2003/706/EC: Commission Decision of 23 April 2003 on the aid scheme implemented by Germany entitled "Guarantee schemes of the Land of Brandenburg for 1991 and 1994" — State aid C 45/98 (ex NN 45/97) (Text with EEA relevance.)(notified under document number C(2003) 1217)
Date: 2003-04-23
Institutions: European Commission
Subjects: Brandenburg, Germany, State aid, control of State aid, credit guarantee

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 23 April 2003

on the aid scheme implemented by Germany entitled ‘Guarantee schemes of
Brandenburg for 1991 and 1994’ State aid C 45/98 (ex NN 45/97)
(notified under document number C(2003) 1217)

the Land of

(Only the German version is authentic)

(Text with EEA relevance)

(2003/706/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(3)

Having regard to the Treaty establishing the European Commu-
nity, 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 the provisions cited above,

Whereas:

1. PROCEDURE

(1)

(2)

During the period 1991-1994 the Land of Brandenburg
operated a guarantee scheme for industry, the profes-
sions and agriculture/forestry dating from 5 September
1991 (Bürgschaftsrichtlinie des Landes Brandenburg für
die Wirtschaft und die freien Berufe sowie die Land-
und Forstwirtschaft vom 5. September 1991), hereinafter
called the 1991 guarantee scheme. The scheme was
never
to
Article 88(3) of the EC Treaty.

the Commission

pursuant

notified

to

The 1991 scheme was superseded on 17 May 1994 by
an amended guarantee scheme (hereinafter called the
1994 guarantee scheme), which was not notified in
time to the Commission either. The 1994 guarantee
scheme applied in its original version until 20 March
1995. On that date the scheme, which had been notified
belatedly, was suspended. The Commission approved a
significantly modified version for
application after
20 March 1995 (SG(96) D/7438) (1).

By letter dated 14 July 1998 (SG(98) D/5743),
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 both the 1991 guarantee scheme
and the 1994 guarantee scheme in the version applic-
able until 20 March 1995.

The application of both schemes to the production,
processing and marketing of
the agricultural products
referred to in Annex I
to the EC Treaty did not,
however, form the subject-matter of the formal investi-
gation procedure.

The Commission's decision to initiate the procedure was
published in the Official Journal of the European Commu-
nities (2). The Commission invited interested parties to
submit their comments on the measure, but did not
receive any such comments.

submitted

Germany
dated
comments
11 September 1998, 2 October 1998 and 25 May
1999 and at meetings on 11 and 12 May 1999.

letters

by

On 28 January 2003 a meeting took place between the
Commission and Germany in Berlin. In the course of
that meeting the Commission requested additional infor-
mation on the current situation with regard to the
enterprises
the 1991 and
1994 guarantee schemes.

that had benefited under

(4)

(5)

(6)

(7)

(8)

Germany submitted final comments by letter dated
20 March 2003.

(1) OJ C 291, 4.10.1996.

(2) OJ C 369, 28.11.1998, p. 4.

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2. DESCRIPTION OF THE 1991 GUARANTEE SCHEME

4. GROUNDS FOR INITIATING THE FORMAL

INVESTIGATION PROCEDURE

2.1. Aid recipients

(9)

The Land of Brandenburg provided guarantees to credit
institutions granting loans to enterprises (both SMEs and
large
to
managers willing to hold shares in an enterprise.

to professional people

enterprises),

and

2.2. Assisted projects

(10) Under the 1991 scheme,

the following projects were

eligible:

— initial investments (Neuinvestitionen),

— acquisition of operating funds

(Beschaffung von

Betriebsmitteln),

— ex post

financing of

investments (Nachfinanzierung

von Investitionen),

— consolidation (Konsolidierung),

— reorganisation (Sanierung).

2.3. Conditions governing the provision of

guarantees

(11)

(12)

(13)

(14)

(15)

The conditions for the provision of guarantees to cover
loans include the requirements that the risk of default,
under normal economic circumstances, be proportionate
to the objective pursued,
the guarantee be an
essential precondition for an enterprise obtaining a
bank loan for a project in the absence of alternative
forms of security, and that the borrower offer all addi-
tional
reasonably be
demanded.

forms of

collateral

as may

that

The borrower must pay a one-time fee for the giving of
the guarantee of 0,5 % of the guaranteed amount, and
an annual administrative charge of 0,5 % of the amount
outstanding.

