CELEX: 61982CC0323
Language: en
Date: 1984-07-11 00:00:00
Title: Opinion of Mr Advocate General VerLoren van Themaat delivered on 11 July 1984. # SA Intermills v Commission of the European Communities. # Aid for the conversion of a paper-manufacturing undertaking. # Case 323/82.

OPINION OF MR ADVOCATE GENERAL
      VERLOREN VAN THEMAAT
      DELIVERED ON 11 JULY 1984 (
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         )
      
         Mr President,
      
      
         Members of the Court,
      
      1. Introduction
      1.1. The object óf the application
      In Case 323/82, which I am considering today, the Court is required essentially to decide how State holdings in undertakings must be appraised on the basis of Article 92 of the EEC Treaty. The action brought by the applicant, and supported by the interveners, seeks a declaration that Commission Decision 82/670/EEC of 22 July 1982 on aid granted by the Belgian Government to a paper-manufacturing undertaking (Official Journal 1982, L 280, p. 30) is void. In fact, the action challenges solely the second paragraph of Article 1 of that decision, which states that the aid in the form of the acquisition by the Belgian Government of a holding in the undertaking in question is incompatible with the common market under Article 92 of the EEC Treaty, and Article 2 of the decision. Article 2 provides as follows :
      “The Kingdom of Belgium shall inform the Commission within three months of the date of notification of this decision of the measures it has taken to ensure that the aid referred to in the second paragraph of Article 1 does not continue to distort competition in the future.”
      I shall consider further the rest of the decision in my review of the submissions made in support of the application.
      So far as I have been able to discover, the question of the appraisal of State holdings in undertakings under Article 92 has not yet arisen in the cases decided by the Court. Advocate General Sir Gordon Slynn has, however, considered that problem in detail in his opinion delivered on 25 January 1984 in Case 84/82, {Germany v Commission [1984] ECR 1492).
      It is interesting to note that, although this is a very important issue, it has rarely been considered in recent commentaries on Article 92 of the EEC Treaty. (
            2
         )). The Commission has, in fact, since the quite lengthy general observations on the problem in its Second Report on Competition Policy (Report on 1972, pp. 129 to 134), regularly supplied factual information on its policy in its annual reports on competition policy. In that connection, I refer in particular to the Seventh Report (on 1977, pp. 162 to 164), the Eighth Report (on 1978, pp. 156 to 160) and, in relation to the present decision, the Twelfth Report (on 1982, pp. 128 and 129). In the recently published Thirteenth Report (pp. 140 and 141), notice is given of a letter addressed to Member States “in order to clarify the issues involved and ensure the full application of State aid rules in this area”. From those reports it appears that aid in the form of participation in the capital, which may not be temporary, is found in particular in Belgium, France, Italy, the Netherlands and the United Kingdom. In addition, certain guidelines as to the Commissions' policy may be deduced from those reports. It is apparent from the eighth recital in the preamble to the contested decision that the governments of three Member States expressly support the policy adopted by the Commission in this case.
      1.2. Admissibility of the action
      Although there is no doubt that the decision is of direct and individual concern to the applicant, the application none the less raises certain problems of admissibility. The decision in fact concerns aid granted to a paper-manu- facturing undertaking (see the first and third recitals in the preamble). The applicant claims that that is a clear reference to its undertaking. However, the applicant's substantive claims concern chiefly the injection of capital provided by the Walloon Regional Executive for three undertakings which, according tho the applicant, are entirely independent and cannot be regarded as subsidiaries of the applicant. If that statement were correct, the action in relation to the aid granted to the three undertakings concerned would undoubtedly have to be declared inadmissible. As the three undertakings in question have not brought an independent action but have merely supported the applicant's conclusions as interveners, their intervention obviously cannot prevent any such inadmissibility.
