CELEX: 62002CC0276
Language: en
Date: 2004-04-01
Title: Opinion of Mr Advocate General Poiares Maduro delivered on 1 April 2004. # Kingdom of Spain v Commission of the European Communities. # State aid - Definition - Non-payment of taxes and social security contributions by an undertaking - Attitude taken by the national authorities following a declaration of suspension of payments. # Case C-276/02.

OPINION OF ADVOCATE GENERALPOIARES MADUROdelivered on 1 April 2004(1)
         Case C-276/02Kingdom of SpainvCommission of the European Communities
            (State aid  –  Non-payment of taxes and social security contributions by an undertaking  –  Conduct of public authorities as creditor of an undertaking in difficulty)
            
      
         
        1.        By this action, the Kingdom of Spain is asking the Court to annul Commission Decision 2002/935/EC of 14 May 2002 on the State
      aid granted to Grupo de Empresas Álvares. 
         			(2)
         		 In that decision, which was addressed to Spain, aid constituted by the persistent non-payment of taxes and social security
      contributions by Grupo de Empresas Álvares SA (‘GEA’) and Vidrios Automáticos del Norte SA (‘Vanosa’), a subsidiary of GEA,
      following suspension of payments on 19 November 1997, for GEA, and 14 November 1997, for Vanosa, until January 2001, was found
      to be incompatible with the common market.
      
      
        2.        It is worth summarising the context of the case. This would appear all the more necessary as the application initiating proceedings
      submitted to the Court does not set out clearly the pleas supporting the claim for annulment. Such confusion gives rise to
      a procedural difficulty, which must be dealt with before the case is examined on the merits.
      
      
      I –  The context of the case 
       A – The situation of the undertakings receiving the aid
        3.        GEA manufactures and sells tableware made of porcelain and earthenware. Until 1991, it was one of the largest tableware manufacturers
      in Spain. Vanosa, a wholly‑owned subsidiary, was present in the glass packaging sector. Since 1992, the sector in which the
      undertakings were operating has been experiencing serious difficulties. In addition, the region where the group of undertakings
      was located, Galicia, has been in a situation of economic crisis. 
      
      
        4.        These difficulties prompted the Spanish public authorities to award GEA, between 1992 and 1996, various financial aid in the
      form of guarantees and a direct subsidy. Although that aid was found to be unlawful, on the ground that it had not been notified,
      the Commission declared, in an initial decision of 15 July 1997, 
         			(3)
         		 that the aid complied with the Community guidelines on State aid for rescuing and restructuring firms in difficulty and was
      therefore compatible with the common market. The Commission made that declaration conditional on two points, however. First,
      the Spanish authorities had to refrain from granting any further aid to the undertakings in the future, and to implement fully
      the approved restructuring plan. Second, the authorities had to submit to the Commission half‑yearly reports on the progress
      of the implementation of the restructuring plan as well as on GEA’s economic data.
      
      
        5.        The Commission received the second report on the implementation of the restructuring plan on 21 May 1999. Through this report,
      the Commission became aware of the suspension of payments declared at the request of those undertakings by the Juzgado de
      Primera Instancia (Court of First Instance) de Vigo (Spain) in 1997 and of the agreements concluded, in accordance with national
      legislation, with the Agencia Estatal de Administración Tributaria (State tax authorities) and the Tesorería General de la
      Securidad Social (social security authorities) in 1998 (the ‘agreements’). The agreements entered into by the tax authorities
      with each of the two undertakings on 14 April 1998 related to, first, a partial waiver of the two undertakings’ tax debts
      and second, deferred payment and long‑term payment rescheduling of the balance. The individual agreement concluded by Vanosa
      with the social security authorities on 6 November 1998 provided for a partial waiver of the amounts due to those authorities
      and deferred payment and payment rescheduling of the remaining amount. On analysis, the Commission does not seem to have discovered
      in that report any infringement of the conditions under which the aid was authorised. Only the complaints filed by competitors
      led the Commission to initiate again the procedure under Article 88(2) EC. Those complaints were based on the conduct of the
      Spanish authorities, which were alleged to have waived recovery of a significant amount of taxes and social contributions
      from the undertakings concerned. 
      
      
       B – The contested decision
        6.        The contested decision, adopted at the end of the procedure initiated by the Commission, states, in essence, that between
      the dates on which payments were suspended as far as GEA and Vanosa were concerned and January 2001, the two undertakings
      systematically failed to comply with their tax and social security obligations. The decision states that, in line with the
      Commission’s decision of 14 October 1998 concerning aid granted by Spain to firms in the Magefesa group and their successors,
      
         			(4)
         		 upheld by the Court of Justice in its judgment of 12 October 2000 in Spain  v Commission, 
         			(5)
         		 the persistent and systematic non-payment of social security contributions and of a substantial amount of taxes after the
      suspension of payments and the conclusion of the agreements constitutes a transfer of public resources to GEA and Vanosa.
      The Commission then explains that the advantage thus gained by these undertakings vis-à-vis their competitors in intra‑Community
      trade arises from the Spanish authorities’ failure to take the measures necessary to ensure that the firms fulfilled their
      obligations. This resulted in a considerable increase in the undertakings’ debts, and thus establishes that the State did
      not act, in the circumstances of the case, as a diligent private creditor.
      