The guarantee amount
is fixed in each case by the
Minister for Finance of the Land of Brandenburg. It is
limited as a rule to a reasonable proportion of the loan
or of the deficiency.

Guarantees securing loans for the purpose of reorga-
nising a firm are granted solely on the basis of a
restructuring plan aimed at restoring the firm's long-
term viability.

3. THE 1994 GUARANTEE SCHEME

In its main characteristics, the 1994 scheme is largely
identical to the 1991 scheme. Differences exist in so far
as, compared with the 1991 scheme,
it contains new
provisions limiting the guarantee amount to 80 %, or in
some cases to 90 %, of the loan.

(16)

the schemes to initial
As regards the application of
investment projects,
the Commission raised serious
doubts as to the compatibility of the schemes with the
common market for the following reasons:

(a) when it came to deciding whether such projects
were covered, the schemes did not refer either to
investment set
the Community definition of initial
out in point 5 of the Annex to the Commission's
1979 communication on regional aid systems (3) (the
1979 communication) or to eligible costs. Thus the
schemes were not transparent within the meaning of
the 1979 communication and the possibility could
not be ruled out that they covered aid unrelated to
initial investment projects within the meaning of the
above definition (e.g. aid towards capital expenditure
on replacements) which must be treated as operating
aid;

(b) if the assistance was to be considered regional aid,
the schemes failed to provide a ceiling in cases of
combination with other forms of aid;
it was there-
fore impossible to verify the combination ceilings
applicable to aid in the Brandenburg region;

(c) the guarantees provided under the schemes could
the entire loan (the 1991 guarantee
cover either
the loan (the 1994
scheme) or up to 90 % of
guarantee scheme). According to the Commission's
settled practice, in order to make sure that a project
the recipient's contribution
is economically viable,
without State aid must
form a sufficient part,
normally accounting for at least 20 % of the loan;

(d) the scope of the schemes does not preclude their
application to sensitive industries for which there are
specific rules on State aid.

the schemes
to
(17) With regard to the application of
projects to acquire operating funds,
the Commission
expressed serious doubts as the provision of guarantees
for projects to acquire operating funds must be consid-
the schemes are neither
ered operating aid. However,
limited in time nor do they embody a sliding scale,
which is contrary to the Commission's settled practice (4)
on operating aid which can be provided on certain
conditions in assisted regions under Article 92(3)(a)
suffering from serious structural handicaps.

(3) OJ C 31, 3.2.1979, p. 9.
(4) See point 6 of the Commission communication on the method for
the application of Article 92(3)(a) and (c) to regional aid (OJ C 212,
12.8.1988, p. 2).

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(18)

(19)

As regards the application of the schemes to the ex post
financing of investments, the schemes do not specify the
cases in which guarantees can be provided for such
financing. According to the Commission's settled prac-
tice, however, the granting of aid for investments that
have already been effected when the application is made
cannot be considered compatible with the common
market if such aid is not necessary for the implementa-
tion of the investment project. Such assistance consti-
tutes operating aid, which can be considered compatible
with the common market only if the abovementioned
criteria are met
the acquisition of
(see projects for
operating funds).

As to the application of
restructure firms
subject
in difficulty,
compliance with the following specific conditions (5):

the schemes to projects to
to

the aid is

(a) if there is overcapacity in the industry, a plan for
reducing capacity in proportion to the amount of
aid granted must be presented in the cases of both
large firms and SMEs holding a dominant position
on the relevant market;

(b) the recipient must bear an appropriate part of the

restructuring costs;

(c) compliance with the principle that restructuring aid
may only be granted once unless the new need for
restructuring funding was neither foreseeable by the
enterprise nor a result of its negligence;

(d) the aid is restricted to that necessary for the imple-

mentation of the restructuring plan;

(e) the presentation of a restructuring plan showing that
the enterprise is economically viable and can make a
real contribution to the development of the region
without continually requiring aid;

(f) the exclusion from the schemes of sensitive indus-
tries subject to specific rules on State aid and the
requirement of individual notification where guaran-
tees are provided for large firms.