      The abovementioned statement by the applicant was effectively contradicted at the hearing, when the Judge-Rapporteur obtained confirmation from the applicant that the Walloon Regional Executive, through a majority holding in the capital, controlled not only the interveners but also the applicant itself. As a result of that capital holding, all the undertakings concerned must therefore be regarded as one group or as one undertaking for purposes of the decision. That is also the view taken by the Commission. I therefore see no compelling objection to recognizing the applicant's right to represent the entire group. Doubt could arise on that point as a result of the applicant's own assertion that it does not control the interveners. However, that assertion is weakened by the statement, on page 60 of the observations of the Walloon Regional Executive submitted by the Commission, that the applicant will determine the industrial and commercial policy of the entire group and will have the right to interverne in any of the subsidiary undertakings. Recognition of the admissibility of the action must therefore logically entail the rejection of any of the applicant's arguments which presuppose the total independence of the manufacturing undertakings in the group. Any substantive submissions which would necessarily result in the inadmissibility of the action could scarcely be upheld. I shall return to that problem in the discussion of the various submissions put forward by the applicant and the interveners.
      1.3. Submissions of the parties
      The seven submissions put forward by the applicant and the seven largely, but not entirely, identical submissions put forward by the interveners can in my view be arranged as follows. As regards the substantive submissions, I have tried to follow as closely as possible the arrangement of Article 92 and that of the decision, which is based thereon.
      In Section 2 of my Opinion I shall consider the first three submissions of the applicant (relating to procedure) and the indentical first two submissions of the interveners. Those submissions, which allege a twofold breach of Article 93 (2) and a breach of Article 6 of the European Convention on Human Rights, are only of a procedural nature.
      In Section 3 I shall examine the first three recitals in the preamble to the decision, which are of a factual nature, and the related arguments of the applicant and interveners (including the interveners' seventh submission, which is not separately mentioned in the Report for the Hearing).
      In Section 4 I shall examine the submissions alleging failure to give a sufficient statement of reasons on which the decision is based, in relation to the various criteria for the application of Article 92 (1) of the EEC Treaty. In Section 4.1 I shall deal with the concept of aids (to which the sixth submission of the applicant and the fourth and fifth submissions of the interveners in particular relate); and in Section 4.2 I shall discuss the criterion of the adverse effect of aid on trade between Member States (fifth submission of the applicant).
      In Section í I shall consider the most important submissions in this case, in which the Commission is accused of giving a defective statement of reasons in relation to the method of application of Article 92 (3) (c) (fourth and seventh submissions of the applicant and sixth submissions of the interveners).
      Finally, I shall set out my conclusion in Section 6.
      
      1.4. Comparison with the pleadings
      My rearrangement of the order in which the submissions were presented by the applicant and interveners may be compared with the original order, which is retained in the Report for the Hearing. The function of the Report for the Hearing and the “facts and issues” part of the judgment as a procedural safeguard is naturally of particular importance where the submissions put forward in support of a claim are dealt with in a different order or in summary form in an opinion or- a judgment. During the oral procedure, the submissions were discussed in yet another order, which made it even more necessary for them to be put in a more logical order.
      2. The three procedural submissions
      2.1. First submission
      In its first submission the applicant, supported by the interveners, accuses the Commission of breach of the essential procedural requirement laid down in Article 93 (2), inasmuch as the Commission did not invite the applicant individually to submit its comments before adopting the contested decision. That submission must be rejected. In this case the Commission followed its usual practice, which has been established for some years, by giving the parties concerned without distinction (except for the Member States) an opportunity of submitting their comments by means of a notice in the Official Journal (Official Journal 1981, c 61, p. 3). The parties concerned include not only the recipients of the aid in question but equally undertakings which may be placed at a competitive disadvantage by such aid, not to mention customers, suppliers, employees and trade associations. In practice, it is not possible for the Commission to give notice individually to all those who may be concerned, nor does the text of Article 93 (2) require that it should do so. Moreover, it would be contrary to the principle that all the parties concerned should be treated equally for the Commission to accord privileged treatment to the undertakings receiving the aid in question, in so far as they were known to it. The Commission is therefore correct in observing that, fotthe abovementioned reasons, only a notice published in the Official Journal provides a satisfactory procedural safeguard for all the parties concerned. The practice is that only the Member States are individually given notice to submit their comments — doubtless in connection with the joint review of existing systems of aid provided for in Article 93 (1).