      
        7.        In those circumstances, the Commission considers that the fact that the Spanish authorities have not demanded payment of the
      taxes and social security contributions owed by GEA and Vanosa constitutes aid under Article 87(1) EC. Further, the Commission
      considers that the aid does not qualify for any exemption under Article 87(2) or (3) EC. Consequently, the Commission finds
      the aid in question to be incompatible with the common market and requires the Kingdom of Spain to take all the necessary
      steps to recover the aid from the recipient.
      
      
      II –  Admissibility of the pleas 
        8.        In their submissions, both parties agree that the pleas in the application allege an infringement of Article 87(1) EC. In
      the applicant’s arguments, three pleas for annulment can be distinguished. The infringement of the EC Treaty is said to be
      constituted, first, by an error in the choice and interpretation of the legislative framework applicable, second, by an error
      as to the relevance of the facts taken as the basis for the contested decision, and, finally, by an error in the legal characterisation
      of the relevant facts. 
      
      
        9.        A doubt remains, however, as to the admissibility of another plea introduced in the course of proceedings. In its reply, the
      applicant requests the partial annulment of the contested decision on the basis that the period over which there is alleged
      to have been State aid is indefinite. The Commission detected a new plea in this request. It therefore asked that the plea
      be dismissed on the basis of Article 42(2) of the Court’s Rules of Procedure, which prohibits the introduction of any new
      plea in law in the course of the proceedings unless it is based on matters of law or of fact which came to light in the course
      of the procedure.
      
      
        10.      It will be recalled that the Court generally dismisses all pleas which are introduced for the first time in the reply. The
      Court will sometimes allow a new plea to be put forward at this stage, but only in one of the following three exceptional
      situations: it appears either that the plea in question in fact merely amplifies a plea put forward previously, directly or
      by implication, in the application initiating proceedings, 
         			(6)
         		 or that it constitutes a matter of public interest which must be raised of the Court’s own motion, 
         			(7)
         		 or that the plea is based on matters of law or of fact which came to light in the course of the procedure. 
         			(8)
         		
      
        11.      In this case, there seems to me to be no doubt that this late plea is inadmissible. What is the purpose of the forms of order
      sought by the Spanish Government in its reply? It is to criticise the manner in which the Commission established the duration
      of the aid. As formulated by the applicant, the plea is ambiguous. Although it appears straightforward, it involves two quite
      separate elements.
      
      
        12.      First, the applicant alleges that the account of the period over which the aid extended, in the grounds of the contested decision,
      lacks clarity. The decision is said to be vitiated by a procedural defect consisting in a defective statement of reasons.
      In that form, the legal basis of the plea is distinct from the legal basis of the pleas in the application, which all relate
      to the substantive legality of the decision. The late submission of a plea concerning a new legal issue which is unrelated
      to the pleas in the application initiating proceedings can, in my opinion, readily be classified as a new plea which must
      be declared inadmissible. If, however, the Court was to follow part of its case-law and consider that such a plea is a matter
      of public interest which must be raised by the Community judicature of its own motion, 
         			(9)
         		 it would be sufficient for it to find that the Commission complied with its obligation to state reasons by stating clearly,
      at points 41 to 55 of the grounds of the contested decision, the duration of the aid and the reasoning behind that determination.
      
         			(10)
         		 Even if it were held to be admissible, the plea based on a defective statement of reasons is unfounded.
      
      
        13.      Second, the applicant contests directly the duration of the aid in question. Specifically, it complains that the Commission
      set the starting point of the aid as the date of the suspension of payment procedures even though those procedures and the
      agreements were part of the waivers authorised by the Commission in its initial Decision 98/364 in 1997. According to the
      Commission, that complaint concerns a straightforward problem of quantification of aspects of the aid belonging to the phase
      following implementation of the contested decision. It seems to me to be more appropriate, however, to consider that determination
      of the time when advantages were accorded and their duration are a direct part of the process of characterising the aid. This
      plea therefore, in common with the pleas in the application, relates to the infringement of Article 87(1) EC. It does not
      follow however that it is admissible. 
      
