Federal Republic of Germany v Commission of the European Communities.
Date: 2003-09-30
49. By order of 4 February 1997, the Court stayed the proceedings in the present case pending judgment by the Court of First Instance in Cases T-132/96 and T-143/96.
54. In support of its application, the Federal Republic of Germany puts forward a number of pleas in law, alleging breach of Article 92(2)(c) of the EC Treaty (now, after amendment, Article 87(2)(c) EC), breach of the obligation to state reasons under Article 190 of the EC Treaty (now Article 253 EC), breach of Article 92(3)(b) of the Treaty, breach of Article 92(3)(a) of the Treaty, breach of Article 92(3) of the Treaty, incomprehensibility and incorrectness of the cost-benefit analysis carried out by the Commission, and, finally, breach of the principle of the protection of legitimate expectations.
65. Since that provision was not repealed after the reunification of Germany either by the Treaty on European Union or by the Treaty of Amsterdam, it cannot, in the light of the objective scope of the rules of Community law, be presumed that it has been devoid of purpose since that reunification (see Case C-156/98  Germany  v  Commission  [2000] ECR I-6857, paragraphs 47 and 48, and Case C-334/99  Germany  v  Commission  [2003] ECR I-1139, paragraph 116).
66. However, since it constitutes a derogation from the general principle laid down in Article 92(1) of the Treaty that State aid is incompatible with the common market, Article 92(2)(c) must be interpreted narrowly (Case C-156/98  Germany  v  Commission , paragraph 49).
67. On this point, the Court has already held in Case C-156/98  Germany  v  Commission , paragraph 52, and Case C-334/99  Germany  v  Commission , paragraph 120, that the expression   " division of Germany"  refers historically to the establishment of the dividing line between the two occupied zones in 1948, and that the   " economic disadvantages caused by that division"  can therefore only mean the economic disadvantages caused in certain areas of Germany by the isolation which the establishment of that physical frontier entailed, such as the breaking of communication links or the loss of markets as a result of the breaking-off of commercial relations between the two parts of German territory.
70. The conception of the German Government, according to which Article 92(2)(c) of the Treaty permits full compensation for the undeniable economic backwardness suffered by the new  Länder ,  disregards both the nature of that provision as a derogation and its context and aims (see Case C-334/99  Germany  v  Commission , paragraph 121).
72. Consequently, as follows clearly from paragraph 54 of Case C-156/98  Germany  v  Commission , it is only the economic disadvantages directly caused by the geographical division of Germany which may be compensated for within the meaning of that provision.
87. According to settled case-law, the statement of reasons required by Article 190 of the Treaty must be appropriate to the act at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question, so as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent court to exercise its power of review. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 190 of the Treaty must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see, in particular, Joined Cases 296/82 and 318/82  Netherlands and Leeuwarder Papierwarenfabriek  v  Commission  [1985] ECR 809, paragraph 19, and Case C-367/95 P  Commission  v  Sytraval and Brink ' s France  [1998] ECR I-1719, paragraph 63).
88. It is true that the contested decision contains a short summary of the reasons for which the Commission refused to apply the derogation in Article 92(2)(c) of the Treaty to the facts of the case.
89. However, it must be pointed out that the contested decision was adopted in a context with which the German Government was familiar and forms part of a consistent decision-making practice.
90. On this point, it should be noted that in its relations with the Commission the German Government from 1990 referred on several occasions to the provisions of Article 92(2)(c) of the Treaty, stressing their importance for the economic recovery of the new  Länder .
91. The arguments put forward in this respect by the German Government were rejected by several decisions of the Commission, such as Commission Decision 94/266/EC of 21 December 1993 on the proposal to award aid to SST-Garngesellschaft mbH, Thüringen (OJ 1994 L 114, p. 21), the Mosel I decision, and Commission Decision 94/1074/EC of 5 December 1994 on the German authorities ' proposal to award aid to Textilwerke Deggendorf GmbH, Thüringen (OJ 1994 L 386, p. 13).
92. In view of this context, the contested decision could be reasoned in a summary manner (Case 73/74  Papiers Peints and Others  v  Commission  [1975] ECR 1491, paragraph 31, and Case C-156/98  Germany  v  Commission , paragraph 105).
93. In the present case, although the reasoning is summary, the contested decision was adequately reasoned.
105. Under Article 92(3)(b) of the Treaty, aid   " to remedy a serious disturbance in the economy of a Member State"  may be considered to be compatible with the common market.
129. In this respect, the Commission enjoys a wide discretion in the context of the application of Article 92(3) of the Treaty (see,  inter alia , Case C-225/91  Matra  v  Commission  [1993] ECR I-3203, paragraphs 23 to 25), so that, as regards the question whether the paint shop and final assembly hall of Mosel II and Chemnitz II should be classified as greenfield investments or extension investments, review by the Court is limited to verifying the accuracy of the facts relied on to make the disputed classification and ascertaining that there was no manifest error of assessment.
139. Without it being necessary to consider the question of the admissibility of this plea, it must be noted, with respect first to the complaint of alleged lack of reasoning concerning the calculation of the cost-benefit analysis, that the German Government was closely associated with the process of drafting the contested decision, and was therefore aware of the reason why the Commission considered that it could not accept the cost-benefit analysis done by Volkswagen (see, to that effect, Case 13/72  Netherlands  v  Commission  [1973] ECR 27, paragraph 12).
140. It should also be observed that the Commission is not required to address, in the reasoning of a decision, all the issues of fact and law raised by the persons concerned, where it has taken account of all the circumstances and all the relevant factors of the case (see, to that effect, Case C-360/92 P  Publishers Association  v  Commission  [1995] ECR I-23, paragraph 39, and Joined Cases C-329/93, C-62/95 and C-63/95  Germany and Others  v  Commission  [1996] ECR I-5151, paragraph 32).