      2.2. Second submission
      In its second submission the applicant, supported by the interveners, accuses the Commission of a further breach of the same provision and of a general principle of proper administration on the ground that in the aforesaid notice it made a finding that the aid in question was unlawful. It would certainly have been more correct if in the notice the Commission — in accordance with the wording of the second sentence of Article 93 (3) — had merely stated its opinion that the aid was not compatible with the common market. Nevertheless, it clearly appears from the text of the notice and in particular from the express reference contained therein to the first subparagraph of Article 93 (2) that this was in fact only a provisional viewpoint, preceding not only the decision but also the joint review with the Member States, as provided for in Article 93 (1). Moreover, the clear terms of that provisional viewpoint and the brief explanation thereof seem to increase the possibility of an objection on the part of the recipient undertaking, rather than reduce it. Finally, it must not be forgotten that in the same paragraph the notice goes on to refer to the undisputed finding that the aid in question was not notified in due time. For that reason, the granting of the aid in any event constituted a breach of Community law, according to the judgments of this Court (Cases 120 to 122/73 and 141/73, Lorenz and Others v Germany [1973] ECR 1471). By none the less treating the aid which had not been notified in due time in the same way as any other aid, the Commission certainly provided possibilities of challenging its assessment of that measure which it was under no obligation to provide. Consequently the applicant's second submission must, in my opinion, also be rejected, in spite of the minor error in the notice which I have recognized.
      2.3. The third submission
      In its third submission the applicant, supported by the interveners, accuses the Commission of infringing Article 6 of the European Convention on Human Rights (
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         ) by the obligation laid down in Article 2 of the contested decision to take measures “to ensure that the aid referred to in the second paragraph of Article 1 does not continue to distort competition in the future”. The aid in question is the Belgian State's holding in the undertaking concerned. That submission lacks first any factual foundation. The applicant's contention that Article 2 of the decision means that it must pay back the Belgian State's holding of BFR 1500 million clearly finds no support in the text cited. First, that Article imposes an obligation not on the applicant but solely on the Belgian Government; secondly, it is left to ťhe Belgian Government to determine the way in which the aid in question is prevented from distorting competition. As the Commission observed, consideration might be given inter alia to the conversion of the State holding into an interest-bearing loan. The submission also lacks any foundation in law. On the assumption that the Community must also be regarded as bound by that Article of the Convention, the applicant's position is clearly based on the dual presumption that all administration intervention in contracutal or property relationships must be tested against Article 6 of the Convention and that an administrative decision which only permits such intervention — occurring in all Member States — to be challenged on a point of law is incompatible with the aforesaid Article 6. However, I have been unable to find any foundation for those two presumptions either in the text of Article 6 or in the judgments referred to by the applicant in support of its argument. (
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         )
      That submission must therefore also be rejected.
      3. The facts and related submissions
      It appears from the first three recitals in the preamble to the decision that the Commission proceeded on the basis that the aid in question consisted of the following parts :
      
               (a)
            
            
               “A low-interest loan of BFR 1076 million, to finance an investment programme óf BFR 1314 million, and two repayable advances totalling BFR 510000 million”. According to the second recital, that assistance was “linked to restructuring measures, comprising the closure of two factories out of the group's total of five, and the ending of bulk production, with conversion to special papers.”
            
         
               (b)
            
            
               “A holding of BFR 2350 million acquired by the Walloon Regional Executive; the main effect of this measure was to rescue the undertaking from a very difficult financial situation” (third recital).
            
         In the intervener's seventh submission, part (b) of that version of the facts is disputed. It is claimed that the holding in the applicant amounts to only BFR 1500 million. The remaining BFR 850 million in reality consists of the Walloon Regional Executive's holding in the capital of the interveners. From their explanation, the interveners were thus in fact set up by the Walloon Regional Executive. The same idea clearly underlies the third and fourth submissions of the applicant itself, although it did not make a separate submission on that point. (
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         ) In my introductory remarks I have already pointed out that, if it is substantively correct, that submission (together with all the arguments based upon it by the applicant and interveners) would have to be declared inadmissible. At the same time, however, I demonstrated that, in referring to an undertaking, the decision clearly does not refer to the applicant but to the whole group of undertakings controlled through the capital holding acquired by the Walloon Regional Executive. The submission must therefore be rejected.