5. COMMENTS FROM GERMANY

(20) Within the period covered by the present proceeding,
the Land of Brandenburg awarded a total of 68 guaran-
tees, six of which were granted for
the production,
processing and marketing of agricultural products listed

in Annex I to the EC Treaty. These six guarantees are
not covered by this proceeding. Firms active in other
sensitive sectors were not granted any aid.

(21) According to Germany, all cases of application involve
guarantees
investment projects
loans
pursuant to the Community definition of initial invest-
ment laid down at point 5 of the 1979 communication.
This would imply that the regional aid rules apply.

securing

for

(22) As to the application of the schemes to projects invol-
ving operating aid, it is Germany's view that guarantees
were only provided for compatible operating aid, in so
far as all guarantees granted for operating funds were
limited in time and embodied a sliding scale of 20 %
per year.

(23) A detailed examination was also made of those cases of
application in which the aid element of a guarantee was
covered by the de minimis rule. In cases of guarantees
awarded to sound enterprises, Germany takes the view
that the provisions of the de minimis rule were met at
the granting stage. Moreover, Germany holds, on the
basis of an alleged aid value of a guarantee of 0,5 %,
that the granting under the 1991 and 1994 schemes
remained within the de minimis ceiling.

(24) Germany recognises that guarantees were provided for
projects to restructure enterprises in three cases alto-
gether, but points out that of these enterprises none is
currently still active on the market.

(25) Germany admits furthermore that guarantees covering
in
up to 90 % of
Germany's view, was
in compliance with the 23rd
Framework Plan of the joint Federal Government/Länder
programme for
improving regional economic struc-
tures (6).

the loan were provided, which,

falls outside the scope of

(26) As to the legal aspects, Germany takes the view that the
1991 scheme, operating from 5 September 1991 until
the 1994
16 May 1994,
Community guidelines on State aid for rescuing and
restructuring firms in difficulty (7), which entered into
force on 23 December 1994. Furthermore, the scheme
schemes approved by the
is comparable to several
Commission between 1988 and 1992. Germany recalls
that the Commission changed its policy on state guar-
antees only in mid-1994 by a series of appropriate
measures. For these reasons, Germany concludes that
the 1991 scheme has to be appraised on the same legal
basis as the then existing schemes in several German
Länder.

(5) See, for example, the Commission's Eighth Report on Competition

Policy, points 227-229, Brussels, Luxembourg, 1979.

In force from 1 January 1994 until 17 March 1995.

(6)
(7) OJ C 368, 23.12.1994, p. 12.

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(27)

(28)

6. LEGAL ASSESSMENT

6.1. Existence of State aid

considered that

all State guarantees

By a letter dated 5 April 1989 concerning State guaran-
tees (8), as supplemented by a letter dated 12 October
1989 (9), the Commission informed Member States that
fell under
it
Article 87(1) (then Article 92(1)) of the EC Treaty and
accordingly had to be notified pursuant to Article 88(3)
(then Article 93(3)) of the EC Treaty. Thus, at the latest
as from 5 April 1989, Member States could no longer
entertain any doubts that all State aid in the form of
guarantees had to be notified.

In order to provide Member States with a fuller expla-
nation of the principles on which it relied when inter-
preting Articles 87 and 88 and when applying those
articles to State guarantees, the Commission published
its notice on the application of Articles 87 and 88 of
the EC Treaty to State aid in the form of guarantees (10)
(hereinafter called the 2000 notice). The Commission
thus further clarified its approach in this area in order
to make its policy as transparent as possible, thereby
ensuring that its decisions are predictable and that equal
treatment is guaranteed. In particular, the Commission
considered therein that only the fulfilment of
the
that a state guarantee
following conditions ensures
scheme
under
Article 87(1):

constitute

State

does

not

aid

(a) the scheme does not allow guarantees to be given to

borrowers who are in financial difficulty;

(b) the borrowers would in principle be able to obtain a
financial
conditions

loan on market
markets without any intervention by the State;

from the

(c) the guarantees are linked to a specific financial
transaction, are for a fixed maximum amount, do
not cover more than 80 % of each outstanding loan
financial obligation and are not open-
or other
ended;

(d) the terms of

the scheme are based on a realistic
assessment of the risk so that the premiums paid by
the recipient enterprises make it,
in all probability,
self-financing;

(e) the scheme provides for the terms on which future
guarantees are given and the overall financing of the
scheme to be reviewed at least once a year;