      
        14.      There would doubtless be every interest in examining the validity of this plea if its admissibility could be established.
      It would then have to be stated that determination of the time when aid is granted may vary. In principle, there can be aid
      only when the advantages in question are accorded. It may be otherwise, however, when those advantages have been accorded
      in infringement of a decision on aid authorised by the Commission. In that case, the lawfulness of the measures authorised
      is linked strictly to compliance with the conditions laid down by the Commission as regards the State in question. Where it
      may be established that the State has not complied with the obligations and conditions to which it was bound, one might go
      so far as to consider that classification as aid extends not only to advantages for which no provision was made (in the present
      case, the waivers following the conclusion of the agreements) but also to measures which, when examined, had not given rise
      to any objections in the light of Treaty rules (here, the waivers following the suspension of payments procedures and the
      subsequent agreements). 
         			(11)
         		
      
        15.      The fact remains that such an effort is pointless in this case. The complaint is not, as the applicant claims, simply an argument
      supporting the pleas in the application. It constitutes an actual plea, supported by reasoning and matters of law and of fact
      which are different from those put forward in support of the application. Although the plea thus construed does have some
      connection with the legal basis for annulment put forward in the application, it is quite distinct from the pleas set out
      therein. It therefore serves to extend the subject‑matter of the dispute at a time when it is already fixed and cannot, in
      principle, change. In such cases, the Court has laid down strictly that the applicant is barred from relying on such a plea.
      
         			(12)
         		
      
        16.      I would add that, in this case, the exception provided for in the Rules of Procedure cannot apply: whatever its basis, it
      cannot be considered that the plea is based on matters which came to light in the course of the procedure. There was nothing
      to prevent the alleged illegality being pointed out as soon as the contested decision had been adopted.
      
      
        17.      It follows from the foregoing that both parts of the plea alleging that the period over which the aid was alleged to have
      been extended was not determined properly must be declared inadmissible.
      
      
      III –  Infringement of Article 87(1) EC and classification as State aid
        18.      The applicant puts forward three pleas in support of its application for annulment. In the first plea, it challenges the context
      and legal test applicable to aid measures for undertakings in difficulty. As a result, it claims, any suspension of payments
      procedure would involve State aid. Assuming that this context is accepted, the applicant disputes, in its second plea, the
      fact that the Spanish authorities were passive, as alleged, during the period of non-payment of taxes and social security
      contributions. In its third plea, the applicant objects to the Commission’s assessment of the Spanish authorities’ actions.
      
      
      
        19.      The first plea amounts to calling in question the relevance of the so-called ‘private creditor’ test in the analysis of the
      treatment of undertakings in difficulty, whereas the other two pleas are based on alleged errors made in the application of
      this test to the present case.
      
      
       A – Error of law: relevance of the ‘private creditor’ test in defining State aid
        20.      The applicant considers, first, that the conduct in issue results from an ordinary application of the national law on insolvency.
      Any other undertaking in the same situation could have been subject to the same procedures. The applicant suggests that the
      analytical framework used by the Commission in the contested decision amounts to calling general rules in question, rather
      than specific measures, as Community law regarding State aid requires. All insolvency prevention procedures established by
      Member States are therefore under threat.
      
      
        21.      It is true that the Court has held that the possible loss of tax revenue for a State as a result of the application of the
      system of special administration, on account of the absolute prohibition on individual actions for enforcement and the suspension
      of interest on all debts owed by the undertaking in question, does not in itself justify treating that system as aid. The
      reason for this is that that consequence is an inherent feature of any statutory system laying down a framework for relations
      between an insolvent undertaking and the general body of creditors, and the existence of an additional financial burden borne
      directly or indirectly by the public authorities as a means of granting a particular advantage to the undertakings concerned
      may not automatically be inferred therefrom. 
         			(13)
         		 The fact remains that, in certain circumstances, the conduct of the State in the context of insolvency procedures may constitute
      aid for the purpose of Article 87(1) EC. 
         			(14)
         		 That was held by the Court, in particular, as regards the public creditors’ decision not to seek the liquidation of the Magefesa
      group companies, which had failed to comply with their tax obligations until they ceased to operate. 
         			(15)
         		
      
        22.      As the Commission explains, the legal context here can clearly be deduced from this case-law, in particular the Magefesa case. The Commission has not indicated anywhere in the contested decision that the constitution of State aid can be inferred
      from insolvency prevention procedures initiated and agreements concluded, or even from the resulting losses for the public
      creditors. Neither the national law on insolvency nor the preventive procedures per se are called in question in this decision. In this respect, it is not disputed that various means of action were available
      to the public creditors in order to make the undertakings in question fulfil their obligations, as well as a discretionary
      power in the choice of application of these means. In the light of the case-law of the Court, this is sufficient to establish
      that this is a case of specific measures. 
         			(16)
         		 The aid is presumed to result not from the general advantage which may be obtained from the national legislation but from
      the specific  and selective  advantage resulting from its application in the case in point. 
         			(17)
         		
      
        23.      In order to assess the conduct of public authorities in cases such as this one, the Court has laid down a methodology, tested
      by the Commission, which involves comparing the conduct of the public authorities with that of a diligent private creditor
      in the same circumstances. 
         			(18)
         		 It must be considered whether, in like circumstances, a private creditor would have found it necessary to conclude the same
      agreements, grant the same waivers and adopt the same attitude in managing these agreements. If those actions enable the undertaking
      in question to overcome a temporary crisis, to the advantage of the creditor, they may be accepted. However, if they are limited
      to seeking to rescue an undertaking which is not viable and not adapted to market conditions, they will be censured, as they
      are thereby contrary to the logic of economic efficiency and the proper functioning of the common market.
      
