Case T-268/08: Action brought on 11 July 2008 — Land Burgenland v Commission
Date: 2008-07-11
Institutions: Court of First Instance
Subjects: Austria, Burgenland, European Commission, State aid, action for annulment (EU), aid for restructuring, bank, control of State aid, mortgage bank

C 247/14

EN

Official Journal of the European Union

27.9.2008

Pleas in law and main arguments

Form of order sought

seeks

applicant

the
of
annulment
the Commission of

The
the
decision
the European
C(2008) 1089 final of
Communities of 2 April 2008 by which the Commission
declared incompatible with the common market the State aid
granted by the applicant and the Communauté d'agglomération
du Douaisis in favour of Arbel Fauvet Rail SA in the form of
advances repayable at an annual rate of interest of 4,08 % corre-
sponding to the Community reference rate applicable when the
loan was granted. The Commission considered that, taking into
account its financial standing, Arbel Fauvet Rail SA would not
have been able to obtain funds on such favourable terms in the
financial market.

in part,

The applicant claims first that the Commission committed a
manifest error of assessment and disregarded its obligation to
state reasons, inasmuch as it considered that the source of the
funds was,
the Communauté d'agglomération du
Douaisis and did not take account of the specific legal features
of the Communauté d'agglomération which is a public institu-
tion of intercommunity cooperation endowed with administra-
tive and budgetary autonomy in relation to the towns and
communities which are members of it. The applicant considers
that the aid granted is consequently not attributable to the State.

The applicant further claims that the Commission committed
errors of assessment (i) by describing Arbel Fauvet Rail SA as a
firm in difficulty and (ii) by considering that Arbel Fauvet Rail
SA could not have obtained the operative rate of interest in
normal market conditions.

The applicant claims in addition that the Commission did not
conduct its examination of the case with the required diligence,
inasmuch as it did not specify either the amount of the aid to
be recovered, nor the value of the aid and it did not provide any
evidence capable of justifying an increased interest rate to be
applied to the repayable advances because of a situation of par-
ticular risk in relation to Arbel Fauvet Rail SA.

Lastly, the applicant relies on an infringement of the principle
that both parties should have the right to be heard, since the
applicant's views were not heard during the administrative
procedure.

Action brought on 11 July 2008 — Land Burgenland v
Commission

(Case T-268/08)

(2008/C 247/27)

Language of the case: German

Parties

— Pursuant to Article 231(1) EC, annul Commission Decision
C(2008) 1625 final of 30 April 2008 (No C 56/2006, ex
NN 77/2006 — Privatisation of the Bank Burgenland) in its
entirety;

— Pursuant to Article 87(1) of the Rules of Procedure of the
Court, order the Commission to pay the applicant's costs.

Pleas in law and main arguments

The applicant contests Commission Decision C(2008) 1625
final of 30 April 2008 in which the Commission decided that
the State aid which Austria granted in contravention of Article
88(3) EC to the Versicherungsgesellschaft Grazer Wechselseitige
Versicherung AG and the GW Beteiligungserwerbs- und -verwal-
tungs-GmbH in the context of the privatisation of the HYPO
Bank Burgenland AG is incompatible with the common market.

The applicant makes the following pleas in law in support of its
action:

— erroneous application of Article 87(1) EC by the Commis-
sion when it fixed the market price, as a tender procedure is
not mandatory;

— erroneous application of Article 87(1) EC by the Commis-
sion as a result of the infringement of existing Commission
practice;

— erroneous application of Article 87(1) EC by the Commis-
sion since a private seller would also have had to predict
that the Austrian Financial Market Authority would reject
the bidder which made the highest bid;

— erroneous application of Article 87(1) EC by the Commis-
sion since the applicant should have been allowed to take
into account the legal guarantee (‘Ausfallhaftung’) for certain
liabilities of the privatised bank in its decision to award aid;

— erroneous application of the private vendor principle by the
Commission when assessing the influence of the legal guar-
antee on the decision to sell;

— erroneous application of Article 87(1) EC by the Commis-
sion as a result of mistaken application of the burden of
proof or of the obligation to submit evidence in a tender
procedure;

Applicant: Land Burgenland (represented by: U. Soltész and C.
Herbst, lawyers)

Defendant: Commission of the European Communities

— erroneous application of Article 87(1) EC by the Commis-
sion since the tender by the bidder with the highest offer
cannot operate as the basis for the determination of the
market price;

27.9.2008

EN

Official Journal of the European Union

C 247/15

— incorrect assessment of the economic value of the share

issues of the privatised bank by the Commission; and

— erroneous application of Article 87(1) EC by the Commis-
the determination of a State aid

sion in the context of
component.