(f) the premiums cover both the normal risks associated
with providing the guarantee and the administrative

the scheme,

costs of
provides the initial capital
scheme, a normal return on that capital.

including, where the State
the
for the start-up of

Taking into account that the 1991 and 1994 schemes
neither excluded borrowers facing liquidity difficulties
who would, without the state guarantee, not obtain a
loan on market conditions, nor required any risk assess-
the
ment or a bank coverage of at
outstanding loan,
it is considered that these conditions
are not met by the Brandenburg schemes.

least 20 % of

(29)

In the 2000 notice the Commission indicates that the
cash equivalent of a loan guarantee in a given year can
be:

loan,

(a) calculated in the same way as the grant equivalent of
the interest subsidy representing the
a soft
difference between the market
rate and the rate
obtained thanks to the state guarantee after any
premiums paid have been deducted; or

(b) taken to be the difference between the outstanding
sum guaranteed, multiplied by the risk factor (the
probability of default) and any premium paid,
i.e.
(guaranteed sum x risk) — premium; or

(c) calculated by any other objectively justifiable and

generally accepted method.

(30)

(31)

(32)

The 2000 notice stipulates that the standard form of
calculation for guarantee schemes should,
in principle,
be the second method.

connection the Commission has
examined
In this
the guarantee schemes constitute de minimis
whether
schemes,
i.e. measures under which aid may not be
granted which exceeds the de minimis limits of Commis-
sion Regulation (EC) No 69/2001 of 12 January 2001
on the application of Articles 87 and 88 of
the EC
Treaty to de minimis aid (11) and hence which does not
fulfil all the requirements of Article 87(1) of
the EC
Treaty.

Since Regulation (EC) No 69/2001 entered into force
only on 2 February 2001, whereas
the guarantee
schemes applied from 5 September 1991 to 16 May
1994 and from 17 May 1994 to 20 March 1995, the
question arises whether de minimis aid granted before
Regulation (EC) No 69/2001 entered into force is
governed by that Regulation or by the de minimis provi-
sions of the Community's 1992 SME guidelines (12) and
the Commission's 1996 de minimis notice (13).

(8) SG(89) D/4328 of 5 April 1989.
(9) SG(89) D/12772 of 12 October 1989.
(10) OJ C 71, 11.3.2000, p. 14.

(11) OJ L 10, 13.1.2001, p. 30.
(12) OJ C 213, 19.8.1992, p. 2.
(13) OJ C 68, 6.3.1996, p. 9.

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(33)

(34)

(35)

the immediate application of

for exemption on this basis will

Regulation (EC) No 69/2001 is silent on this point.
However,
its wording does not rule out its application
to previous cases, which in any event are subject to the
control mechanism laid down in Article 3 of
the
Regulation. The Commission has reached the conclusion
in the absence of any express provision to the
that,
contrary in Regulation (EC) No 69/2001, the Regulation
should apply to de minimis aid granted before it entered
into force. For one thing, the Regulation, in so far as it
exempts a particular category of measure from the
notification requirement, is a procedural regulation and
should thus apply immediately to all pending proceed-
ings. For another,
the
Regulation is in line with the underlying objectives of
procedural simplification and decentralisation. Only in
respect of aid not caught by the Regulation and thus
not eligible
the
Commission take account of the provisions that were
in force when the aid was granted. Since the Regulation
than its de minimis
is,
predecessors and since the latter apply in any event to
cases where the aid concerned is not exempt under the
Regulation, due regard is paid to the general
legal
legitimate expectation and legal certainty.
principles of
the Commission takes
From an economic standpoint,
the view that measures which cannot be classed as aid
within the meaning of Article 87(1) of the EC Treaty
under Regulation (EC) No 69/2001, in force today in an
integrated market, a fortiori cannot
in the past have
given rise to any aid in a less integrated market. It will
therefore base its further assessment of the 1991 and
1994 guarantee schemes on Regulation (EC) No 69/
2001, which does not rule out the possibility of the
provisions
the time the measures were
implemented being applied, provided that the measures
concerned are not exempt under Regulation (EC) No 69/
2001.

in principle, more generous

in force at

The proceedings initiated thus cover both the guarantee
schemes and the cases of application which do not fall
within the scope of Regulation (EC) No 69/2001 or the
other relevant de minimis provisions and the cases which
do fall within the scope of the Regulation or of the
other relevant de minimis provisions but in which the de
minimis ceiling is exceeded.

