CELEX: C1997/357/26
Language: en
Date: 1997-11-22 00:00:00
Title: Action brought on 23 September 1997 by the Portuguese Republic against the Commission of the European Communities (Case C-330/97)

C 357/ 14               EN                     Official Journal of the European Communities                                   22 . 11 . 97
     'Taxofit Vitamin C + Ca effervescent pills' and                      the European Communities on 23 September 1997 by the
     'Taxofit Vitamin C chewable pills' are to be assigned                Portuguese Republic, represented by Joao Mota de
     to heading 3004 ('medicaments . . . consisting of                    Campos, Dr Luis Fernandes and Dr Maria Luisa Duarte,
     mixed or unmixed products for therapeutic or                         acting as Agents, with an adress for service in
      prophylactic uses, put up in . . . forms or packings for            Luxembourg at the Portuguese Embassy 33 Allee Scheffer.
      retail sale'), when they contain 1 000 mg and 500 mg
      of Vitamin C ( ascorbic acid ) per pill respectively, are
      imported in packings for retail sale, are to be used —
      according to the information on use which is                        The applicant claims that the Court should:
      contained in the leaflets enclosed with the packs and
      indicates a specific dose — inter alia 'to build up
      resistance: for colds and influenza infections, . . . and           — annul Commission Decision C(97) 2130 Final of 9 July
      allergic processes' and ' as a prophylactic at times of                 1997 on the measures taken by Portugal for the
      increased risk of infection' respectively, and are                      benefit of EPAC — Empresa Para a Agroalimenta^ao e
      authorized as medicinal products in the Federal                         Cereais SA,
      Republic of Germany ?
                                                                          — order the Commission to pay the costs.
Reference for a preliminary ruling from the Bundesverwal­                 Pleas in law and main arguments adduced in support:
tungsgericht by order of that court of 15 July 1997 in the
                 case of Sezgin Ergat v. Stadt Ulm
                          ( Case C-329/97 )
                                                                          — Infringement of Article 190 of the EC Treaty
                             ( 97/C 357/25 )                                   ( contradictory and inadequate statement of reasons for
                                                                              the decision ).
Reference has been made to the Court of Justice of the
European Communities by an order of the Bundesverwal­
tungsgericht ( Federal Administrative Court ) of 15 July                  — Infringement of Article 92 ( 1 ) of the EC Treaty: the
1997, which was received at the Court Registry on                             guarantee granted by the Portuguese Government for
22 September 1997, for a preliminary ruling in the case of                     financing by the banks of Esc 30 billion intended to
Sezgin Ergat v. Stadt Ulm on the following question:                          convert EPAC's short-term debts into medium-term
                                                                               liabilities does not constitute State aid to EPAC . The
                                                                              granting of a guarantee to what is no more than an
Does a Turkish national who has entered the country as a
                                                                               operation for the restructuring of the debts of a public
member of the family of a Turkish worker duly registered
                                                                               undertaking does not involve any transfer of resources
as belonging to the labour force, without requiring a                          from the State to that undertaking. The rate of interest
residence permit in accordance with the national law on                        on the loans negotiated between EPAC and the
foreigners in force at the date of entry, and has
                                                                               international consortium of banks reflects only the
subsequently been in possession of residence permits with                      desire on the part of the credit institutions involved to
interruptions, but who has applied for extension of his last                   make viable a financing operation whose objective was
residence permit 26 days after its expiry, satisfy the
                                                                               the restructuring of debts which had previously been
conditions in the first paragraph of Article 7 of Decision
                                                                               short-term, posing a threat to EPAC's solvency and
No 1/80 of the EEC-Turkey Association Council that he
                                                                               thus to the repayment of those banks ' credits, into
has been ' legally resident' there 'for at least three years'                  long-term liabilities.
( first indent) or 'for at least five years' ( second indent ), if
the     national    authorities     have  refused   to   extend  the
residence permit ?
                                                                               EPAC is an exclusively public capital undertaking. It is
                                                                               for the State, as the owner of the whole of the capital,
                                                                               therefore, to ensure it can continue to attain the
                                                                               general interest objectives it was created to achieve, in
                                                                               particular, the purpose of guaranteeing the purchase of
Action brought on 23 September 1997 by the Portuguese                          cereals from Portuguese farmers and the country's
       Republic against the Commission of the European                         supply of an essential basic good. The Portuguese
                               Communities                                      State, both in its capacity as sole shareholder and as
                                                                               administrator of the public interest, has both the right
                           ( Case C-330/97 )                                    and the exclusive obligation to support EPAC. By
                              ( 97/C 357/26 )                                   offering concrete support by granting the guarantee,
                                                                                the State did not place EPAC at an economic or
                                                                                financial advantage which it might not have obtained
 An action against the Commission of the European                               under the basic rule of the private investor operating
 Communities was brought before the Court of Justice of                         in a market economy.