      
        24.      In the contested decision, the Commission correctly points out that the private creditor test must not be confused with the
      more classic private investor test in the Court’s case-law. 
         			(19)
         		 Whereas an investor seeks to realise a profit by making representations to undertakings, a creditor seeks to obtain payment
      of sums owed to it by a debtor in financial difficulties. 
         			(20)
         		 The investor is in a position to choose the investment which seems to him to be the most profitable. In theory, the capital
      which he is prepared to invest in an undertaking is available, under the same conditions, to all operators on the market.
      This is not the creditor’s situation. A creditor is already in a privileged relationship with a debtor undertaking to which
      he may be prepared to grant further advantages in the form of a waiver or debt rescheduling. The capital which is at stake
      in these circumstances is not ‘on the market’. It is not available, under the same conditions, to other economic operators.
      Such capital is allocated in consideration only of the interests of the two parties. The effect of this difference between
      the two situations is, in my opinion, a difference in the manner of assessing the comparison between the conduct of public
      authorities and that of a private operator. In an investment situation, the comparison is carried out ‘in normal market conditions’.
      If the capital is allocated under favourable conditions for the investor, even to an undertaking in difficulty, so that the
      investor may expect a more or less long-term financial profit, there is no advantage and competition is not distorted. The
      situation is different in a creditor-debtor relationship. They can only be in ‘similar market conditions’. 
         			(21)
         		 It is a question of assessing the situation of debtor undertakings with regard to the situation of undertakings with the
      same difficulties rather than with regard to the situation of their competitors on the market. Then one should consider not
      only whether there is an economic advantage, as there is no doubt on that score, 
         			(22)
         		 but also whether that advantage is a ‘selective’ advantage, in that it would have the effect of granting an undertaking preferential
      treatment, without any justification in accordance with the logic of economic efficiency. 
         			(23)
         		 In that case, the decisive test is not whether there is an economic advantage, but whether that advantage amounts to treatment
      which is more favourable than that which would be granted, under similar conditions, by a private creditor to a debtor undertaking.
      
      
        25.      In both cases, one cannot but approve the method of comparison based on the private operator test. Such a method is in accordance
      with the general objective pursued by the Treaty, which is to avoid creating artificial advantages to the benefit of certain
      economic interests, thus giving them a privileged position. 
         			(24)
         		 However, it is appropriate to take account of the variable conditions in which the test will have to be applied. The test
      has neither the same function nor the same meaning when it applies in the case of an investor as it does in the case of a
      creditor.
      
      
        26.      In this case, it does not seem that the legal context and method applied by the Commission should be the subject of any major
      criticism. They are in accordance with the distinction and test derived from the case-law of the Court. The only question
      which actually arises is how what the Commission calls the ‘Magefesa doctrine’ should apply in the specific circumstances
      of the case, having regard to the conduct of the public authorities. It is apparent from settled case-law that as far as concerns
      the appraisal of an advantage which constitutes State aid, the specific facts of the case are of particular importance. 
         			(25)
         		
      
        27.      A first conclusion is called for. The error of law has not been established. The first plea is therefore unfounded.
      
      
       B – Error in the application of the diligent private creditor test
        28.      This error is said to stem, first, from partial account having been taken of the relevant facts. It is said to follow, second,
      from an incorrect legal characterisation of the facts brought to the knowledge of the Commission. 
      
      
       1. Material error of fact
      
        29.      In order to ascertain whether the Spanish authorities’ conduct, in the circumstances of the case, was that of a sufficiently
      diligent creditor, it is necessary to establish which steps were actually taken. The Spanish Government considers that the
      contested decision does not reflect correctly the relevant facts which were available to the Commission. The Government thereby
      concludes that the decision was adopted by reason of circumstances other than those alleged by the Commission.
      
      
        30.      It must be recalled that, in the context of an application for annulment, the legality of the contested measure must be assessed
      on the basis of the elements of fact and of law existing at the time the measure was adopted. 
         			(26)
         		 It follows more specifically from this rule, as far as concerns State aid, that it cannot be complained that the Commission
      did not take into account elements of fact which had not been brought to its attention at the time the conduct in issue was
      examined. 
         			(27)
         		 It is apparent from the documents in the file submitted to the Court that much information contained in the application supporting
      the Spanish Government’s arguments had not been communicated to the Commission during the administrative examination procedure.
      Certain matters either arose after the contested decision 
         			(28)
         		 or were not communicated in good time to the author of the decision 
         			(29)
         		 and therefore cannot properly be relied on in support of a plea submitted to the Court. The plea alleging error of fact,
      in so far as it is based on those matters, cannot be accepted.
      
      
        31.      Although the application is better documented than the file constituted by the Commission during the examination procedure,
      it is also apparent from the documents provided to the Court that that file is more complete than the contested decision suggests.
      