It

the loan.

is not possible to conclude that

The Commission takes the view that the aid element in
the guarantee depends on the risk factor, which in turn
depends on all the circumstances of the guarantee and
the
of
administrative charge of 0,5 % and the one-off payment
of 0,5 % of
the amount covered by the guarantee
provided for under the Brandenburg schemes would in
all cases correspond to the market premium for the
these
guarantee. Germany has
charges were sufficient to compensate for the substantial
default
In fact,
risk resulting from the guarantees.
Germany admits that a substantial part of
the firms
that benefited from the guarantees have gone bankrupt
in the meantime.

failed to prove that

(36)

(37)

The Commission does not share Germany's view that
the aid element contained in the guarantees can be set
in principle at 0,5 %. Germany has provided no
evidence that this percentage results from one of the
methods for calculating the aid element in a guarantee
scheme. In the Commission's view, the aid amount may
even be as high as the amount actually secured by the
guarantee if, at the time of the loan decision, there is
clearly a strong probability of
the borrower being
unable to repay his debt.

the aid
The Commission accordingly concludes that
element in the guarantees under the two Brandenburg
schemes may have exceeded the scope of Regulation
(EC) No 69/2001 and hence that it may be possible
that guarantees were provided which conferred an
advantage on an enterprise compared with other enter-
prises and thereby distorted or at least threatened to
distort competition.

6.2. Lawfulness of the aid

(38)

The Commission notes that in 1991, when the 1991
guarantee scheme entered into force,
there was no
provision on de minimis aid. The 1991 scheme was thus
not exempted from the notification requirement under
Article 88(3) of the EC Treaty. The Commission regrets
that,
in granting the aid, Germany acted in breach of
Article 88(3) of the EC Treaty.

6.3. Compatibility of

the aid with the common
market in so far as the scope of Regulation
(EC) No 69/2001 or of the other relevant de
minimis provisions was exceeded

6.3.1. Compatibility with regional aid rules

(39)

The gist of the regional aid rules was laid down in the
1979 communication. These rules were refined by
specific rules on the criteria for eligibility as assisted
area, and concerning operating aid, contained in the
the Commission
1988 communication.
proceeded to consolidate all the criteria applied to date

In 1998,

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in the guidelines on national regional aid (14) (hereinafter
called the ‘regional aid guidelines’). According to their
point 6, these guidelines are applied to aid notified or
granted after
their entry into force. Aid notified or
granted before this date has to be examined on the
basis of the earlier rules (15). In view of the operational
periods of
the 1979
communication, as amended by the 1988 communica-
tion, applies. An assessment based on the 1998 regional
aid guidelines would not in principle lead to a more
favourable conclusion. For SME aid, which does not
constitute operating aid,
the Commission applies first
and foremost Regulation (EC) No 70/2001, as amended.

two guarantee

schemes,

the

(40) Articles 87(3)(a) and (c) of the EC Treaty provide two
possibilities where
the Commission may
distinct
regional aid compatible with the common
consider
market. The schemes under examination apply in Bran-
denburg, an assisted region that was eligible for regional
aid
to
Article 87(3)(a) of the EC Treaty (16).

in question pursuant

the period

during

(41)

The Commission distinguishes in the field of regional
aid between aid to initial investment and operating aid.

(42)

the guarantee schemes included both
The scope of
investment and replacement investment aid. Aid
initial
investment
excluded from the
is
for
replacement
concept of initial
investment of the 1979 communica-
tion and has to be considered operating aid. The scope
of the schemes further covered operating funds as well
investment. As to the latter,
as ex post
according to the Commission's
the
granting of aid for investments that have already been
carried out when the application is made is also deemed
to be operating aid. The same holds for aid for oper-
ating funds.

settled practice,

financing of

6.3.1.1. I n it ia l

inve s tm e n t ai d

(43)

The 1979 communication defined aid for initial invest-
ment as aid linked to investment in fixed assets in the
creation of a new establishment, the extension of an
existing establishment or
in engaging in an activity
involving fundamental change in the product or produc-
tion process (by means of rationalisation, restructuring
or modernisation).

