Commission of the European Communities v Hellenic Republic.
Date: 2009-07-07
43. With regard to the period within which it was necessary to comply with that judgment, it should be recalled that, according to settled case-law, the reference date for assessing whether there has been a failure to fulfil obligations under Article 228 EC is the date of expiry of the period prescribed in the reasoned opinion issued under that provision (see Case C‑304/02 Commission v France  [2005] ECR I‑6263, paragraph 30; Case C‑119/04 Commission  v Italy  [2006] ECR I‑6885, paragraph 27; and Case C‑503/04 Commission  v Germany  [2007] ECR I-6153, paragraph 19).
45. As regards the response to the reasoned opinion in which the Hellenic Republic set out the measures for the recovery of various amounts of aid, while at the same time disclosing that Olympic Airways had brought proceedings before the administrative court and mentioning difficulties concerning the quantification of the sums to be reimbursed and complex repayment procedures, it is sufficient to call attention to the fact that, according to established case-law, a Member State cannot plead provisions, practices or situations prevailing in its domes tic legal order to justify the failure to observe obligations arising under Community law (see Commission v Germany , paragraph 38, and Case C‑70/06 Commission  v Portugal [2008] ECR I‑1, paragraph 22).
48. In addition, the Court has held that no provision of Community law requires the Commission, when ordering the recovery of aid declared incompatible with the common market, to fix the exact amount of the aid to be recovered and that it is sufficient for the Commission’s decision to include information enabling the recipient to calculate the amount itself, without overmuch difficulty (see Case C-480/98 Spain  v Commission  [2000] ECR I-8717, paragraph 25, and Case C‑441/06 Commission  v France  [2007] ECR I-8887, paragraph 29).
49. Accordingly, the Commission was entitled to confine itself to insisting on compliance with the obligation to recover the amounts of aid in question and to leave to the competent national authorities the task of calculating the precise amount of the sums to be recovered, including interest payable on those sums due (see Spain v Commission , paragraph 26, and judgment of 14 February 2008 in Case C‑419/06 Commission v Greece , paragraph 46).
59. As regards the imposition of a penalty payment, the Court has held that such a penalty is, in principle, justified only in so far as the failure to comply with an earlier judgment of the Court continues up to the time of the Court’s examination of the facts (see, to that effect, Commission v Italy , paragraphs 33, 45 and 46, and Commission v Germany , paragraph 40).
61. In order to determine whether the failure to fulfil obligations for which the defendant stands criticised continued up to the time of the Court’s examination of the facts, it is necessary to consider the measures which were adopted, according to the defendant Member State, after the period prescribed in the reasoned opinion.
66. Accordingly, the Court held in Case C‑209/00 Commission v Germany  [2002] ECR I‑11659, paragraph 32, that since there are no Community provisions on the procedure for recovery of wrongly paid amounts of aid, such financial assistance must, in principle, be recovered in accordance with the relevant procedural provisions of national law.
67. Consequently, a Member State which, pursuant to a decision of the Commission, is obliged to recover unlawful aid is thus free to choose the means of fulfilling that obligation, provided that the measures chosen do not adversely affect the scope and effectiveness of Community law (see Case C‑209/00 Commission v Germany , paragraph 34).
74. It should be pointed out, first, that, according to established case-law, in the context of proceedings under Article 228 EC, it is for the Commission to provide the Court with the information necessary to determine the extent to which a Member State has complied with a judgment declaring it to be in breach of its obligations (see Case C‑387/97 Commission  v Greece  [2000] ECR I-5047, paragraph 73).
75. Where, in such proceedings, the Commission has provided sufficient evidence to suggest that the breach of obligations complained of has persisted, it is for the Member State concerned to challenge, in a detailed manner, the substantive content of that evidence and to prove that the breach has ceased (see, to that effect, Case C‑304/02 Commission  v France , paragraph 56).
79. As regards the quality of the evidence relating to the implementation of a decision requiring the recovery of illegal aid, the Court has held that, where a Member State recovers such aid by means other than a cash payment, it must provide the Commission with all the information enabling it to establish that the means chosen constitute an appropriate means of implementing the decision (see Case C‑209/00 Commission v Germany , paragraph 40).
111. It is for the Court to assess in each case, in the light of the circumstances of the case, the financial penalties to be imposed (see Case C‑304/02 Commission  v France , paragraph 86, and Case C‑177/04 Commission  v France  [2006] ECR I‑2461, paragraph 58).
112. Accordingly, the Commission’s suggestions cannot bind the Court and merely constitute a useful point of reference. Similarly, guidelines such as those contained in the communications of the Commission are not binding on the Court but contribute to ensuring that the action brought by that institution is transparent, foreseeable and consistent with legal certainty (see Commission  v Portugal , paragraph 34).
113. As regards the imposition of a penalty payment, the Court has held that such a penalty must be decided upon according to the degree of persuasion needed in order for the Member State which has failed to comply with a judgment establishing a breach of obligations to alter its conduct and bring to an end the infringement established (see Case C‑304/02 Commission  v France , paragraph 91).