         			(30)
         		 It thus seems that the seizures and charges effected were not mentioned in detail in the decision, in which the Commission
      merely notes the seizure of real estate and various assets. 
         			(31)
         		
      
        32.      Must one conclude therefrom that the contested decision is unlawful? This is asserted by the applicant, which considers that
      those facts testify to its activity and to the diligence displayed by the authorities in the management of the insolvency
      procedures. The Commission disputes that the taking into account of those facts could suffice to alter its analysis. Both
      parties thereby, in fact, shift the issue. For the parties, the heart of the matter is rather the manner in which the facts
      were assessed. The alleged illegality is debated as a consequence, not of material error, but of the legal assessment of the
      facts. 
      
      
        33.      On this point, it must, in any event, be recognised that the Commission has some freedom in establishing and choosing the
      relevant facts. The Commission may be criticised only for having omitted to refer to certain circumstances which could be
      useful to the analysis. However, it does not appear and indeed it is not alleged that the contested decision is based on materially
      incorrect or distorted facts. In those circumstances, a mere factual inaccuracy in the grounds cannot alone render the operative
      part of the decision unlawful. Consequently, the plea based on an error of fact must be rejected. 
      
      
       2. Error in the legal assessment of the facts
      
        34.      The question which must be posed is as follows: do the facts which were in the knowledge of the Commission during the examination
      procedure justify the conclusion that the Spanish authorities were not sufficiently diligent? In other words, if all the facts
      of the case, including those which were not referred to in the grounds of the decision, are taken into account, is the assessment
      that was made likely to be changed? That question must now be examined.
      
      
        35.      The Spanish Government maintains that, in applying the private creditor test, the Commission did not take sufficient account
      of the means employed by the competent authorities to secure recovery of debts which arose after the agreements were concluded.
      The seizure of movable and immovable property, the application for attachment of bank accounts effected by the social security
      authorities in 2001, the seizure of social housing and the attachment of GEA’s commercial trademarks and debts owed by the
      undertakings’ main customers by the tax authorities between 1999 and 2001, were allegedly passed over in silence. That error
      led the Commission to the incorrect assessment that Spain failed ‘to take measures available under Spanish law (separate forced
      collection procedures) to prevent firms from continuing to operate without fulfilling their tax and social security obligations’.
      
         			(32)
         		 The Commission responds that the means employed were late and, in any event, ineffective. The fact that they were not able
      to prevent a significant increase in the debt of the undertakings concerned following conclusion of the agreements, shows
      the failings of the public authorities. The authorities did not use all the legal instruments available to them, as privileged
      creditors, to deal with the undertakings’ failure to make payment. In such a situation, the authorities should have made use
      of the possibility of requesting the winding up of the undertakings and liquidation of their assets.
      
      
        36.      Before I take a view on this dispute, I would like to consider again briefly the diligent private creditor test, the subject
      of the contested classification. The figure of the ‘private creditor’ remains mysterious in the case-law, even more so when,
      as in the case where a public creditor has priority claims, he is replaced by the fiction of the ‘hypothetical private creditor’.
      
         			(33)
         		 That fiction is, in my view, meant to emphasise an essential attribute. ‘The diligent private creditor in a market economy’
      is an efficient  economic operator, capable of discerning and using the most appropriate means of achieving a certain result, which is the
      recovery of its debts.
      
      
        37.      That attribute of efficiency entails, in particular, taking into account all the factors which are specific to the relationship
      in which the private creditor is involved. 
         			(34)
         		 When the applicant claims that, in another decision, the Commission took the opposite view on a similar question, the Commission
      rightly replied that the circumstances of that case were very different. That decision, unlike the contested decision, took
      into account the active and reasonable conduct of the social security and the tax authorities. 
         			(35)
         		
      
        38.      I would also point out that the test does not require the public authorities to be indifferent to the other objectives pursued
      in the framework of insolvency procedures. It is open to them to take into account, as in this case, the ‘general and social
      interest in maintaining the jobs’. 
         			(36)
         		 However, that may have an effect only within the framework of the examination of the compatibility of the aid pursuant to
      Article 87(3) EC. For the purpose of classification as State aid, State action is not measured by the value or importance
      of the objectives pursued. It is measured by the effectiveness of the means employed in order to protect its interests as
      a creditor. It is from that point of view alone that, in this context, the conduct of the public authorities should be appraised.
      
      
      
        39.      It must be acknowledged, finally, that the private creditor test does not require an application to be made for the immediate
      winding up of the undertaking in difficulty. 
         			(37)
         		 In principle, the Spanish authorities cannot be criticised for having wanted to avoid the undertakings in question having
      to cease their activities. It is quite conceivable that a private creditor, with significant resources at its disposal, might
      have an interest in maintaining the activity of a debtor undertaking for a certain period, if the cost of immediate liquidation
      prove to be higher than the cost of granting aid. Each creditor has to compare the gain possibly resulting from rapid liquidation
      of the undertaking with the gain that could result from a temporary waiver of recovery of debt while the debtor continues
      its activities. 
      