      At the hearing the applicant and the interveners also challenged the first three recitals in the preamble to the decision on different points.
      In so far as that challenge is based on the misapprehension that, in referring to an undertaking, the decision related solely to the applicant and not to the entire group, I need not, in view of my foregoing remarks, consider it further. However, at the hearing the statement contained in the third recital in the preamble that the main effect of the holding of BFR 2350 million acquired by the Walloon Regional Executive “was to rescue the undertaking from a very difficult financial situation” was also challenged.
      According to the applicant and the interveners, the holding referred to in the third recital cannot legally or for accounting purposes be distinguished in this way from the loans referred to in the first recital. The loans and capital holding have both become part of the capital of the applicant and the interveners. Both were intended without distinction for the entire restructuring operation, and thus for investments, the closure of two factories out of the group's total of five, the conversion from bulk-production paper to special papers and the covering of debts and losses. However, the factual basis which I have thus presented separately of the applicant's fourth, fifth, sixth and seventh submissions, to be considered below, is incompatible with the version of the facts put forward during the proceedings in the observations of the Walloon Regional Executive. That detailed document shows irrefutably that the loans can be regarded exclusively as investments and that the advances are intended solely to provide for the social consequences of the restructuring operation. It is therefore apparent that the debts and losses of the group could be financed exclusively from the capital holdings. After deduction of the investment costs (BFR 400 million) and costs of closure (BFR 510 million) mentioned by the applicant itself at the hearing, the debts and losses claim the greater part of the State holding. To that it should be added that the applicant and interveners admitted at the hearing that the two factories still in production continue to incur losses. Those losses, which are still being incurred since the aid was granted, even though the applicant claims that they are diminishing, can only be financed out of the capital holding. Therefore the Commission rightly stated in the third recital in the preamble to its decision that the main effect of that capital holding was “to rescue the undertaking from a very difficult financial situation”. That applies in particular to the capital holding acquired in the applicant company; even according to the figures produced by the applicant at the hearing, however, it also applies to well over half of the capital holding acquired in the intervening companies.
      I shall now consider separately the legal aspects of the remaining submissions of the applicant.
      4. Applicability of Article 92 (1)
      4.1. The concept of aid
      The first requirement for the application of Article 92 is the existence of “aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods”. The applicant's sixth submission, and the fourth and fifth submissions of the interveners, relate to that basic condition laid down in Article 92 (1).
      In that connection, the applicant's sixth submission and the interveners' fourth submission in particular contest the 26th and 27th recitals in the preamble to the decision, in so far as they state that the capital holding “constitutes rescue aid intended to allow the undertaking to meet its financial commitments” and that that aid, “aimed at keeping production capacity in operation, threatens to do serious damage to the conditions of competition, as the free interplay of market forces would normally call for the closure of the undertaking, allowing more competitive firms to develop”. The interveners contest those findings, in particular in relation to the holdings acquired by the Walloon Regional Executive in their capital. However, I have already established that such a division of the Commission's findings must, for the reasons which I have given, be regarded as wrong and that, even if the interveners were to be considered independent undertakings (quod non), the fact remains that they have not brought any separate action but have only intervened in support of the applicant. Thus any independent claims which they may make in relation to the decision cannot be held admissible. Therefore their fourth submission may only be examined in so far as it supports the applicant's claims, and as such it raises no new aspects.
      More fundamental than the applicant's sixth submission is the fifth submission of the interveners. That submission alleges infringement of Article 222 of the EEC Treaty, on the ground that the decision amounts to a denial of the right of a State or one of its subjects to create new undertakings. That is said to be contrary to Article 222 of the EEC Treaty, which provides: “This Treaty shall in no way prejudice the rules in the Member States governing the system of property ownership.” Although that submission, in raising the question of the permissibility of the capital holding acquired by the Walloon Regional Executive, is formulated in such a way that attention is once again wrongly focused on the holding acquired in the capital of the interveners, the Court of Justice is thereby for the first time expressly invited to adjudicate upon the applicability of Article 92 to State holdings.
