Deufil GmbH & Co. KG v Commission of the European Communities.
Date: 1987-02-24
4 IT CAN ALSO BE SEEN FROM THE FILE THAT :
( I ) CONTRARY TO THE SITUATION IN REGARD TO POLYAMIDE YARNS, POLYPROPYLENE YARNS, WHICH ARE A RELATIVELY RECENT PRODUCT, WERE NOT INCLUDED IN THE "AID CODE", THAT IS, THE GUIDELINES NOTIFIED TO THE MEMBER STATES BY THE COMMISSION CONCERNING AID TO BE GRANTED IN THE SYNTHETIC FIBRES AND YARNS SECTOR WITH EFFECT FROM 1985;
( II ) THE COMMUNITY MARKET IN POLYAMIDE AND POLYPROPYLENE YARNS IS SHARED BY A LARGE NUMBER OF SMALL OR MEDIUM-SIZED UNDERTAKINGS, WITH THE RESULT THAT THE APPLICANT IS REGARDED AS A MAJOR PRODUCER, EVEN THOUGH ITS SHARE OF COMMUNITY PRODUCTION IS ONLY TWO TO THREE PER CENT;
( III ) THE RATE OF UTILIZATION OF PRODUCTION CAPACITY IN THE COMMUNITY IN 1983 WAS 72% FOR POLYAMIDE YARNS AND 64% FOR POLYPROPYLENE YARNS .
8 THAT ARGUMENT CANNOT BE UPHELD . AS THE COURT EMPHASIZED IN ITS JUDGMENT OF 2 JULY 1974 ( CASE 173/73 ITALY V COMMISSION (( 1974 )) ECR 709 ), THE AIM OF ARTICLE 92 IS TO PREVENT TRADE BETWEEN MEMBER STATES FROM BEING AFFECTED BY BENEFITS GRANTED BY THE PUBLIC AUTHORITIES WHICH, IN VARIOUS FORMS, DISTORT OR THREATEN TO DISTORT COMPETITION BY FAVOURING CERTAIN UNDERTAKINGS OR THE PRODUCTION OF CERTAIN GOODS . THAT ARTICLE DOES NOT THEREFORE DISTINGUISH BETWEEN THE MEASURES OF STATE INTERVENTION CONCERNED BY REFERENCE TO THEIR CAUSES OR THEIR AIMS BUT DEFINES THEM IN RELATION TO THEIR EFFECTS . IN THIS CASE THE AMOUNT GRANTED REDUCED THE INVESTMENT COSTS TO BE BORNE BY THE APPLICANT AND THEREFORE FAVOURED IT IN COMPARISON WITH OTHER PRODUCERS IN THE SECTOR . THE GENERAL OBJECTIVES OF THE NATIONAL RULES FORMING THE LEGAL BASIS OF THE GRANT IN AID ARE NOT IN THEMSELVES SUFFICIENT TO PUT IT OUTSIDE THE SCOPE OF ARTICLE 92 .
18 AS THE COURT POINTED OUT IN ITS JUDGMENT OF 17 SEPTEMBER 1980 ( CASE 730/79 PHILIP MORRIS V COMMISSION (( 1980 )) ECR 2671 ), IN THE APPLICATION OF ARTICLE 92 ( 3 ), THE COMMISSION HAS A DISCRETION THE EXERCISE OF WHICH INVOLVES ECONOMIC AND SOCIAL ASSESSMENTS WHICH MUST BE MADE IN A COMMUNITY CONTEXT . THE COMMISSION IN NO WAY EXCEEDED THE LIMITS OF ITS DISCRETION BY CONSIDERING THAT THE GRANTING OF AID FOR AN INVESTMENT WHICH INCREASES PRODUCTION CAPACITY IN A SECTOR IN WHICH THERE IS ALREADY CONSIDERABLE OVERPRODUCTION IS CONTRARY TO THE COMMON INTEREST AND THAT AID OF THAT SORT IS NOT OF SUCH A NATURE AS TO PROMOTE THE ECONOMIC DEVELOPMENT OF THE AREA AT ISSUE .
22 HOWEVER, THAT IS NOT THE CASE . THE AID CODE CONSTITUTES GUIDELINES SETTING OUT THE COURSE OF CONDUCT WHICH THE COMMISSION INTENDS TO FOLLOW AND WITH WHICH IT ASKS THE MEMBER STATES TO COMPLY IN REGARD TO AID TO THE SYNTHETIC YARNS AND FIBRES SECTOR . IT DOES NOT DEROGATE FROM THE PROVISIONS OF ARTICLES 92 AND 93 OF THE TREATY, NOR COULD IT DO SO .
24 SINCE THE CONTESTED AMOUNT UNDOUBTEDLY CONSTITUTES AID WITHIN THE MEANING OF ARTICLE 92 ( 1 ), THE COMMISSION SHOULD HAVE BEEN INFORMED OF THE INTENTION TO GRANT IT IN ACCORDANCE WITH ARTICLE 93 ( 3 ) AND THE AID SHOULD NOT HAVE BEEN GRANTED BEFORE THE END OF THE PROCEDURE INITIATED BY THE COMMISSION . ACCORDING TO ARTICLE 93 ( 2 ), THE COMMISSION IS TO DECIDE THAT THE STATE CONCERNED IS TO ABOLISH OR ALTER THE AID IF IT FINDS THAT IT IS NOT COMPATIBLE WITH THE COMMON MARKET . WHERE, CONTRARY TO THE PROVISIONS OF ARTICLE 93 ( 3 ), THE PROPOSED AID HAS ALREADY BEEN GRANTED, THAT DECISION MAY TAKE THE FORM OF AN ORDER TO THE NATIONAL AUTHORITIES TO RECOVER THE AID .