(14) OJ C 74, 10.3.1998, p. 9.
(15) OJ C 119, 22.5.2002, p. 22.
(16) See for the period 1991-94, N 153/91, and for the period 1994-96,

N 464/93.

(44) As regards investment aid,

applicable under

the Commission wrote to
Germany in 1991 (17) confirming the extension of the
regional maximum intensities
the
outline plan of common interest to the new German
Länder. On this basis, initial investment could be assisted
to the tune of 23 % gross, extension projects to the
tune of 20 % gross, and rationalisation and reorganisa-
tion to the tune of 15 %. These ceilings could be raised
to 35 % gross when the aid was combined with other
public funding. In 1994, the Commission confirmed this
assessment, authorising aid intensities up to 35 % gross
for large enterprises and up to 50 % gross for SMEs (18).

(45)

For the period in question, and notwithstanding specific
rules applicable to investment aid to firms active in
investment in
sensitive sectors, aid schemes for initial
the assisted region of Brandenburg are
considered
compatible with the common market, provided the
scheme, in case of combination with any other regional
to be
aid, does not allow the above aid ceilings
exceeded. This holds also for initial
investment aid to
firms in difficulty. In fact, it was established Commission
policy until 1999 to allow for the provision of regional
initial investment aid under regional investment schemes
without excluding firms in difficulty, or requiring indivi-
dual notification to the Commission (19).

6.3.1.2. O pe ra ti n g a id

(46)

severe disadvantages of

To the extent that guarantees were provided in favour of
viable firms for purposes other than to finance initial
investment, they can be considered to constitute oper-
less-
ating aid. Given the
favoured regions, operating aid may fall under
the
derogation in Article 87(3)(a) of the EC Treaty in so far
as such aid is justified as contributing to the develop-
ment of the region concerned. In addition, the whole
economy of the Land of Brandenburg, an assisted region
under Article 87(3)(a), had to face significant problems
due to the weakness of the capital market at the time
the schemes were being implemented. The granting of
operating aid, therefore, is considered to have favoured
development and to have alleviated the existing handi-
caps during the period 1991-1994. The Commission

(17) N 153/91 — SG(91) D/6968 of 11 April 1991.
(18) SG(94) D/1551 dated 4 February 1994, N 464/93/part new Länder

— in relation to N 531/1995, OJ C 291, 4.10.1996, p. 4.

(19) The Commission changed its policy in this field in 1999 by
adopting the 1999 guidelines and associated appropriate measures
pursuant to Article 88(1) of the EC Treaty that require individual
notification of initial investment aid to large firms in difficulty.

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that Germany has confirmed that no
notes further
enterprise active in a sensitive sector (steel, shipbuilding,
synthetic fibres, textiles) forms the subject-matter of this
proceeding. The Commission accordingly finds that,
in
so far as they provided for operating aid for viable
firms, the guarantee schemes are compatible with the
common market.

far as, when combined with other public funding,
does not exceed the relevant regional aid ceilings.

it

(52) Operating aid granted on the basis of the schemes to

viable firms is compatible with the common market.

6.3.2. Compatibility with restructuring aid rules

(53)

(47) Aid granted in favour of

firms in difficulty, which
cannot be regarded as regional aid for initial investment
is to be considered restructuring aid. The Commission
will not, however, carry out an examination of
the
compatibility of
the guarantees with the restructuring
aid rules as the three firms in difficulty which received
aid on the basis of the two guarantee schemes are no
longer active on the market; an examination of the aid
has thus become devoid of purpose.

6.3.3. Compatibility on the basis of other derogations

(48) Article 87(2) of

the EC Treaty, and in particular
Article 87(2)(c), does not apply to both schemes. The
schemes address general regional economic weaknesses
of enterprises in the Land of Brandenburg and do not
particularly address specific disadvantages caused by the
division of Germany. Nor does Germany take the view
that the derogation laid down in this article applies. In
addition, the Commission considers that the State aid in
question is not destined to promote the execution of an
important project of common European interest or to
remedy a serious disturbance in the economy of a
Member State within the meaning of Article 87(3)(b) of
to promote culture and heritage
the EC Treaty, or
conservation within the meaning of Article 87(3)(d).