Action brought on 8 July 2008 — Germany v Commission

(Case T-270/08)

(2008/C 247/28)

Language of the case: German

Parties

Applicant: Federal Republic of Germany (represented by: M.
Lumma, assisted by C. von Donat, lawyer)

Defendant: Commission of the European Communities

Form of order sought

— Annul Commission Decision C(2008) 1615 final of 29 April
the European
2008 reducing the
to
Regional Development Fund (ERDF) granted pursuant
Commission Decision C(94) 1973 of 5 August 1994 for
the Operational Programme Berlin (East) Objective 1
(1994-1999) in the Federal Republic of Germany;

contribution under

— Order the Commission to bear the costs.

Article 274 EC. According to the applicant it is also not possible
to find a corresponding administrative practice which has
existed over many years and is generally accepted.

that

The applicant claims moreover
the contested decision
infringes Article 24(2) of Regulation No 4253/88 as no irregu-
larities in the sense of that provision have occurred. It also
claims in that context that even if the conditions for a reduction
in accordance with Article 24(2) of Regulation No 4253/88 are
met, the Commission should have used the discretion available
to it and weighed up whether the reduction was proportionate.

In the alternative, the applicant argues that the flat-rate correc-
tions are disproportionate and that the Commission carried out
the extrapolation on an inadequate factual basis.

Furthermore, the applicant claims that the defendant infringed
its obligation to provide sufficient reasons for the contested
decision.

Finally, the applicant asserts that the Commission infringed the
principle of partnership since, notwithstanding numerous
checks by its
financial controllers during the 1994-1999
Programming Period, at no point were financial consequences
contemplated on account of systemic weaknesses.

(1) Council Regulation (EC) No 1260/1999 of 21 June 1999 laying
down general provisions on the Structural Funds (OJ 1999 L 161,
p. 1).

(2) Council Regulation (EEC) No 4253/88 of 19 December 1988, laying
down provisions for implementing Regulation (EEC) No 2052/88 as
regards coordination of the activities of the different Structural Funds
between themselves and with the operations of the European Invest-
ment Bank and the other existing financial instruments (OJ 1988
L 374, p. 1).

Pleas in law and main arguments

Action brought on 17 July 2008 — Communauté
d'agglomération du Douaisis v Commission

By the contested decision the Commission reduced the financial
contribution from the ERDF for the Operational Programme for
the Objective 1 region of the Land of Berlin in the Federal
Republic of Germany (1994-1999).

In the reasoning for its action the applicant claims first that the
Commission erroneously evaluated the factual situation. The
applicant alleges in particular that the Commission misjudged
the results of particular verifications and unjustifiably found
systematic errors in management and control arrangements.

Parties

(Case T-279/08)

(2008/C 247/29)

Language of the case: French

Second, the applicant argues that there is no legal basis for the
application of flat-rate or extrapolated financial corrections to
in the Programming Period
the Operational Programme
1994-1999 as there were no rules available in respect of that
period similar to those laid down in Article 39 of Regulation
(EC) No 1260/99 (1). Furthermore, nor can a sufficiently precise
legal basis be found in the provisions of Article 24 of Regu-
lation (EEC) No 4253/88 (2),
the
Commission of 15 October 1997 on net financial corrections
within the framework of Article 24 of Regulation No 4253/88
or the principles of sound financial management provided for in

the internal guidelines of

Applicant: Communauté d'agglomération du Douaisis (repre-
sented by: M.-Y Benjamin, lawyer)

Defendant: Commission of the European Communities.

Form of order sought

— Annul the decision No C 38/2007 of the Commission of

2 April 2008.