2007/674/EC: Commission Decision of 4 April 2007 on State aid N 575/04 implemented by France for Ernault and measure C 32/05 (ex N 250/05), the subject of proceedings under Article 88(2) of the EC Treaty (notified under document number C(2007) 1405) (Text with EEA relevance)
Date: 2007-04-04
Institutions: European Commission
Subjects: France, State aid, aid to undertakings, control of State aid, industrial restructuring, machine-tool industry

20.10.2007

EN

Official Journal of the European Union

L 277/25

COMMISSION

COMMISSION DECISION

of 4 April 2007

on State aid N 575/04 implemented by France for Ernault and measure C 32/05 (ex N 250/05), the
subject of proceedings under Article 88(2) of the EC Treaty

(notified under document number C(2007) 1405)

(Only the French text is authentic)

(Text with EEA relevance)

(2007/674/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

under number N 250/05. By letter of 2 June 2005, the
Commission asked additional questions about the notifi-
cation which France answered by letter of 12 July.

establishing the European
Having regard to the Treaty
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 (1)
pursuant to the provisions cited above and having regard to
their comments,

Whereas:

1. PROCEDURE

(1)

By decision of 20 January 2005 (2),
the Commission
authorised France to grant rescue aid to Ernault. The
aid took the form of a loan of EUR 2 million at an
interest rate of 4,43 % for a maximum period of six
months from the first payment of amounts loaned to
the undertaking. According to information provided by
the French authorities,
this aid was implemented on
14 February 2005.

(2)

By letter of 19 May 2005, registered as received by the
Commission on 23 May, France notified the European
Commission that it intended to grant EUR 2 million in
restructuring aid to Ernault. The case was registered

(1) OJ C 324, 21.12.2005, p. 23.
(2) OJ C 16, 21.1.2006, p. 21. Case N 575/04 — Rescue aid for

Ernault.

(3)

(4)

(5)

(6)

the Commission
By letter of 6 September 2005,
it had decided to initiate the
informed France that
procedure laid down in Article 88(2) of the Treaty in
respect of the measure referred to in paragraph 2. The
decision was published in the Official
the
European Union (3). The Commission invited interested
parties to submit their comments.

Journal of

registered as

The Commission received comments from the French
authorities,
received on 16 November
2005, 16 May 2006, 29 June 2006, 24 July 2006 and
21 September 2006. Meetings were held between the
French authorities and Commission staff on 3 July and
26 October 2006.

By letter of 13 December 2006, registered as received by
the Commission on 14 December, the French authorities
informed the Commission that Ernault was in recei-
vership and that they were withdrawing the notification
of restructuring aid.

By letter of 2 March 2007, registered as received by the
French authorities
Commission on 5 March,
informed the Commission that on 13 September 2006
they had registered their claim for the rescue aid with the
official receiver in charge of the Ernault case.

the

(3) See footnote 1.

L 277/26

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Official Journal of the European Union

20.10.2007

2. RESCUE AID

receiver in charge of the receivership of Ernault.

(7)

(8)

(9)

aid for

In its decision of 20 January 2005, the Commission
expressed the view that the loan of EUR 2 million was
compatible with the common market as rescue aid
within the meaning of the Community guidelines on
State
in
difficulty (4) (the Guidelines). This assessment was based
on compliance with certain conditions, in particular the
to the
French authorities' undertaking
Commission, within six months of
the Commission's
authorisation of the aid, a liquidation plan, a restruc-
turing plan or proof that the loan had been repaid in full.

rescuing and restructuring firms

to submit

3. RESTRUCTURING AID

(13)

The Commission notes that, under Article 8 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 (5),
the Member State concerned may
withdraw its notification in due
the
Commission has taken a decision on the aid. In cases
where the Commission has already initiated the formal
investigation procedure, it must close that procedure.

time before

The French authorities did notify a restructuring plan to
the Commission on 19 May 2005, which was within six
months of
they
later withdrew the notification.

the Commission's decision. However,

(14)

Therefore, the formal investigation procedure opened by
the above-mentioned Decision of 6 September 2005
must be closed since, as
the notification has been
withdrawn,
it no longer serves any purpose in respect
of the restructuring aid for Ernault,

Under paragraph 26 of the Guidelines, notification of a
restructuring plan to the Commission is a precondition
for extending the deadline for repayment. Therefore,
when a notification is withdrawn, the extension of the
deadline cannot be maintained beyond the date of with-
drawal, and the loan becomes repayable immediately.

