Eric Libert and Others v Gouvernement flamand (C‑197/11) and All Projects & Developments NV and Others v Vlaamse Regering (C‑203/11).
Date: 2013-05-08
33. In that regard, it is settled case-law that the Treaty rules governing freedom of movement for persons and the measures adopted to implement them cannot be applied to activities which have no factor linking them with any of the situations governed by EU law and which are confined in all relevant respects within a single Member State (see Case C‑212/06 Government of the French Community and Walloon Government  [2008] ECR I‑1683, paragraph 33, and Case C‑434/09 McCarthy  [2011] ECR I‑3375, paragraph 45).
34. It is common ground that the applicants in the main proceedings are Belgian nationals and that all aspects of the main proceedings are confined within one Member State. However, it is by no means inconceivable that individuals or undertakings established in Member States other than the Kingdom of Belgium have been or are interested in purchasing or leasing immovable property located in the target communes and are thus affected by the provisions of the Flemish Decree in question (see, to that effect, Case C‑-470/11 Garkalns  [2012] ECR I‑0000, paragraph 21 and the case-law cited).
35. Moreover, as the Advocate General has noted in point 23 of his Opinion, the referring court has made a request for a preliminary ruling to the Court specifically in proceedings for the annulment of those provisions, which apply not only to Belgian nationals but also to nationals of other Member States. Consequently, the decision of the referring court that will be adopted pursuant to the present judgment will also have effects on the nationals of other Member States.
38. It should be borne in mind, first, that Article 21 TFEU and, in their respective areas, Articles 45 TFEU and 49 TFEU, and Articles 22 and 24 of Directive 2004/38, prohibit national measures which preclude or deter a national of a Member State from leaving his country of origin in order to exercise his right to freedom of movement within the European Union. Such measures, even if they apply without regard to the nationality of the individuals concerned, constitute restrictions on the fundamental freedoms guaranteed by those articles (see, to that effect, Case C‑152/05 Commission  v Germany  [2008] ECR I‑39, paragraphs 21 and 22; Case C‑253/09 Commission  v Hungary  [2011] ECR I‑0000, paragraphs 46, 47 and 86; and Case C‑46/12 L.N.  [2013] ECR I‑0000, paragraph 28).
44. Lastly, with regard to the free movement of capital, it should be borne in mind that the measures prohibited by Article 63(1) TFEU, as restrictions on the movement of capital, include those which are likely to discourage residents of one Member State from making investments in immovable property in other Member States (see Case C‑567/07 Woningstichting Sint Servatius  [2009] ECR I‑9021, paragraph 21).
45. That is the case, in particular, of national measures which make investments in immovable property conditional upon a prior authorisation procedure and thus restrict, by their very purpose, the free movement of capital (see Woningstichting Sint Servatius , paragraph 22 and the case-law cited).
49. It should be borne in mind that, according to well-established case-law, national measures which are liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the FEU Treaty may nevertheless be allowed provided that they pursue an objective in the public interest, are appropriate for attaining that objective and do not go beyond what is necessary to attain the objective pursued (see, inter alia, Woningstichting Sint Servatius , paragraph 25, and Commission  v Hungary , paragraph 69).
52. In that regard, it must be noted that such requirements relating to social housing policy in a Member State can constitute overriding reasons in the public interest and therefore justify restrictions such as those established by the Flemish Decree (see Woningstichting Sint Servatius , paragraphs 29 and 30, and Case C‑400/08 Commission  v Spain  [2011] ECR I‑1915, paragraph 74).
57. Lastly, it should be recalled, so far as concerns the third condition referred to in paragraph 54 above, requiring that the prospective buyer or tenant has a professional, family, social or economic connection with the commune in question as a result of a significant circumstance of long duration, that a prior administrative authorisation procedure cannot render legitimate discretionary conduct on the part of the national authorities which is liable to negate the effectiveness of provisions of EU law, in particular those relating to a fundamental freedom. Thus, if such a procedure is to be justified even though it derogates from a fundamental freedom, it must be based on objective, non‑discriminatory criteria known in advance, in such a way as adequately to circumscribe the exercise of the national authorities’ discretion (see, inter alia, Woningstichting Sint Servatius , paragraph 35 and the case-law cited).
62. In order to reply to these questions, it should be observed as a preliminary point that, while that legislation may be within the ambit of the three fundamental freedoms alluded to by the referring court, the fact remains, as the Advocate General has noted in point 68 of his Opinion, that the restriction of the freedom of establishment and the freedom to provide services is, in the case in the main proceedings, an inevitable consequence of the restriction of the free movement of capital and, therefore, does not justify an independent examination of that legislation in the light of Articles 49 TFEU and 56 TFEU (see, to that effect, Case C‑182/08 Glaxo Wellcome  [2009] ECR I‑8591, paragraph 51 and the case-law cited).