      “Aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods” includes aid which artificially reduces the investment costs, the production costs or the marketing costs of the undertakings in question, or aid by which the State in any form whatsoever bears the losses of those undertakings. It is already apparent from my analysis of the fact and the applicant's arguments on that point in Section 3 of this Opinion that the holdings acquired by the Walloon Regional Executive in this case are intended chiefly to cover the losses of the Intermills Group. The applicant's assertion that that is not the case is partly based on its contention, which has already (in Section 3) been found to be untenable, that the loans, advances and holdings form a single entity which is intended for one indivisible restructuring operation. For the rest, it is based on the contention — which has also been found untenable (in Point 1.2, supra) and which jeopardizes the admissibility of the application — that it is in fact not a question of aid to one undertaking but of aid to several independent undertakings (the applicant and the three interveners). Furthermore, I have already determined that the holding in the interveners also served largely to cover losses. The sixth submission should therefore be rejected.
      The important fifth submission of the interveners, which raises the question of the relationship between Articles 92 and 222 of the Treaty, then remains to be discussed. The fact that the Commission in 1963 in its reply, cited by the applicant, to a Parliamentary question did not yet expressly include participation in capital in its list of examples of possible forms of aid naturally cannot preclude the possibility of its coming to the conclusion on the basis of subsequent experience that, under certain circumstances, State participation in an undertaking may constitute aid within the meaning of Article 92 (1). In his Opinion of 25 January 1984 in Case 84/82 (cited above) Advocate General Sir Gordon Slynn concludes that even a capital injection which is in principle temporary in viable undertakings with the possibility that a dividend may be paid constitutes aid, if it is on a scale not normally available in the capital market. This, however, is not a borderline case of that kind.
      The present case clearly relates to an injection of capital into an undertaking in difficulties, which has also already been regarded by the Commission as aid, within the meaning of Article 92, in connection with Case 84/82. Furthermore, as has already been demonstrated, the present capital participation in the undertakings in the Intermills group is mainly intended to cover losses. It seems to me beyond doubt that such a very extensive covering of losses, which artificially keeps an undertaking going, must also be regarded as aid within the meaning of Article 92, especially as it must be inferred from the the permanent nature of the injection of capital and from the fact that the factories still in production are still not profitable even four years after the aid was granted that capital could not have been obtained in the private capital market. That also follows from the rescue plan submitted by the Walloon Regional Executive. It was even less possible in relation to the injection of capital of BFR 1500 million provided for the applicant itself, since the applicant emphatically argued at the hearing that it no longer carries on any industrial activity. A form of losscovering of this kind, by which a group of undertakings (mutually connected, as noted above) is artificially kept alive, certainly also distorts competition with other undertakings in the industry concerned. As appears from the ninth recital in the preamble to the decision, two trade associations and one competitor took the view that this was the case, in particular since the industry in question suffered from overcapacity.
      Article 222 cannot alter those conclusions. The Court has repeatedly stated in its judgments on industrial and commercial property rights in the context of Article 36 of the Treaty that the respect for the existence of such property rights does not entail acceptance of every use of those rights. A different interpretation of Article 222 would necessarily lead to the absurd conclusion that no agreement or other legal transaction in relation to the transfer or use of property, movable or immovable, tangible or intangible (in this case the issue of share capital), can be affected by Community law as laid down in the Treaty or in secondary legislation. From Article 85 of the Treaty alone, it clearly follows that such a view is untenable. In relation to this particular case, it seems to me clear that Article 222 does not prevent the prohibition of the use of new share capital to cover extensive debts and operating losses. Therefore the interveners' fifth submission will also, in so far as it is admissible, have to be rejected.
