French Republic v Commission of the European Communities.
Date: 2002-12-12
30.  First of all, while the procedure provided for in Articles 87 EC and 88 EC leaves a wide discretion to the Commission, and under certain conditions to the Council, in coming to a decision on the compatibility of a system of State aid with the requirements of the common market, it is clear from the general scheme of the Treaty that that procedure must never produce a result which is contrary to the specific provisions of the Treaty (see, in particular, Case C-225/91   Matra   v   Commission   [1993] ECR I-3203, paragraph 41).
31.  Also, where there is a regulation on the common organisation of the market in a given area, the Member States are under an obligation to refrain from taking any measures which might undermine or create exceptions to it (Case C-1/96   Compassion in World Farming   [1998] ECR I-1251, paragraph 41, and Case C-507/99   Denkavit   [2002] ECR I-169, paragraph 32).
32.  It follows that the Commission's assessment of State aid in a sector where common organisation of the market has been established involves examining the effect which such aid may have on the operation of that common organisation. In other words, as the Court has held, recourse by a Member State to the provisions of Articles 87 EC, 88 EC and 89 EC cannot receive priority over the provisions of the regulation on the common organisation of the market concerned (McCarren  , cited above, paragraph 11).
33.  Furthermore, as is clear from the Court's case-law, Article 36 EC recognises the priority of the common agricultural policy over the objectives of the Treaty in the field of competition (Case C-280/93   Germany   v   Council   [1994] ECR I-4973, paragraph 61).
37.  In addition, since cognac is a potable spirit obtained from wine, it is excluded from the category of agricultural products (Case 123/83   Clair   [1985] ECR 391, paragraph 15) and, consequently, is not among the products regulated under the common organisation of the market in wine.
41.  In this connection it should be remembered, first, that the Commission, for the purposes of applying Article 87(3) EC, enjoys a wide discretion, the exercise of which involves assessments of an economic and social nature which must be made within a Community context (see,   inter alia  , Case C-156/98   Germany   v   Commission   [2000] ECR I-6857, paragraph 67, and Case C-310/99   Italy   v   Commission   [2002] ECR I-2289, paragraph 45), and second, that the Court, in reviewing whether that freedom was lawfully exercised, cannot substitute its own assessment for that of the competent authority but must restrict itself to examining whether the authority's assessment is vitiated by a manifest error or misuse of powers (see Case C-288/96   Germany   v   Commission   [2000] ECR I-8237, paragraph 26, and   Italy   v   Commission  , cited above, paragraph 46).
49.  In those circumstances, and given that the statement of reasons for the contested decision discloses in a clear and unequivocal fashion the reasoning followed by the Commission in such a way 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, that statement of reasons complies with the requirements established by the Court's case-law (see, in particular, Case C-17/99   France   v   Commission   [2001] ECR I-2481, paragraph 35, and   Italy   v   Commission  , cited above, paragraph 48).