Commission of the European Communities v Italian Republic.
Date: 2004-04-01
15. It is settled case-law that recovery of unlawful aid is the logical consequence of the finding that it is unlawful and that that consequence cannot depend on the form in which the aid was granted (see, in particular, Case C-183/91 Commission  v Greece  [1993] ECR I-3131, paragraph 16; Case C-404/97 Commission  v Portugal  [2000] ECR I-4897, paragraph 38; and Case C-404/00 Commission  v Spain  [2003] ECR I-6695, paragraph 44).
16. In accordance with a consistent line of decisions, where a Commission decision requiring the cessation of State aid incompatible with the common market has not been the subject of a direct action or where such an action has been dismissed, the only defence available to a Member State in opposing an infringement action by the Commission under Article 88(2) EC is to plead that it was absolutely impossible for it to implement the decision properly (Case C-348/93 Commission  v Italy  [1995] ECR I-673, paragraph 16; Case C-261/99 Commission  v France  [2001] ECR I-2537, paragraph 23; Case C-499/99 Commission  v Spain  [2002] ECR I-6031, paragraph 21; and Case C-404/00 Commission  v Spain , cited above, paragraph 45).
17. The fact that a Member State can only plead in its defence against such an action that implementation was absolutely impossible does not prevent a State which, in giving effect to a Commission decision on State aid, encounters unforeseen and unforeseeable difficulties or becomes aware of consequences overlooked by the Commission, from submitting those problems to the Commission for consideration, 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 which underlies, in particular, Article 10 EC, work together in good faith with a view to overcoming the difficulties whilst fully observing the Treaty provisions and, in particular, the provisions on aid (see Commission  v Italy , cited above, paragraph 17; Commission  v France , cited above, paragraph 24; Case C-378/98 Commission  v Belgium  [2001] ECR I-5107, paragraph 31; Case C‑499/99 Commission  v Spain , cited above, paragraph 24; and Case C-404/00 Commission  v Spain , cited above, paragraph 46).
18. However, the condition that it be absolutely impossible to implement a decision is not fulfilled where the defendant government merely informs the Commission of the legal, political or practical difficulties involved in implementing the decision, without taking any real step to recover the aid from the undertakings concerned, and without proposing to the Commission any alternative arrangements for implementing the decision which could have enabled the difficulties to be overcome (see Case 94/87 Commission  v Germany  [1989] ECR 175, paragraph 10; Case C-280/95 Commission  v Italy  [1998] ECR I-259, paragraph 14; Case C‑499/99 Commission  v Spain , cited above, paragraph 25; and Case C-404/00 Commission  v Spain , cited above, paragraph 47).
19. In the present case, it should first be borne in mind that, in paragraph 102 of Italy  v Commission , cited above, regarding the principle of legitimate expectation, the Court pointed out that, by a notice published in the Official Journal of the European Communities  (OJ 1983 C 318, p. 3), the Commission had informed potential recipients of State aid of the risk attaching to any aid granted to them illegally, in that they might have to refund the aid (see Case C-5/89 Commission  v Germany  [1990] ECR I-3437, paragraph 15).
20. It is true that a recipient of illegally granted aid is not precluded from relying on exceptional circumstances on the basis of which it had legitimately assumed the aid to be lawful and thus declining to refund the aid. If such a case is brought before a national court, it is for that court to assess the material circumstances, if necessary after obtaining a preliminary ruling on interpretation from the Court of Justice (see Case C-5/89 Commission  v Germany , cited above, paragraph 16, and Italy  v Commission , cited above, paragraph 103).
21. However, a Member State whose authorities have granted aid contrary to the procedural rules laid down in Article 88 EC may not plead the legitimate expectations of recipients in order to justify a failure to comply with the obligation to take the steps neces sary to implement a Commission decision instructing it to recover the aid. If it could do so, Articles 87 EC and 88 EC would be deprived of all practical force, since national authorities would thus be able to rely on their own unlawful conduct in order to render decisions taken by the Commission under those provisions of the Treaty ineffectual (see Case C-5/89 Commission  v Germany , cited above, paragraph 17, and Italy  v Commission , cited above, paragraph 104).
22. In paragraph 105 of its judgment in Italy  v Commission , cited above, the Court also recalled that, as to the argument that repayment would be complicated and hard to verify and the argument concerning the wide reach of the aid scheme across the fabric of national production industry, it is sufficient to point out, in accordance with the case-law of the Court, that apprehension of even insuperable internal difficulties cannot justify a failure by a Member State to fulfil its obligations under Community law (see, in particular, Commission  v Portugal , cited above, paragraph 52).
23. Neither the fact that the Member State in question finds it necessary to examine the individual situation of each undertaking concerned for the purposes of recovering unlawful State aid, as recognised by the Court in paragraph 91 of Italy  v Commission , cited above, nor the argument that the Commission initiated the action within an unusually short time after notification of the decision, can justify the failure to implement that decision (see Case C-404/00 Commission  v Spain , cited above, paragraph 56).
24. Because the second paragraph of Article 88(2) EC does not provide for a pre-litigation phase, in contrast to Article 226 EC, and therefore the Commission does not issue a reasoned opinion allowing Member States a certain period within which to comply with its decision, when the former provision is applied the reference period can only be that provided for in the decision failure to implement which is denied or, where appropriate, that subsequently fixed by the Commission ( Commission  v Belgium , cited above, paragraph 26). In the present case, Article 4 of Decision 2000/128 shows that the Commission had fixed a time-limit of two months from the date of notification of that decision.
25. It is common ground that, at the expiry of the time-limit, the measures necessary to recover the aid in question had not been taken by the Italian Government. In addition, it is apparent from paragraph 105 of the judgment in Italy  v Commission , cited above, that more than two and a half years after that time-limit, the Court found that the Italian Government had made no attempt to recover the aid in question.
28. Since none of the measures necessary to recover the aid referred to in Decision 2000/128 from the recipient undertakings have been taken by the Italian Government, it cannot validly rely on an alleged lack of cooperation on the part of the Commission in its defence.