      4.2. The criterion of the effect on trade
      The applicant's fifth submission alleges that the Commission has given an inadequate statement of reasons and made an inaccurate assessment of the facts in relation to. its view that the aid in question is likely to affect trade between Member States. Referring to the judgment of this Court in Case 730/79 (Philip Morris Holland BVy Commission, [1980] ECR 2671), the applicant states in its application that such an effect can occur only “when State financial aid strengthens the position of an undertaking compared with other undertakings competing in intra-Community trade” (first sentence of paragraph 11), that is to say, “help[s] to enlarge its production capacity and consequently to increase its capacity to maintain the flow of trade including that between Member States” (third sentence of paragraph 11). In response to that assertion, it must be stated at once that it wrongly suggests that the third sentence of the paragraph in question contains a restrictive definition of the first sentence, which is more widely drafted. In fact, the third sentence merely applies the test laid down in the first sentence to the particular case of Philip Morris.
      The question whether the Court in fact intended in the first sentence of the paragraph cited to give an exhaustive definition of the test to be used in the application of Article 92 (1) need not be considered here. If the test laid down in the first sentence is applied to the aid at issue in this case, it will in fact be clear that the aid also falls within the definition. By enabling debts to be paid and operating losses to be covered through an injection of capital, the Walloon Regional Executive certainly strengthened the position in intra-Community trade of the Intermills Group, which, as has already been explained, was correctly referred to in the decision as one undertaking.
      The Commission itself rightly stated in its defence that without that aid, to which is then added the massive investment aid in the form of cheap loans, the undertaking in question would undoubtedly have had to cease trading. In addition the injection of capital enabled parts of the undertaking (the factories operated by the interveners) to produce at unprofitable prices.
      In the light of the Court's judgment in Philip Morris and on the basis of a comparison with the decision in that case, the eighth, ninth and tenth recitals in the preamble to the decision may, having regard to the group's position in international trade, which was of course known to the addressee of the decision and to the applicant, be regarded as an adequate statement of the grounds for treating as satisfied the requirement that trade between Member States should be affected. The effect of the decision as an example to undertakings in different industries and the possibility of its being noted by other interested outsiders would naturally have been greater if the decision had also expressly recorded the facts known to those directly concerned.
      5. The application of Article 92 (3) (c)
      The 14th to 29th recitals in the preamble to the decision are devoted to the finding that the conditions laid down by Article 92 (3) for considering aid falling within Article 92 (1) to be compatible with the common market are not fulfilled. In that connection, Article 92 (3) (c) is of particular importance. It enables the following to be considered compatible with the common market: “aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest”.
      The fourth and seventh submissions of the applicant and the corresponding third and sixth submissions of the interveners allege, in relation to the refusal to make use of that possibility, that the grounds on which it is based are contradictory and therefore inadequate and that there is an infringement of Article 92 (3) (c). The statement of grounds is alleged to be contradictory inasmuch as the decision states, on the one hand, that “the aid granted in the form of low-interest loans and repayable advances is linked to the restructuring” and “is not liable adversely to affect trading conditions to an extent contrary to the common interest” (here I will note that those quotations are extracts from the 22nd and 24th recitals in the preamble to the decision and must be considered in the light of the full text of the recitals). On the other hand, the aid granted by means of a holding acquired in the capital of the recipient undertaking is not regarded as being directly linked to the restructuring operation (in that regard I refer to the 26th and 27th recitals in the preamble to the decision, which by way of further explanation of that finding state that: “it constitutes rescue aid intended to allow the undertaking to meet its financial commitments” and “aid of this kind aimed at keeping production capacity in operation, threatens to do serious damage to the conditions of competition, as the free interplay of market forces would normally call for the closure of the undertaking, allowing more competitive firms to develop”).
      According to the applicant and interveners, the object and effect of the aid, in the form of loans and advances, rightly considered by the Commission to be permissible, are exactly the same as the object and effect of the aid which it regards as unlawful. It is a question of a compound and indivisible operation, consisting of the closure of unprofitable production units, the setting up of three new undertakings to take over the profitable production units of the applicant, the conversion for the applicant undertaking into a “société immobilière” and the payment by the applicant — out of the repayable advances and the capital holding — of the losses arising from the poor performance of the production unit in St Gervais and of the costs of closing that factory.
