Commission of the European Communities v Hellenic Republic.
Date: 1993-06-10
3 The said Decision 89/659 found that the aid was unlawful as having been granted in breach of Article 93(2) of the Treaty, and also incompatible with the common market within the meaning of Article 92(1) of the Treaty, and ordered the special single tax scheme to be modified without delay (Article 1). The Commission similarly required recovery of the aid from the recipient undertakings, in the form of payment of the part of the tax which had not been levied (Article 2), and required the provision of information on the measures taken to comply with the decision and a report on the amount of the aid and the undertakings concerned by repayments (Article 3).
9 It is also not disputed that neither the Greek Government nor the undertakings which enjoyed the exemption have brought an action for annulment of the decision in question under Article 173 of the Treaty, and that it has consequently become definitive.
10 In those circumstances, in accordance with the Court' s settled case-law, the Hellenic Republic may no longer call in question the validity of a decision addressed to it on the basis of Article 93(2) of the Treaty once the time-limit laid down in the third paragraph of Article 173 of the Treaty has expired (Case 156/77 Commission v Belgium [1978] ECR 1881 and Case 52/84 Commission v Belgium [1986] ECR 89). It follows from the latter judgment in particular that in those circumstances the only defence which can be raised to the action for failure to fulfil Treaty obligations is that it is absolutely impossible to implement the decision properly.
16 It follows from the Court' s case-law that recovery of unlawful aid is the logical consequence of the finding that it is unlawful (see in particular Case C-142/87 Belgium v Commission [1990] ECR I-959, paragraph 66). That consequence cannot depend on the form in which the aid was granted.
17 Where an aid has been granted, as in the present case, in the form of a tax exemption and has duly been found to be unlawful, it is not correct to argue, as the Greek Government does, that recovery of the aid in question must necessarily take the form of a retroactive tax, which would as such be absolutely impossible to enforce, having regard in particular to the general principles of Community law. On the basis of Decision 89/659, the Greek authorities merely have to take measures ordering the undertakings which have received the aid to pay sums corresponding to the amount of the tax exemption unlawfully granted to them.
18 Moreover, while a recipient of unlawfully granted aid is not precluded from relying on exceptional circumstances which may legitimately have caused it to assume the aid to be lawful, a Member State, on the other hand, whose authorities have granted the aid contrary to the procedural rules laid down in Article 93 may not rely on the legitimate expectations of recipients in order to justify a failure to comply with the obligation to take the steps necessary to implement a Commission decision ordering it to recover the aid. If it could do so, Articles 92 and 93 of the Treaty would be set at naught, since national authorities would thus be able to rely on their own unlawful conduct in order to deprive decisions taken by the Commission under those provisions of the Treaty of their effectiveness (Case C-5/89 Commission v Germany [1990] ECR I-3437, paragraphs 16 and 17).
19 Finally, as regards the Greek Government' s other arguments, it must be emphasized that the fact that the only defence which a State to which a decision has been addressed can raise to an action such as that in the present case is that implementation of the decision is absolutely impossible does not prevent that State ° if, in giving effect to the decision, it encounters unforeseen and unforeseeable difficulties or perceives consequences overlooked by the Commission ° from submitting those problems for consideration by the Commission, together with proposals for suitable amendments to the decision in question. In such cases the Commission and the Member State must, by virtue of the rule imposing on the Member States and the Community institutions a duty of genuine cooperation, a rule which underlies in particular Article 5 of the Treaty, work together in good faith with a view to overcoming the difficulties while fully observing the Treaty provisions, in particular the provisions on aid (see Case 52/84 Commission v Belgium, cited above, and Case 94/87 Commission v Germany [1989] ECR 175).
20 In the present case the defendant Government merely informed the Commission of the legal and practical difficulties involved in implementing the decision, without taking any step whatsoever to recover the aid from the undertakings in question, and without proposing to the Commission any alternative arrangements for implementing the decision which would have enabled the alleged difficulties to be overcome.