7. CONCLUSIONS

(49)

The 1991 and 1994 guarantee schemes were not noti-
fied and therefore constitute unlawful aid within the
meaning of Article 88(3) of the EC Treaty. Aid which
was granted outside the scope of Regulation (EC)
No 69/2001 was granted unlawfully.

(50) Germany has confirmed that firms active in sensitive
this
form the

subject-matter of

sectors do not
proceeding.

is

is

confirmed

the Commission's

long-established practice,

It
in
accordance with Article 87 of the EC Treaty, to require
recovery from the aid recipient of State aid within the
meaning of Article 87(1) of the EC Treaty, which has
been unlawfully granted and is incompatible with the
common market. This practice
by
Article 14 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 (20). Pursuant
to that article, the Member State concerned must take
all necessary measures to recover
the aid from the
recipient. In order to determine in which cases recovery
has to be effected, Germany should be required to draw
up a list of aid measures which neither satisfy the
conditions of Regulation (EC) No 69/2001 nor comply
with the de minimis provisions in force when a given
measure was implemented,

HAS ADOPTED THIS DECISION:

Article 1

Subject to paragraphs 2 and 3, the guarantee scheme of
1.
the Land of Brandenburg for industry,
the professions and
agriculture/forestry for the period from 5 September 1991 to
16 May 1994 (hereinafter called the 1991 guarantee scheme)
and the guarantee scheme of the Land of Brandenburg for the
period from 17 May 1994 to 20 March 1995 (hereinafter
called the 1994 guarantee scheme) constitute State aid within
the meaning of Article 87(1) of the EC Treaty.

2.
The guarantee schemes do not constitute State aid within
the meaning of Article 87(1) of the EC Treaty in so far as the
advantages they conferred satisfy the requirements of Regula-
tion (EC) No 69/2001 or of the de minimis provisions in force
at
in
the time a particular measure was implemented and,
combination with other de minimis aid, do not exceed the de
minimis ceilings of Regulation (EC) No 69/2001 or of
the
applicable de minimis provisions.

3.
The guarantee schemes do not constitute State aid within
the meaning of Article 87(1) of the EC Treaty in so far as they
benefited enterprises involved in producing goods or providing
services, which are not the subject of trade between Member
States.

extent

To the

4.
scope of
Article 87(1) of the EC Treaty, the guarantee schemes consti-
tute unlawful aid.

they fall within the

that

(51) Aid for initial

investment granted on the basis of the
schemes is compatible with the common market in so

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

L 263/8

EN

Official Journal of the European Union

14.10.2003

Article 2

initial

Aid within the meaning of Article 87(1) of the EC Treaty for
enterprises'
investment projects is compatible with the
common market provided Germany has limited the combined
aid amount for such projects to 35 % gross for large enter-
prises and 50 % gross for SMEs. Any aid exceeding the ceiling
set is incompatible with the common market.

Article 3

Operating aid within the meaning of Article 87(1) of the EC
Treaty in favour of viable enterprises is compatible with the
common market.

Article 4

This Decision does not apply to those cases covered by the
that have already been the subject of
guarantee schemes
another
formal
Commission decision.

investigation procedure or of

formal

a

For the purposes of implementing this Decision, Germany shall
draw up a list of the enterprises concerned.

basis of
equivalent of regional aid.

the reference rate used for calculating the grant

Article 6

Germany shall, in implementing this Decision, draw up a list
of the firms concerned in cases which fall outside the scope of
Regulation (EC) No 69/2001 or which,
the aid element
contained in the guarantee and other de minimis aid granted
during the relevant period are included, exceed the ceiling laid
down in that Regulation.

if

In this connection, Germany shall devise a method of identi-
fying the aid element in the guarantee based on the Commis-
sion notice on the application of Articles 87 and 88 of the EC
Treaty to State aid in the form of guarantees.

Article 7

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

Article 8

Article 5

This Decision is addressed to the Federal Republic of Germany.

Germany shall take all necessary measures to recover from the
recipients the aid referred to in Article 2 and unlawfully made
available to them.

Recovery shall be effected in accordance with the procedures
of national law. The aid to be recovered shall include interest
from the date on which it was at the disposal of the recipients
until the date of its recovery. Interest shall be calculated on the

Done at Brussels, on 23 April 2003.

For the Commission

Mario MONTI

Member of the Commission