpretations of Paragraph 6(1)
of the InvZulG.(cid:146) (Point 124 of the judgement).

(cid:145)As far as the applicant is concerned, Paragraph 18(1) of
the
Finance Law 1996 manifestly introduced no
additional aid, and hence no operating aid.(cid:146) (Point 125
of the judgement).

(cid:145)The documents in the case show that the applicant did
not embark on the Leuna 2000 project while taking the
risk of not being able to complete it before 1 January
the
1997,
the date referred to in Paragraph 3(3) of
InvZulG in the 1993 version. Besides the fact
that
it allowed a certain margin of
time for completing
the project (cid:151) it was originally to be finished in

(18)

(19)

(20)

(21)

(22)

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July 1996 (cid:151),
it must be pointed out that the delay
which occurred resulted from circumstances completely
outside its control which it should not necessarily have
envisaged when it took the decision to invest. It cannot
thus be presumed that
regarded its
investment project as(cid:146) profitable (cid:145)even without the 8 %
premium.(cid:146) (Point 126 of the judgement).

the applicant

a result of the altered notification, MIDER received only
for 1994 an 8 % investment premium amounting to
EUR 49,8 million (DEM 97,5 million) plus interest of
EUR 3,4 million (DEM 6,8 million). The notification of
the investment premiums for MIDER for
the years
1995-1997, and for all other possible aid recipients,
was withdrawn.

(23)

(24)

(25)

and extent of

(cid:145)Nor could the Commission conclude that there was any
other additional State aid in favour of the applicant. In
particular, the Commission, which knew from the outset
the precise nature
applicant’s
investment project and the amount and intensity of the
various aids granted for that project (see, inter alia, the
decision of 30 June 1993), could not but find that those
factors remained wholly unchanged by the extension for
two years of the period for completion of investments
qualifying for the 8 % premium.(cid:146)
the
judgement).

(Point 127 of

the

in this

It notes

(27) As regards interest payments, the Commission received
a letter from ELF dated 19 August 2002 and additional
comments from Germany by letter dated 19 September
2002.
the settlement
expressly provides that MIDER is to repay to BvS any
sum paid to it as an 8 % investment premium, which
would enable it to dispose over an amount greater than
EUR 184,1 million (DEM 360 million). This was also
confirmed by the Court of First Instance (points 31 and
37 of the judgement).

regard that

too,

(cid:145)In any event, even supposing that Paragraph 18(1) of
the Finance Law 1996 introduced additional State aid
for the applicant
there was no justification for
declaring that aid incompatible with the common
market in the applicant’s case. It must be pointed out,
first,
that not only had the Commission raised no
objection to the system of the 8 % investment premium,
it had actually expressly declared the grant of an aid
package for the Leuna 2000 project,
including DEM
360 million as investment premium, to be compatible
with the common market under Article 92(3) of the
the
Treaty, and, second,
period for carrying out the investment project was not
capable of altering the nature and scope of the project
or the amount and intensity of the aid package. In those
the Commission had no reason to
circumstances,
suppose that the extension was such as to distort or
threaten to distort competition, at
to a greater
extent than the Leuna 2000 project originally notified,
so as
incompatible with the common
market.(cid:146) (Point 129 of the judgement).

the mere extension of

to make it

least

that

far as

follows

(cid:145)It
the
from the foregoing that, as
applicant was concerned, the Commission should have
the Finance Law
considered that Paragraph 18(1) of
1996 did not introduce additional State aid, or, at the
least, that the additional aid introduced was compatible
with the
the
judgement).

common market.(cid:146)

(Point 130 of

3. RECENT DEVELOPMENTS AND ASSESSMENT OF THE
MEASURE WITH REGARD TO MIDER

(28)

The Commission takes the view that Article 18(1) of the
Finance Law 1996 introduced additional State aid for
MIDER since the Commission, in its Decision of 30 June
1993,
grant
amounting to EUR 184,1 million (DEM 360 million) (8).

investment

approved

had

not

the

(29) MIDER did not fulfil the requirements of Article 3(3)
InvZulG 1993 and so, under this provision, was not
entitled to the 8 % investment premium amounting to
EUR 184,1 million.

(30)

The amendment to the InvZulG 1993 pursuant to the
Finance Law 1996 introduced new aid for MIDER since,
thanks
to this amendment, MIDER was entitled to
receive investment premiums. But this new aid was not
approved by the Commission and was thus unlawful.

4. CONCLUSION

(31) Germany altered its notification with regard to MIDER
by letter dated 31 July 2002. The notified aid comprises
an 8 % investment premium only for the year 1994
amounting to EUR 49,8 million plus interest of EUR 3,4
million. On the basis of the modified notification, the
Commission has now only to decide
the
compatibility of this modified amount with regard to
MIDER.

about

(26)

Following the annulment of the Commission Decision,
procedure C 28/96 (ex NN 6/96) relating to MIDER was
reopened. In line with the judgement by the Court of
First Instance and in order to allow the Commission to
take a decision in an individual case, Germany, by letter
dated 31 July 2002, altered its original notification
(dated 19 December 1995) of the Finance Law 1996. As

(32)

In conformity with the judgement by the Court of First
Instance in Case T-9/98 and with its earlier Decisions of
11 November 1992 and 30 June 1993, the Commission

(8) The Commission merely declared that (cid:145)all aids to be granted are
based on and in accordance with existing aid schemes that have
been approved by the Commission [(cid:133)].(cid:146)

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confirms that MIDER’s investment premium of 8 % for
the year 1994 is compatible with the common market,
especially as the total aid intensity does not exceed the
35 % regional
limit for cumulated aid in the Land of
Saxony-Anhalt,

Article 2

The 8 % investment premium for MIDER for the year 1994
amounting to EUR 49,8 million plus interest of EUR 3,4
million is compatible with the common market.

HAS ADOPTED THIS DECISION:

Article 3

Article 1

This Decision is addressed to the Federal Republic of Germany.

Article 18(1) of the Finance Law 1996, which amends Article
3 of the Investment Premium Law 1993 to the extent that the
in future be granted for
8 % investment premium will
investments begun after 31 December 1992 and before 1 July
1994 and completed before 1 January 1999 instead of 1
January 1997, creates new and additional State aid amounting
to EUR 49,8 million plus interest of EUR 3,4 million in favour
of MIDER. The aid measure is unlawful since it has been
implemented in breach of Article 88(3) of the EC Treaty.

Done at Brussels, 30 October 2002.

For the Commission

Mario MONTI

Member of the Commission