      
        40.      It appears to me that, in accordance with the case-law of the Court, a choice in favour of waiver must fulfil at least three
      conditions. First, it must be possible in principle to make the undertaking economically viable and to improve its financial
      position. 
         			(38)
         		 Second, everything possible must be done in order to prevent further credit being obtained and new debts accumulated. 
         			(39)
         		 Third, the State must be able to rely on the recovery of the debts owed to it within a reasonable period. 
         			(40)
         		
      
        41.      Application of this analytical framework to the circumstances of the case shows the weakness of the Spanish Government’s position.
      At the time when, after the agreements were concluded, the undertakings could still be presumed viable and the recovery of
      the debts anticipated within a reasonable period, it appears that the most effective procedures for preventing the build-up
      of new debt were not used. This lack of efficiency and diligence is clear in three respects in particular. 
      
      
        42.      It follows, first, from the belated nature of the means employed. The seizures referred to by the applicant, following the
      suspension of payments procedures, were initiated only from the end of the year 2000, that is, more than three years after
      the declaration of suspension of payments. When, finally, the Spanish authorities decided to cancel the agreements and resume
      enforcement procedures, the build-up of debt made any recovery highly improbable. 
         			(41)
         		 That delay in taking action is all the more apparent as the parties have acknowledged that private creditors were more rapid
      than the public creditors in requesting enforcement of charges and the winding up of Vanosa. The lack of diligence follows,
      second, from the ineffectiveness of the means used. It is apparent from the file that the seizures carried out had very limited
      effect. Moreover, mere ‘pressure’ brought to bear by the public authorities cannot suffice, as the applicant claims, to compensate
      for the lack of direct action. Besides the fact that the actual effects of such pressure are hypothetical, the only purported
      probable effect (the closing down of the undertakings) is irrelevant to the objective pursued: the recovery of the debt. Lastly,
      inefficiency and lack of diligence are demonstrated by the lack of knowledge of the Spanish authorities. The fact that the
      Kingdom of Spain was not capable of communicating the exact amount of taxes due in itself reveals some negligence. However,
      it is also established that the public authorities were unable to comment with any certainty as to the state of activity of
      the undertakings concerned. Far from justifying GEA’s failure to fulfil its tax obligations, as the applicant maintains, such
      a lack of information illustrates a lack of vigilance on the part of the competent authorities. 
      
      
        43.      The applicant suggests finally that greater diligence on the part of the competent authorities would not have enabled the
      agreements to be cancelled more rapidly. This is explained by the actual operation of the administrative system for the recovery
      of debt. 
         			(42)
         		 However, it is settled case-law that supposed difficulties of a practical and administrative nature cannot justify a failure
      to carry out the measures necessary to comply with the fundamental rules of the Treaty 
         			(43)
         		 and, in this instance, to enforce a decision authorising restructuring aid.
      
      
        44.      In those circumstances, and in view of the background to this case, it is difficult not to accept that a diligent creditor
      would have had every interest in cancelling the agreements and bringing about the liquidation of the undertakings concerned
      as quickly as possible. It will be recalled that consideration of the undertakings’ position had to take place within the
      framework of a restructuring plan, the application of which was subject to the strict condition that no new aid was to be
      granted, including aid in the form of a waiver of unpaid claims. 
         			(44)
         		 The recognised fact that the agreements were infringed from the moment they were concluded was sufficient indication, in
      my opinion, of the approach which ought to have been adopted. It is the failure of the Spanish authorities to react, even
      though they were aware of the situation, which constitutes State aid. 
      
      
        45.      I consider that, in taking due account of the individual circumstances of the case, the Commission applied the private creditor
      test correctly. The plea alleging error in the legal assessment of the facts, like the other pleas considered, should be rejected.
      
       
      IV –  Conclusion
        46.      In the light of the above considerations, I propose that the Court:
      
      (1)
         dismiss the application;
      
      
      (2)
         order the Kingdom of Spain to pay the costs.
      
      
      
       1 –
         
         Original language: Portuguese.
      
      2 –
         
         OJ 2002 L 329, p. 1 (‘the contested decision’).
            
         
      
      3 –
         
         OJ 1998 L 164, p. 30.
            
         
      
      4 –
         
         OJ 1999 L 198, p. 15.
            
         
      
      5 –
         
         Case C-480/98 Spain v Commission [2000] ECR I-8717.
            
         
      
      6 –
         
         Case 108/81 Amylum v Council [1982] ECR 3107, paragraph 25.
            
         
      
      7 –
         
         Case C-166/95 P Commission  v Daffix [1997] ECR I‑983, paragraph 24.
            
         
      
      8 –
         
         Joined Cases C-238/99 P, C-244/99 P, C-245/99 P, C-247/99 P, C-250/99 P to C-252/99 P and C-254/99 P Limburgse Vinyl Maatschappij and Others v Commission [2002] ECR I-8375, paragraphs 369 to 379.
            
