Administración del Estado v Xunta de Galicia.
Date: 2005-07-21
22. As the Court has already held, it follows that, pursuant to the first sentence of Article 93(3) of the Treaty, plans to grant or alter aid must be notified to the Commission before they are implemented (see, inter alia, Case C-367/95 P Commission  v Sytraval and Brink’s France  [1998] ECR I‑1719, paragraph 35; Case C-295/97 Piaggio  [1999] ECR I‑3735, paragraph 44; and Case C-278/00 Greece  v Commission  [2004] ECR I-3997, paragraph 30).
31. However, contrary to what is suggested by the Xunta de Galicia, the fact that State aid might be compatible with the common market cannot, as such, affect the obligation of prior notification of that aid to the Commission under Article 93(3) of the Treaty. It is established case-law that the subsequent adoption by the Commission of a final decision declaring aid compatible with the common market does not have the effect of regularising ex post facto  the implementation of aid measures which, in breach of Article 93(3) of the Treaty, were not notified (Case C‑354/90 Fédération nationale du commerce extérieur des produits alimentaires and Syndicat national des négociants et transformateurs de saumon  [1991] ECR I‑5505, paragraphs 16 and 17, and Joined Cases C‑261/01 and C‑262/01 van Calster and Others  [2003] ECR I‑12249, paragraphs 62 and 63).
32. On the other hand, only State aid within the meaning of Article 92(1) of the Treaty is subject to the notification procedure laid down in Article 93(3) of the Treaty (Joined Cases 91/83 and 127/83 Heineken Brouwerijen  [1984] ECR 3435, paragraph 11). Pursuant to Article 92(1) of the Treaty, for a measure to be classified as State aid it must, inter alia, be liable to affect trade between Member States (see, to that effect, Case C‑280/00 Altmark Trans and Regierungspräsidium Magdeburg  [2003] ECR I-7747, paragraphs 74 and 75, and Case C‑172/03 Heiser  [2005] ECR I‑0000, paragraph 27).
33. It is for the national courts to interpret and apply the concept of State aid contained in Article 92(1) of the Treaty in order to determine whether a State measure introduced without observance of the preliminary examination procedure provided for in Article 92(3) ought to have been subject to that procedure (Case C‑44/93 Namur-Les assurances du credit  [1994] ECR I‑3829, paragraph 16).
34. In that regard, firstly it should be noted that aid to shipbuilding which is covered by the scope of Directive 90/684 does indeed affect trade between Member States within the meaning of Article 92(1) of the Treaty. Directive 90/684 was adopted on the basis of Article 92(3)(e) of the Treaty, pursuant to which categories of aid specified by decision of the Council may be considered compatible with the common market. Where aid is covered by derogating rules adopted under that provision, the aid is, as a matter of principle, at the outset incompatible with the common market and is considered to be compatible with the common market only on condition that it complies with the criteria for derogation contained in the decision approving those rules (Joined Cases C‑356/90 and C‑180/91 Belgium  v Commission  [1993] ECR I‑2323, paragraphs 30 and 33; Case C‑400/92 Germany  v Commission  [1994] ECR I‑4701, paragraph 15; and Case C‑36/00 Spain  v Commission  [2002] ECR I‑3243, paragraph 47).
35. It follows that, being incompatible at the outset, that aid amounts to State aid within the meaning of Article 92(1) of the Treaty, which means that it of necessity affects trade between Member States (see, to that effect, Case C‑36/00 Spain  v Commission , cited above, paragraph 48). Thus, in the present case, it is apparent, inter alia, from the third, sixth, ninth and fourteenth recitals in the preamble to Directive 90/684 that the latter is intended to ensure, on a world market, fair competition at international level between shipyards by encouraging the production of more technologically advanced ships in order to ensure the survival of an efficient and competitive European shipbuilding industry.
37. While Article 92(3)(e) of the Treaty empowers the Council to decide what categories of aid may be considered to be compatible with the common market, it does not confer on the Commission any power to interpret Article 92(1) of the Treaty (see, to that effect, Case C‑110/03 Belgium  v Commission  [2005] ECR I‑0000, paragraph 58).
40. As the Court has held, the condition for Article 92(1) of the Treaty to apply, by which the aid must be capable of affecting trade between Member States, does not depend on the local or regional character of the services supplied or on the scale of the field of activity concerned ( Altmark Trans and Regierungspräsidium Magdeburg , cited above, paragraph 82).
41. Moreover, there is no threshold or percentage below which it may be considered that trade between Member States is not affected. The relatively small amount of the aid or the relatively small size of the undertaking which receives it does not as such exclude the possibility that trade between Member States might be affected (see Altmark Trans and Regierungspräsidium Magdeburg , paragraph 81; Joined Cases C‑34/01 to C‑38/01 Enirisorse  [2003] ECR I‑14243, paragraph 28; and Heiser , cited above, paragraph 32).
42. In particular, a relatively small amount of aid may affect such trade where there is strong competition in the sector in which the undertakings that receive it operate (see Case C‑351/98 Spain  v Commission  [2002] ECR I‑8031, paragraph 63, and Case C‑298/00 P Italy  v Commission  [2004] ECR I‑4087, paragraph 54).
43. Thus, where a sector has a large number of small companies, aid potentially available to all or a very large number of undertakings in that sector can, even if individual amounts are small, have an impact on trade between Member States (see Case C-351/98 Spain  v Commission , cited above, paragraph 64, and Case C‑372/97 Italy  v Commission  [2004] ECR I‑3679, paragraph 57).
44. Finally, when aid granted by the State or through State resources strengthens the position of an undertaking compared with other undertakings competing in intra-Community trade the latter must be regarded as affected by that aid (Case 730/79 Philip Morris v Commission  [1980] ECR 2671, paragraph 11, and Case C‑156/98 Germany  v Commission  [2000] ECR I‑6857, paragraph 33).
45. Where a public subsidy is granted to shipbuilding or ship conversion undertakings, the supply of those services by the undertakings may for that reason be maintained or increased with the result that undertakings established in other Member States have less chance of providing their services in that sector in the market of that Member State (see, to this effect, Altmark Trans and Regierungspräsidium Magdeburg , paragraph 78).
49. It is for the national courts, in cases of infringement of the latter provision, to draw the necessary consequences, in accordance with their national law, with regard to both the validity of the acts giving effect to the aid and the recovery of financial support granted in disregard of that provision (see, to that effect, Fédération nationale du commerce extérieur des produits alimentaires and Syndicat national des négociants et transformateurs de saumon , cited above, paragraphs 11 and 12; van Calster and Others , cited above, paragraph 53; and Case C‑345/02 Pearle and Others  [2004] ECR I‑7139, paragraph 31). In particular, the finding that aid has been granted in breach of the last sentence of Article 93(3) of the Treaty must in principle lead to its repayment in accordance with the procedural rules of domestic law (Case C-39/94 SFEI and Others  [1996] ECR I‑3547, paragraph 68).
50. In the light of the foregoing, the answer to the question referred for a preliminary ruling must be that the Commission must be given prior notification, pursuant to Article 93(3) of the Treaty, of a scheme of aid to shipbuilding and ship conversion such as that set up by Decree No 217/1994, which does not fall within the scope of Directive 90/684, if it is established that the scheme is capable of itself of giving rise to the grant of State aid within the meaning of Article 92(1) of the Treaty. It is for the national court, in cases of infringement of Article 93(3) of the Treaty, to draw the necessary consequences, in accordance with its national law, with regard to both the validity of the acts giving effect to the aid and the recovery of financial support granted in disregard of that provision.
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