Case T-425/04: Action brought on 13 October 2004 by French Republic against Commission of the European Communities
Date: 2005-01-22
Institutions: Court of First Instance
Subjects: European Commission, France, State aid, action for annulment (EU), control of State aid, telecommunications industry

C 19/30

EN

Official Journal of the European Union

22.1.2005

Pleas in law and main arguments:

applicant maintains that the complete absence of any legal
basis which would allow the reduction made in the contested
decision shows that, in adopting that decision, the defendant
completely disregarded the purpose of the Regulation under-
lying the measure, thereby also misusing its powers.

The contested decision in this case is Commission Decision
2004/592/EC of 23 July 2004 [C(2004) 2837 final] amending
Decision 1999/659/EC fixing an indicative allocation by
Member State of the allocations under the European Agri-
cultural Guidance and Guarantee Fund-Guarantee section for
rural development measures for the period 2000 to 2006. (1)

In the further alternative, the applicant pleads infringement of
the principle of the protection of legitimate expectations and of
the duty to give a statement of the reasons on which a measure
is based.

According to the applicant, the amendment contained in the
contested decision not only adapts the allocation of Com-
munity funds to the Italian Republic for 2004 in respect of the
expenditure forecasts submitted by the latter, but redetermines
the total allocation of funds for the Italian Republic, reducing
by about EUR 40 million – by setting a total allocation of
EUR 4 473.2 million – the amount available under the ‘Berlin
envelope’ (EUR 4 512.3 million).

In support of its claims, the applicant pleads infringement of
the principle of non-retroactivity. It argues that Regulation No
817/2004 (2) was adopted on 20 April 2004 and entered into
force on 7 May 2004, long after expiry of the time-limit of 30
September
laid down in Article 47(1) of Regulation No
445/2002 for the Member States to forward to the Commission
the statement of expenditure incurred in 2003 and expenditure
remaining to be disbursed by the end of that year, and the fore-
casts for 2004 and subsequent years. The Commission should
therefore have determined the budget appropriations for 2004
on the basis of the provisions of Article 49 of Regulation No
445/2002, which was still in force on 30 September 2003, and
not on the basis of Article 57 of Regulation No 817/2004.
in 2004 the Commission was not entitled to
Accordingly,
adopt the contested decision, which relies on the new imple-
menting rules of Regulation No 1257/1999 (3) as its legal basis,
or make the relevant adjustment of the initial allocations by
Member State defined in Decision 659/1999, as amended by
Decision 426/2000, provided for by Article 57, cited above.

In the alternative, even if it is held that Regulation 817/2004,
and in particular Article 57 thereof in its entirety, was correctly
applicable also to the forecasts provided by the Member States
by 30 September, under Regulation No 445/2002, the appli-
cant disputes that the Commission is authorised to revise the
allocations laid down by Decision 1999/659, as amended by
Decision 2000/426, by reducing the total allocation under the
‘Berlin envelope’ and, in any event, contends that that reduction
could not include the Italian Republic. In that connection, the
applicant alleges infringement of Article 46 of Regulation No
1257/1999 and of Article 57 of Regulation No 817/2004. The

(1) OJ L 263 of 10.8.2004, p. 24.
(2) Commission Regulation (EC) No 817/2004 of 29 April 2004 laying
down detailed rules for the application of Council Regulation (EC)
No 1257/1999 on support for rural development from the Euro-
pean Agricultural Guidance and Guarantee Fund (EAGGF) (OJ L 153
of 30.4.2004, p. 30).

(3) Council Regulation (EC) No 1257/1999 of 17 May 1999 on
support
from the European Agricultural
Guidance and Guarantee Fund (EAGGF) (OJ L 160 of 26.6.1999, p.
80).

for rural development

Action brought on 13 October 2004 by French Republic
against Commission of the European Communities

(Case T-425/04)

(2005/C 19/64)

(Language of the case: French)

An action against the Commission of the European Commu-
nities was brought before the Court of First Instance of the
European Communities on 13 October 2004 by the French
Republic, represented by its Agents Ronny Abraham, Géraud
de Bergues and Stéphanie Ramet, with an address for service in
Luxembourg.