64. In accordance with settled case-law, the measures prohibited by Article 63(1) TFEU include those which are likely to discourage residents of one Member State from making investments in immovable property in other Member States. That is the case, in particular, of national measures which make investments in immovable property conditional upon a prior authorisation procedure and thus restrict, by their very purpose, the free movement of capital (see Woningstichting Sint Servatius , paragraphs 21 and 22).
73. In order to answer the first question in Case C‑203/11, it is necessary to provide the referring court with guidance on interpretation in order to enable it to determine whether the measures described in paragraphs 71 and 72 above may be classified as State aid in accordance with Article 107(1) TFEU (Case C‑140/09 Fallimento Traghetti del Mediterraneo  [2010] ECR I‑5243, paragraphs 23 and 24).
74. It is settled case-law that classification as State aid requires all the conditions set out in Article 107(1) TFEU to be fulfilled. First, there must be intervention by the State or through State resources. Second, the intervention must be liable to affect trade between Member States. Third, it must confer an advantage on the recipient. Fourth, it must distort or threaten to distort competition ( Fallimento Traghetti del Mediterrane , paragraph 31 and the case-law cited, and Case C‑417/10 3M Italia  [2012] ECR I‑0000, paragraph 37).
76. So far as concerns the second condition, it should be borne in mind that for the purpose of categorising a national measure as State aid, it is necessary, not to establish that the aid has a real effect on trade between Member States and that competition is actually being distorted, but only to examine whether that aid is liable to affect such trade and distort competition (Case C‑148/04 Unicredito Italiano  [2005] ECR I‑11137, paragraph 54, and Case C‑222/04 Cassa di Risparmio di Firenze and Others [2006] ECR I‑289, paragraph 140).
77. In particular, when aid granted by a Member State strengthens the position of an undertaking compared with other undertakings competing in intra‑Community trade, the latter must be re garded as affected by that aid (see, inter alia, Unicredito Italiano , paragraph 56 and the case-law cited, and Cassa di Risparmio di Firenze and Others , paragraph 141).
78. In that regard, it is not necessary that the beneficiary undertaking itself be involved in intra‑Community trade. Where a Member State grants aid to an undertaking, internal activity may be maintained or increased as a result, so that the opportunities for undertakings established in other Member States to penetrate the market in that Member State are thereby reduced. Furthermore, the strengthening of an undertaking which, until then, was not involved in intra‑Community trade may place that undertaking in a position which enables it to penetrate the market of another Member State ( Unicredito Italiano , paragraph 58, and Cassa di Risparmio di Firenze and Others , paragraph 143).
80. It should also be borne in mind that the Court has previously held that a national measure by which the public authorities grant certain undertakings a tax exemption which, although it does not involve a transfer of State resources, places those to whom it applies in a more favourable financial position than other taxpayers constitutes State aid within the meaning of Article 107(1) TFEU (see Joined Cases C‑393/04 and C‑41/05 Air Liquide Industries Belgium  [2006] ECR I‑5293, paragraph 30 and the case-law cited).
81. It should however be noted that, in accordance with recital 8 in the preamble to, and Article 2 of, Commission Regulation (EC) No 1998/2006 of 15 December 2006 on the application of Articles [87 EC and 88 EC] to de minimis  aid (OJ 2007 L 139, p. 5), aid not exceeding a ceiling of EUR 200 000 over any period of three years is deemed not to affect trade between Member States and not to distort or threaten to distort competition. Such measures are excluded from the concept of State aid and are thus exempt from the notification requirement of Article 108(3) TFEU.
83. So far as concerns the third condition referred to in paragraph 74 above, relating to the beneficial nature of the measures in question, it must be observed that measures which, whatever their form, are likely directly or indirectly to favour certain undertakings or are to be regarded as an economic advantage which the recipient undertaking would not have obtained under normal market conditions are regarded as aid (see, inter alia, Case C‑451/03 Servizi Ausiliari Dottori Commercialisti [2006] ECR I‑2941, paragraph 59).
84. By contrast, where a State measure must be regarded as compensation for the services provided by the recipient undertakings in order to discharge public service obligations, so that those undertakings do not enjoy a real financial advantage and the measure thus does not have the effect of putting them in a more favourable competitive position than the undertakings competing with them, such a measure is not caught by Article 107(1) TFEU (Case C‑280/00 Altmark Trans and Regierungspräsidium Magdeburg  [2003] ECR I‑7747, paragraph 87).