      The applicant's seventh submission alleges infringement of Article 92 (3) (c), in so far as the Commission refuses to apply that provision on the basis that the Community interest is served by reducing the output of bulk-production paper and directing production towards special papers. According to the applicant, that refusal is incompatible, on the one hand, with the fact that Article 92 (3) (c) authorizes “aid to facilitate the development of certain economic activities ..., where such aid does not adversely affect trading conditions to an extent contrary to the common interest”, and, on the other hand, with the fact that the object of the aid held to be unlawful is precisely to reduce the production of bulk-production paper and to facilitate the development of -the production of special papers.
      Those submissions can best be considered jointly. As the view expressed in the seventh submission that Article 92 (3) (c) contains a statutory authorization of certain aid is clearly incompatible with the opening words of Article 92 (3), that submission is only important as a supplement to the fourth submission of the applicant. In its reply the applicant further observed, by way of clarification of that submission, that, contrary to the Commission's view, the capital holding concerned not one undertaking but several undertakings, that is to say the applicant and the interveners. According to the applicant, however, the only question which must be answered by the Court is whether the holding acquired in the capital of the applicant is linked with the restructuring operation on the same footing as the other aid. On the one hand, the formation of the interveners constitutes one of the essential elements of the restructuring plan and the financing thereof must form part of it. On the other hand, it is impossible to distinguish the use of the funds received as a result of the holding in the applicant's capital from the use of the loans made to it to cover losses. If those losses had not been covered, the restructuring plan would have been seriously jeopardized.
      As the Commission has rightly observed in another connection, namely in connection with the interveners' fifth submission (see the Report for the Hearing), the applicant's argument also contains an intrinsic contradiction, inasmuch as it refers, on the one hand, to the formation of new, independent undertakings with a capital holding acquired by the Walloon Regional Executive and, on the other hand, to a single restructuring operation supported by all the aid measures in issue. I have already, in section 1.2 of my opinion, dealt with the questions raised by the intrinsic contradiction in relation to the admissibility of the application. As I then demonstrated, the application can only be regarded as admissible if the arguments derived from the independence of the applicant on the one hand and the interveners on the other are disregarded. As I have further demonstrated in Section 3 of my Opinion, to regard the loans, advances and capital holdings as one indivisible aid measure is inconsistent with the clear facts which appear from the documents put before the Court. It is clear that the holdings acquired both in the capital of the applicant and in the capital of the interveners were largely intended, and used, to cover losses. Therefore a substantial part of the argument which stands or falls with the obviously untenable claim that it is impossible to distinguish between the loans, advances and capital holdings and that they all have the same purpose must also be rejected.
      The question which then remains is whether the covering of losses by the substantial holding acquired in the capital must nevertheless be regarded as an indispensable precondition of the restructuring of the undertakings as a whole. Once the applicant's case for an affirmative answer to that question has been stripped of those arguments found to be untenable, there is virtually nothing left. Consequently, the question must in my view be answered in the negative. Indeed, what really matters, as can also be seen from Article 2 of the decision and from the Commission's related explanations, is, as I have stressed, the form of the aid granted for the purpose of covering losses. If, for example, losses had been covered by means of loans at normal commercial rates of interest, or if the payment of dividends after a certain period of time had been stipulated, or if the capital holdings had been temporary (in that regard see also page 132 of the Second Report on Competition Policy), the Commission, as appears from the aforesaid article of the decision and from the related explanations, would have reached a different decision in relation to those holdings. By now altering the capital holdings in one of those ways, it will also be possible to put an end to the established incompatibility with the common market. Finally, I regard it as not entirely without significance in this connection that the Belgian state itself, as the party to whom the decision was adressed has not brought an action against the decision or intervened in favour of the applicant. The fourth submission of the applicant supported by the interveners, must therefore in my view also be rejected.
      The applicant's seventh submission must be rejected, because in the context of the discretion conferred upon it by Article 92 (3) the Commission was entitled to take the view, for which it has also set out its reasons in the 26th to 29th recitals in the preamble to its decision, that this form of aid, partly as a result of the lack of any compensatory factor in the Community interest, (
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         ) adversely affected trading conditions to an extent contrary to the common interest. On that point, the Commission rightly stated in its defence that a direct connection is required between, on the one hand, the scale and intensity of the aid and, on the other hand, the compensatory factor referred to above. It is striking that the seventh submission makes no attempt to prove that those negative conditions for the application of Article 92 (3) were fulfilled and that the Commission could not reasonably take the view that those conditions were not fulfilled.