The applicant claims that the Court should:

— annul in its entirety Commission Decision No C(2004)360
of 2 August 2004 concerning State aid paid by France to
France Télécom;

— order the Commission to pay the costs.

22.1.2005

EN

Official Journal of the European Union

C 19/31

Pleas in law and main arguments:

In support of its action, the applicant relies, first, on an infrin-
gement of essential procedural requirements and the rights of
the defence. According to the applicant, the Commission based
its decision on factors, namely ministerial proposals of 12 July
2002, which are outside the scope of the procedure as defined
by the decision to open the procedure. The applicant claims
that the Commission should have extended the procedure by
adopting a new decision to open it.

The applicant also relies on an error of law in relation to the
concept of State aid within the meaning of Article 87(1) EC.
According to the applicant, the Commission wrongly applied
the principle of the private investor who is fully informed of
the conditions of a market economy. According to the appli-
cant, since the ministerial proposals did not amount
to a
commitment on the part of the State and could not be cate-
gorised as State aid, the principle of the fully-informed private
investor was not applicable. The applicant also maintains that
the Commission wrongly held there to be aid on the basis of
two separate events which, taken separately, it would have to
accept did not comprise the elements necessary for the categor-
isation of State aid to apply. Those events are the statements of
July 2002 and the draft shareholder's advance of December
2002.

Thirdly, the applicant claims that the Commission committed a
manifest error of assessment when it took the view that an
analysis of the contents of the interview of 12 July 2002
allowed it to be concluded that the State was giving an under-
taking as a shareholder, which would have had an influence on
the markets in December.

submits

the applicant

Lastly,
the reasoning adopted
contains contradictions and inadequacies which lead to the
contested decision being vitiated on the ground of a lack of
proper reasoning.

that

Action brought on 13 October 2004 by French Republic
against Commission of the European Communities

(Case T-427/04)

(2005/C 19/65)

(Language of the case: French)

An action against the Commission of the European Commu-
nities was brought before the Court of First Instance of the

European Communities on 13 October 2004 by the French
Republic, represented by its Agents Ronny Abraham, Géraud
de Bergues and Stéphanie Ramet, with an address for service in
Luxembourg.

The applicant claims that the Court should:

— annul in its entirety Commission Decision No C(2004)361
of 2 August 2004 concerning State aid paid by France to
France Télécom;

— order the Commission to pay the costs.

Pleas in law and main arguments:

The contested decision in this case held that the business tax
regime applying to France Télécom (FT) between January 1994
and December 2002 constituted State aid which was incompa-
tible with the common market.

In support of its claims, the applicant argues, first, that the
Commission committed a manifest error of assessment and an
error of law. In that regard,
it challenges the Commission's
analysis of the tax regime applying to FT under Law No 90-
568 of 2 July 1990 on the organisation of the French Postal
Service and France Télécom. This had led the Commission to
treat the levy paid by FT between 1991 and 1993 as being of a
mixed character, whereas it was purely fiscal in nature and to
take the view that FT had been subject to two separate tax
regimes between 1991 and 2002, whereas there had been a
single regime, divided into two periods. The defendant should
accordingly have applied an offset in respect of the 1991-2002
period.

The applicant also claims infringement of Article 15 of Regu-
lation No 659/1999 laying down detailed rules for the applica-
tion of Article 93 of the EC Treaty, inasmuch as the Commis-
sion should have held that there had been a period of ten years
between the day when the alleged aid had been granted, 2 July
1990, being the date on which Law No 90-568 completely and
definitively established the tax regime in question, and the first
request for information from the defendant on 28 June 2001.

The applicant also relies on the principle of legitimate expecta-
tions, in that the contested decision requires the recovery of aid
from FT, and of its own rights of defence, in that the Commis-
sion made a finding as to the existence of aid without having
given the French authorities the opportunity of commenting on
an essential element of its arguments, namely the mixed char-
acter of the levy paid by FT between 1991 and 1993.