114. In exercising its discretion, it is for the Court to set the penalty payment so that it is both appropriate to the circumstances and proportionate to the infringement established and the ability to pay of the Member State concerned (see Case C‑278/01 Commission v Spain  [2003] ECR I‑14141, paragraph 41; Case C‑304/02 Commission  v France , paragraph 103, and Case C‑177/04 Commission v France , paragraph 61).
115. Accordingly, in the assessment carried out by the Court, the basic criteria which must be taken into account in order to ensure that penalty payments have coercive force and Community law is applied uniformly and effectively are, in principle, the duration of the infringement, its degree of seriousness and the ability of the Member State concerned to pay. In applying those criteria, the Court is required to have regard, in particular, to the effects of its failure to comply on public and private interests and to the urgency for the Member State concerned to fulfil its obligations (see Case C‑304/02 Commission  v France , paragraph 104; Case C-177/04 Commission v France , paragraph 62; and Commission  v Portugal , paragraph 39).
2. The duration of the infringement
116. The Court is required to determine the duration of the infringement. The duration must be assessed by reference to the time when the Court assesses the facts, not the time at which the case is brought before it by the Commission (see Case C‑177/04 Commission  v France , paragraph 71, and Commission  v Portugal , paragraph 45).
118. Attention must be drawn in this connection to the vital nature of the Treaty rules on State aid, as pointed out by the Advocate General at point 72 of his Opinion.
119. The rules governing the contested decision and the judgment in Case C‑415/03 Commission  v Greece  are the expression of one of the essential tasks with which the European Community is entrusted under Article 2 EC, namely the establishment of a common market and the promotion of a high degree of competitiveness and convergence of economic performance. That task is also referred to in Article 3(1)(g) EC, which provides that the activities of the Community are to include a system ensuring that competition in the internal market is not distorted.
120. The importance of the Community rules infringed in this case is reflected, in particular, in the fact that repayment of unlawfully paid State aid eliminates the distortion of competition caused by the competitive advantage afforded by the aid and, by repaying the aid, the recipient forfeits the advantage which it had enjoyed over its competitors on the market (see, to that effect, Case C‑350/93 Commission  v Italy  [1995] ECR I‑699, paragraph 22, and Case C‑277/00 Germany  v Commission  [2004] ECR I‑3925, paragraph 75).
123. With regard to the Commission’s suggestion of multiplying the basic amount by a specific coefficient applicable to the Hellenic Republic, the Court has ruled on numerous occasions that that method of calculation is an appropriate means of reflecting the ability to pay of the Member State concerned while keeping the variation between Member States within a reasonable range (see Commission v Greece , paragraph 88; Commission v Spain , paragraph 59; Case C‑304/02 Commission  v France , paragraph 109; and Case C‑177/04 Commission  v France , paragraph 75).
5. Conclusion
140. It should be noted, first, that the procedure laid down in Article 228(2) EC is aimed at inducing a defaulting Member State to comply with a judgment establishing a failure to fulfil obligations, thereby ensuring that Community law is in fact applied, and the measures provided for by that provision, namely a lump sum and a penalty payment, are both intended to achieve this objective (Case C‑304/02 Commission  v France , paragraph 80).
141. The Court therefore held at paragraphs 81 and 82 of that judgment that application of each of those measures depends on their respective ability to meet the objective pursued according to the circumstances of the case and, that being so, recourse to both types of penalty provided for is not precluded.
142. It is therefore for the Court, in each case, in the light of the circumstances of the case before it and the degree of persuasion and deterrence which appears to it to be required, to determine the financial penalties appropriate for making sure that the judgment which previously established the breach is complied with as swiftly as possible and preventing similar infringements of Community law from recurring (see Case C‑304/02 Commission  v France , paragraph 97, and Case C‑121/07 Commission  v France  [2008] ECR I‑0000, paragraph 59).
143. Therefore, the Court is empowered, in exercising the discretion conferred on it in the field in question, to impose a penalty payment and a lump sum payment cumulatively.
b) Whether the imposition of a lump sum payment is appropriate
144. The decision whether to impose a lump sum payment must, in each individual case, depend on all the relevant factors pertaining to both the particular nature of the infringement established and the individual conduct of the Member State involved in the procedure instigated pursuant to Article 228 EC (see Case C‑121/07 Commission  v France , paragraph 62). That provision confers a wide discretion upon the Court in deciding whether or not to impose such sanctions (see paragraph 63 of that judgment).
145. As regards the present case, the Court considers that all the legal and factual circumstances pertaining to the infringement established indicate that effective prevention of future repetition of similar infringements of Community law requires the adoption of a dissuasive measure, such as a lump sum payment (see Case C‑121/07 Commission v France , paragraph 69).
c) The amount of the lump sum payment
146. If the Court decides to impose a lump sum payment, it must do so, in exercising its discretion, in a manner that is appropriate to the circumstances and proportionate both to the breach that has been established and the ability to pay of the Member State concerned (see Commission  v Spain , paragraph 41).
147. The relevant factors to be taken into account include, in particular, factors such as how long the breach of obligations has persisted since the judgment which initially established it was delivered and the public and private interests involved (see Case C‑304/02 Commission  v France , paragraph 114, and Case C‑121/07 Commission  v France , paragraph 64).
148. The circumstances to be taken into account are, in particular, those referred to in the considerations set out at paragraphs 117 to 122 above, relating to the duration and seriousness of the infringement.