 ---pagebreak--- 22 . 11 . 97            ENl                 Official Journal of the European Communities                                  C 357/ 15
     The State did not grant EPAC any aid. It merely                       how retaining the aid until a judicial decision is given
     corrected in very moderate terms and in some small                    could result in damage to competitors which could not
     measure the consequences of its earlier behaviour                     be made good, in the event that they were proven to
     which had seriously harmed the undertaking. When                      exist, by means of an action for compensation brought
     the Portuguese Government set up SILOPOR it did                       against the Portuguese State, in the event that it was
     not provide it with the sufficient capital for it to pay              found that it acted contrary to the Community system
     to EPAC the value of the assets transferred from one                  of State aid .
     to the other. It would have sufficed for SILOPOR to
     have paid its debt to EPAC for the latter not to have
     needed at all the State's guarantee and to re-establish
     totally its financial equilibrium .                               — It is not possible in law for the Portuguese State to
                                                                           adopt the measure imposed by the Commission by
                                                                           way of the contested decision .
— Infringement of Articles 222 and 90 of the EC Treaty
     ( arbitrary discrimination between public and private             — Breach of the principle of legitimate expectations: the
     undertakings ): even supposing that the guarantee did                 reasons underlying the grant by the Portuguese State
     constitute State aid under Article 92 ( 1 ), the measure
                                                                           of the guarantee for the operation to consolidate
     would be justified under Article 90 (2 ) of the EC                    EPAC's bank debts, which are directly related to its
     Treaty. EPAC does not just import and market cereals.                 liability in respect of the situation concerning
     Its activity in this field is important enough in terms of            SILOPOR, which is unable to pay its own debt to
     the general economic interest, given the large volume                 EPAC, are sufficient to give rise to a legitimate
     of the cereal imported to supply the country. However,                expectation on the part of EPAC and the creditor
     the undertaking also ( i ) supplies seed, fertilizer and              banks that the guarantee is lawful.
     plant protection products to the Portuguese agriculture
     industry; ( ii ) purchases cereals from the Portuguese
     producers, the majority of whom are smallholders
     who thus overcome the difficulties of marketing
     their cereal; ( iii ) provides services to industry and
     agriculture such as, for example, laboratory facilities,
     technical assistance for agricultural production, acting
     as intermediary for harvest insurance and financing,              Reference for a preliminary ruling from the Arbeitsgericht
     crop spraying, storage, drying and measuring of the               Gelsenkirchen, by order of that court of 29 August 1997,
     cereal .
                                                                       in the case of Susanne Lewen v. Lothar Denda, as
                                                                                proprietor of the Firm Denda Zahntechnik
                                                                                             ( Case C-333/97)
— Infringement of Article 92 ( 1 ) of the EC Treaty: the
     guarantee did not have the effect of distorting                                           ( 97/C 357/27 )
     competition or affecting intra-Community trade . The
     mere setting out of statistics showing the existence of
     commercial exchange between Portugal and the
     European Community in the cereal sector cannot be                 Reference has been made to the Court of Justice of the
     accepted as sufficient evidence .                                 European Communities by order of the Arbeitsgericht
                                                                       ( Labour Court) Gelsenkirchen, Third Chamber, of
                                                                       29 August 1997, received at the Court Registry on
                                                                       24 September 1997, for a preliminary ruling in the case of
— Infringement of Article 93 ( 3 ) ( c ) of the EC Treaty: the         Susanne Lewen v. Lothar Denda, as proprietor of the firm
     arguments put forward by the Commission to refrain                Denda Zahntechnik, on the following questions :
     from applying the exemptions under Article 92 ( 3 ), in
     particular those in subparagraph ( c ), are inadequate
     and contrary to the guidelines, defined by the
     Commission itself, which were considered admissible               1 . Is a Christmas bonus 'pay' within the meaning of
     in the Community's case-law. The Commission did not                   Article 119 of the EC Treaty or 'payment' within the
     accept the justification that the guarantee was                       meaning of Article 11 ( 2 ) ( b ) of Directive 92/85/
     emergency aid basing its opinion on serious and                       EEC (') for work performed in the year in which the
     blatant errors of fact and of law, and by failing to                  bonus is awarded even where it is given by the
     adduce any evidence as to whether the common                          employer mainly or exclusively as an incentive for
     interest was adversely affected, did not fully exclude                future work and/or loyalty to the firm . Is it to be
     the application of the exemptions under Article 92 ( 3 )              regarded as in the nature of pay or payment at least
     ( c ).                                                                where the employer has not announced prior to the
                                                                           beginning of the year of the award that at Chistmas in
                                                                           the following year he intends to relate it exclusively to
                                                                           the performance of future work and so to exclude
— Breach of the principle of proportionality: inasmuch as                  from the payment employees whose employment
     withdrawal of the aid would produce immediate and,                    relationship at the time of payment and thereafter are
     as regards EPAC, irreversible damage, it is hard to see               in abeyance ?