         
      
      9 –
         
         Although classification of the obligation to state reasons as a matter of public policy appears well settled in the case-law,
            uncertainty remains as to the procedural consequences flowing from it. Sometimes the Court simply considers that it ‘may of
            its own motion consider the question of infringement of an essential procedural requirement’ of which the obligation to state
            reasons is one (see, inter alia, Case C-304/89 Oliveira v Commission [1991] ECR I-2283, paragraph 18), sometimes the Court considers it a binding duty (see, inter alia, Case C-457/00 Belgium v Commission [2003] ECR I-6931, paragraph 102). In my opinion, the power to raise a matter of public interest of its own motion is a mere
            option and not a legal obligation. It is only a ‘duty’ in the general sense where the Community judicature has the task of
            ensuring effective judicial protection, so that it is only necessary where the infringement of the obligation in question
            seems obvious.
            
         
      
      10 –
         
         In these points of the contested decision, the Commission clearly states the period covered by the aid and its intention to
            call in question the inaction of the public authorities in the face of the debts contracted by the undertakings concerned
            following the suspension of payments.
            
         
      
      11 –
         
         See, to that effect, Keppenne J.-P., Guide des aides d’État en droit communautaire, Bruylant, Brussels, 1999, p. 94.
            
         
      
      12 –
         
         See, for example, Case 11/81 Dürbeck v Commission [1982] ECR 1251, paragraph 13; and Case 59/83 Biovillac  v EEC [1984] ECR 4057, paragraph 24.
            
         
      
      13 –
         
         Case C-200/97 Ecotrade  v AFS [1998] ECR I-7907, paragraph 36. In support of this assertion, the Court cites Joined Cases C-72/91 and C-73/91 Sloman Neptun  v Bodo Ziesemer [1993] ECR I-887, paragraph 21.
            
         
      
      14 –
         
         See Case C-342/96 Spain v Commission [1999] ECR I-2459; Case C-256/97 DMTransport [1999] ECR I-3913, and Spain v Commission, cited in footnote 5.
            
         
      
      15 –
         
         .Spain v Commission, cited in footnote 5.
            
         
      
      16 –
         
         See Case C-241/94 France v Commission [1996] ECR I-4551, paragraphs 20 and 21, and DM Transport, cited in footnote 14, paragraph 30. See also the Opinion of Advocate General La Pergola in Case C-342/96 Spain v Commission  cited in footnote 14, point 8; the Opinion of Advocate General Jacobs in that case, point 40, and the Opinion of Advocate
            General Mischo in Spain v Commission, cited in footnote 5, points 12 to 14.
            
         
      
      17 –
         
         It is to be noted that sometimes the Court does not differentiate between specificity and selectivity (see, for example, Case
            C-75/97 Belgium v Commission [1999] ECR I-3671, paragraph 26). However, one might ask whether they should not be distinguished. Specificity precludes generality. A measure is specific when it applies to a particular category of undertakings although such differentiation cannot be justified
            by the nature and structure of the system of charges of which it forms part (see, to that effect, Case C‑409/00 Spain v Commission [2003] ECR I-1487, paragraph 52). Such a measure results in the application of particular treatment. Selectivity is a separate condition which occurs at a different stage of the analysis (see points 24 and 25 of
            this Opinion). Selectivity does not preclude generality but rather equal treatment and presupposes that, in a common category of operators, some are selected for preferential treatment. In that way there may be a specific advantage that is not selective.
            
         
      
      18 –
         
         Case C-342/96 Spain v Commission, cited in footnote 14, paragraph 46.
            
         
      
      19 –
         
         Point 49 of the grounds of the contested decision. Concerning the private creditor test, see inter alia Case C-305/89 Italy v Commission [1991] ECR I-1603; Joined Cases C-278/92 to C-280/92 Spain v Commission [1994] ECR I-4103, and Case C-334/99 Germany v Commission [2003] ECR I-1139.
            
         
      
      20 –
         
         See, to that effect, Case C-342/96 Spain v Commission, cited in footnote 14, paragraph 46 and DM Transport, cited in footnote 14, paragraph 24.
            
         
      
      21 –
         
         See, to that effect, the Opinion of Advocate General Jacobs in DM Transport, cited in footnote 14, point 34.
            
         
      
      22 –
         
         As the Commission was able to plead before the Court on the sole basis of the private investor test, in such circumstances
            it would have been more difficult for the debtor undertaking to obtain such capital on the market. Even if the undertaking
            concerned had been placed in a situation where it had to turn to the capital market to obtain a loan of a sum equivalent to
            the advantage for that undertaking resulting from the waiver or rescheduling of its debts, it is clear that it would have
            had to agree to less favourable conditions (see the argument of the Commission in Case C-342/96 Spain v Commission and DM Transport, both cited in footnote 14, at paragraphs 36 and 23 respectively). This is sufficient for it to be considered that it constitutes
            an advantage (see, also to that effect, the Opinion of Advocate General La Pergola in Case C‑342/96 Spain v Commission, cited in footnote 14, point 11). However, for the Court, that is not enough to consider that there is State aid (Case C-342/96
            Spain v Commission, cited in footnote 14, paragraphs 47 to 49).
            