85. However, for such compensation to escape classification as State aid in a particular case, a number of conditions must be satisfied ( Altmark Trans and Regierungspräsidium Magdeburg , paragraph 88).
87. As regards the conditions that must be satisfied for the measures in question to escape classification as State aid, it should be borne in mind that, first, the undertaking receiving such compensation must actually have public service obligations to discharge, and the obligations must be clearly defined ( Altmark Trans and Regierungspräsidium Magdeburg , paragraph 89).
88. In that regard, on account in particular of the wide discretion enjoyed by the Member States, it is not inconceivable that the social obligation may be regarded as a ‘public service’. In that context, the fact, alluded to by the referring court, that the social obligation does not directly benefit individuals – the applicants for social housing – but rather the social housing companies, is irrelevant with regard to the classification of the service in question.
89. Second, the parameters on the basis of which the compensation is calculated must be established in advance in an objective and transparent manner, to avoid it conferring an economic advantage which may favour the recipient undertaking over competing undertakings ( Altmark Trans and Regierungspräsidium Magdeburg , paragraph 90).
91. Third, the compensation paid cannot exceed what is necessary to cover all or part of the costs incurred in the discharge of public service obligations, taking into account the relevant receipts and a reasonable profit for discharging those obligations ( Altmark Trans and Regierungspräsidium Magdeburg , paragraph 92).
92. Fourth, the compensation must be determined on the basis of an analysis of the costs which a typical undertaking, well run and adequately provided with the requisite means so as to be able to meet the necessary public service requirements, would have incurred in discharging those obligations, taking into account the relevant receipts and a reasonable profit for discharging the obligations ( Altmark Trans and Regierungspräsidium Magdeburg , paragraph 93).
94. However, even if the Court had before it the information necessary to enable it to make such an appraisal, which is not the case here, it must be recalled that the Court has no jurisdiction to give a ruling on the facts in an individual case or to apply the rules of EU law which it has interpreted to national measures or situations, since those questions are matters for the exclusive jurisdiction of the national court (see Servizi Ausiliari Dottori Commercialisti , paragraph 69 and the case-law cited).
102. The answer to the first question in Case C‑203/11 is therefore that the tax incentives and subsidy mechanisms provided for in the Flemish Decree are liable to be classified as State aid within the meaning of Article 107(1) TFEU. It is for the referring court to determine whether the conditions relating to the existence of State aid are met and, if so, to ascertain whether, as regards the measures established in Book 4 of the Flemish Decree whereby compensation is provided for the social obligation to which subdividers and developers are subject, the SGEI Decision is nevertheless applicable to such measures.
The third to eighth questions in Case C‑203/11
103. By these questions, the referring court asks, in essence, whether Directive 2006/123 is applicable in circumstances such as those in the main proceedings and, if so, it asks the Court to interpret several provisions of that directive.
104. In order to reply to these questions, it should be noted that, as stated in recital 9 to Directive 2006/123, that directive does not apply to, inter alia, ‘requirements, such as … rules concerning the development or use of land, town and country planning, building standards…’.
105. In addition, under Article 2(2)(j) of Directive 2006/123, that directive does not apply to services relating to social housing or to persons permanently or temporarily in need which are provided by the State or by providers mandated by the State.
106. As stated in paragraphs 50 and 51 above, the objectives of the Flemish Decree relate to land planning and social housing.
107. In those circumstances, the Court finds that Directive 2006/123 is not applicable to legislation such as the Flemish Decree and that, consequently, there is no need to answer the third to eighth questions referred in Case C‑203/11.
The eleventh question in Case C‑203/11
113. Where such an agreement has been concluded, the fact that the development of social housing units is a requirement imposed directly by national legislation and that the party contracting with the authorities is necessarily the owner of the building land in question does not preclude the existence of a contractual relationship between the authorities and the developer in question (see, to that effect, Case C‑399/98 Ordine degli Architetti and Others [2001] ECR I‑5409, paragraphs 69 and 71).
117. The first type of contracts are those concluded by a public entity with a person who is legally distinct from that entity where, at the same time, that entity exercises over the person concerned a control which is similar to that which it exercises over its own departments and where that person carries out the essential part of its activities with the entity or entities which control it (see Case C‑159/11 Ordine degli Ingegneri della Provincia di Lecce and Others [2012] ECR I‑0000, paragraph 32 and the case-law cited).