HAS ADOPTED THIS DECISION:

(10)

The Commission also notes that the French authorities
have not provided it with proof of repayment of the loan
or informed it about a liquidation plan for Ernault.
Therefore none of
the conditions for extending the
deadline set out in paragraph 26 of the Guidelines is met.

(11)

therefore find that

the loan
The Commission must
granted to Ernault by the French authorities as rescue
aid is incompatible with the common market under the
Guidelines and has been so since 14 December 2006, the
date on which notification of the restructuring plan was
withdrawn. It also finds that there is no other legal basis
for deeming the aid to be compatible with the common
market. The loan granted as rescue aid must therefore be
considered to be incompatible state aid as it has been
maintained beyond 14 December and must, therefore, be
recovered by France from the beneficiary, Ernault.

(12)

The Commission notes that the French authorities have
registered the claim for the rescue aid with the official

(4) OJ C 244, 1.10.2004, p. 2.

Article 1

The state aid which was implemented by France for Ernault as
rescue aid and was the subject of the Commission decision of
20 January 2005 is incompatible with the common market
since it has been maintained beyond 14 December 2006.

Article 2

1.
France shall take all necessary measures to recover from
the beneficiary the aid referred to in Article 1 and unlawfully
made available to the beneficiary.

Recovery

shall be

effected without delay

2.
and in
accordance with the procedures of national law provided that
they allow the immediate and effective execution of
the
decision. The aid to be recovered shall
include interest from
the date on which it was at the disposal of the beneficiary
the period from
recovery.
the date of
until
14 December 2006,
the
restructuring plan was withdrawn, and the date of recovery of
the aid,
interest shall be calculated in accordance with the
provisions of Chapter V of Commission Regulation (EC) No
794/2004 (6).

For
its
the date on which notification of

(5) OJ L 83, 27.3.1999, p. 1. Regulation as

(EC) No 1791/2006 (OJ

last amended by
L 363,

Commission Regulation
20.12.2006, p. 1).

(6) OJ L 140, 30.4.2004, p. 1.

20.10.2007

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L 277/27

Article 3

Article 5

The procedure provided for in Article 88(2) of the Treaty and
opened by the Commission decision of 6 September 2006
(measure C 32/05) is closed as a consequence of the withdrawal
of the notification of 23 May 2005.

This Decision is addressed to the French Republic.

Article 4

Done in Brussels, 4 April 2007.

this Decision, of

inform the Commission, within two months of
France shall
notification of
the measures which it has
already taken and plans to take to comply with Articles 1
and 2. It shall supply this information by completing the ques-
tionnaire set out in the Annex hereto.

For the Commission

Neelie KROES
Member of the Commission

L 277/28

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Official Journal of the European Union

20.10.2007

ANNEX

Information regarding the implementation of the Commission Decision of 4 April 2007 on State aid 575/04
implemented by France for Ernault, and measure No C 32/05 (ex N 250/05), the subject of proceedings under
Article 88(2) of the Treaty

1.

Calculation of the amount to be recovered

1.1. Please provide the following details regarding the amount of unlawful State aid that has been put at the disposal of

the recipient:

Date(s) of payment (°)

Amount of aid (*)

Currency

Identity of recipient

(°) Date or dates on which the aid or individual instalments of aid were put at the disposal of the recipient; if the measure consists of

several instalments and reimbursements, use separate rows.

(*) Amount of aid put at the disposal of the recipient, in gross grant equivalent.

Comments:

1.2. Please explain in detail how the interest payable on the amount to be recovered will be calculated.

2.

Recovery measures planned or already taken

2.1. Please describe in detail what measures have been taken and what measures are planned to bring about the
immediate and effective recovery of the aid. Where relevant, please indicate the legal basis for the measures
taken or planned.

2.2. By what date will the recovery of the aid be completed?

3.

Recovery already effected

3.1. Please provide the following details of aid that has been recovered from the recipient:

Date(s) (°)

Amount of aid repaid

Currency

Identity of recipient

(°) Date or dates on which the aid was repaid.

3.2. Please attach supporting documents for the repayments shown in the table at point 3.1.