         
      
      23 –
         
         The private creditor test thus illustrates that, in certain cases, there may be an advantage given to an undertaking as opposed
            to its competitors under normal market conditions that is not selective, provided that the advantage could have been offered
            to any other operator in the same circumstances.
            
         
      
      24 –
         
         It cannot be denied that selective State measures expose the Community to a major risk: the risk of ‘abuse’ of the political system, which consists in giving
            an advantage to a limited group and making the other members of the community bear the cost, even though the latter have no
            direct influence over the decision to grant the advantage.
            
         
      
      25 –
         
         See Ecotrade, cited in footnote 13, paragraph 37, and Spain v Commission, cited in footnote 5, paragraphs 19 to 21.
            
         
      
      26 –
         
         Joined Cases 15/76 and 16/76 France v Commission [1979] ECR 321, paragraph 7.
            
         
      
      27 –
         
         .Spain v Commission, cited in footnote 19, paragraph 31, and Case T-110/97 Kneissel Dachstein v Commission [1999] ECR II‑2881, paragraph 102.
            
         
      
      28 –
         
         In support of its argument, the applicant points to the seizure of the Vanosa factory in June 2002, the fact that Vanosa was
            succeeded by a limited company owned as to the majority by the workers and the liquidation of GEA’s assets as determined by
            a national court between March and October 2002.
            
         
      
      29 –
         
         That is true in particular of the following facts, set out in the application: a request, by the employees of Vanosa, for
            that company to be wound up, in June 2001; the dismissal of that request by the competent national court; a probable termination
            of the activities of GEA and Vanosa in 2001; cancellation of the agreement of 6 November 1998 by the social security authorities
            on 20 December 2001; meetings arranged, in July and November 2000, between the tax authorities and the administrators of the
            undertakings for the purpose of ordering those undertakings to comply with their obligations.
            
         
      
      30 –
         
         This is indicated inter alia by a comparison of the contested decision with the letter of 29 November 2001, in which the Spanish
            authorities set out their observations during the examination procedure initiated by the Commission.
            
         
      
      31 –
         
         Points 37 and 44 of the grounds of the contested decision.
            
         
      
      32 –
         
         Point 47 of the grounds of the contested decision.
            
         
      
      33 –
         
         See, to that effect, the Opinion of Advocate General Jacobs in DM Transport, cited in footnote 14, point 36, and the Opinion of Advocate General Mischo in Spain v Commission, cited in footnote 5, point 34.
            
         
      
      34 –
         
         The Court of First Instance held in Case T-152/99 HAMSA v Commission [2002] ECR II-3049, paragraph 168, that ‘when a firm faced with a substantial deterioration of its financial situation proposes
            an agreement or series of agreements for debt arrangement to its creditors with a view to remedying the situation and avoiding
            liquidation, each creditor must make a decision having regard to the amount offered to it under the proposed agreement, on
            the one hand, and the amount it expects to be able to recover following possible liquidation of the firm, on the other. Its
            choice is influenced by number of factors, including the creditor’s status as the holder of a secured, preferential or ordinary
            claim, the nature and extent of any security it may hold, its assessment of the chances of the firm being restored to viability,
            as well as the amount it would receive in the event of liquidation’.
            
         
      
      35 –
         
         Commission Decision 2003/283/EC of 27 November 2002 on the measures implemented by Spain in favour of Refractarios Especiales
            SA (OJ 2003 L 108, p. 21).
            
         
      
      36 –
         
         That concern is apparent in particular from the account of the grounds of the agreement concluded between the social security
            authorities and Vanosa on 6 November 1998.
            
         
      
      37 –
         
         .  –	See, to that effect, the Opinion of Advocate General Mischo in Spain v Commission, cited in footnote 5, point 36.
            
         
      
      38 –
         
         It will be recalled that this requirement appears in the Guidelines adopted by the Commission on State aid for rescuing and
            restructuring firms in difficulty and that it had been set out by the Court as a condition for the compatibility of restructuring
            aid even before the guidelines had been published, in Spain v Commission, cited in footnote 19.
            
         
      
      39 –
         
         See Case C-342/96 Spain v Commission, cited in footnote 14, paragraph 47.
            
         
      
      40 –
         
         See, to that effect, the Opinion of Advocate General Jacobs in DM Transport, cited in footnote 14, point 38.
            
         
      
      41 –
         
         It will be recalled that, for the period in question, running from January 1997 to January 2001, the debt accumulated by GEA
            in terms solely of employers’ contributions amounted to ESP 2 582 880 484, of which ESP 166 937 745 were paid, while, for
            the same period and the same contributions, the debt of its subsidiary Vanosa was ESP 557 166 270, of which ESP 105 989 762
            were paid.
            
         
      
      42 –
         
         Reply, p. 14.
            
         
      
      43 –
         
         See, by analogy, Case C-18/95 Terhoeve v Inspecteur van de Belastingdienst Particulieren/Ondernemingen Buitenland [1999] ECR I-345, paragraph 45.
            
         
      
      44 –
         
         Point 50 of the grounds of the contested decision.