      6. Conclusion
      I conclude that all the applicant's submissions and the interveners' submissions supporting its claim, and consequently the application itself, should be rejected and the applicant should be ordered to pay the costs in accordance with the Rules of Procedure. In this Opinion I have also considered the applicant's alternative claim, set out in its Reply, that the Court should in any case formally record that the Commission will not require the applicant or the interveners to repay the aid granted in the form of a holding in the capital. However, I do not see how the Court can take cognizance of that alternative claim.
      By way of an epilogue, I will complete this Opinion with the following brief remarks on the place of the present decision in the competition policy of the Commission as a whole. In comparison with the policy which, according to its reports on competition policy, the Commission originally pursued on crisis aid after the first oil crisis in 1973, the present decision does perhaps adopt a relatively hard line. (
            7
         )
      The Commission is less ready now than in the years from 1975 to 1978 to accept “rescue operations” such as that concerned here. An explanation of this harder line — which, as appears from the eighth recital in the preamble to the decision, was expressly supported by three Member States — is provided in the 18th recital in the preamble. It is apparent, both from that and from the 19th and 20th recitals, that the Commission regards the crisis in the paper industry as structural rather than conjunctural. For similar reasons the Commission is known to be pursuing a relatively severe policy in relation to aids in the steel industry. More generally, the hardening of the Commission's policy on aids is strikingly illustrated by the table set out on page 143 of the Thirteenth Report on Competition Policy. From that it appears that the number of procedures opened has been rising sharply since 1978 and in 1982 reached a peak of 129. Finally, it appears from paragraphs 222 to 227 of the same report that the Commission regards the present case and Case 318/82 (Leeuwarder Papierfabriek) in particular as “test cases” for its policy with regard to State participation in the capital of undertakings, a form of aid which has increased rapidly in recent years.
      (
            1
         )	Translated from the Dutch.
      (
            2
         )	The fourth edition of Droit Commercial Europeen by Goldman and Lyon-Caen (Paris, 1983, pp. 1057 and 1058) and the long commentaries on the EEC Treaty by Smit & Herzog (part 3, p. 392) and by von der Groeben-Boeckh-Thiesing-Ehlermann (third edition, p. 1590) examine the problem only very briefly. The recent third edition of Disciplina della concorrenza nella CEE, by Frignani and Waelbroeck, does not deal with the question at all. J. A. Winter, in Nationale steunmaatregelen en het gemeenschapsrecht is the only author to consider the question somewhat more fully (in paragraphs 76, 77, 89, 181 et seq., 208, 397, 413 and 485 of his important work) but does so particularly in connection with Article 90 of the Treaty, which is not relevant in this case.
      (
            3
         )	Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950, as amended by virtue of the Third and Fifth Protocols, which entered into force on 21 September 1970 and 20 December 1971 respectiveley.
      (
            4
         )	In that connection I also refer to the detailed report prepared by P. van Dijk in 1983 for the Netherlands Lawyers Association, especially pp. 71 to 80, which refers to further writings and to the judgments of the Court of Human Rights. As appears from his analysis, the Court of Human Rights considers that the decisive question is whether a procedure leads to “determination of a civil right or a civil obligation of one or both of the parties”. In the assessment of measures adopted by public authorities a partial review by an administrative court is regarded as sufficient to meet the requirements of Article 6 (op. cit., pp. 79 and 80).
      (
            5
         )	The third submission expressly refers to the repayment by the applicant of the Walloon Regional Executive's holding of BFR 1500 million in its capital. In the fourth submission the challenging of the facts stated in the decision is connected with the rest of the argument.
      (
            6
         )	As regards that concept, see the Commission's pleadings and the summary of them in the Report for the Hearing, together with the 14th to 16th recitals in the preamble to the decision itself and the Tenth Report on Competition Policy, paragraph 213 (pp. 147 and 148).
      (
            7
         )	For a good summary of the Commission's policy on crisis aid in those years, I refer to J. A. Winter, “National aids and Community law”, pp. 372-378.