Holland Malt BV v European Commission.
Date: 2010-12-02
46. As is apparent from settled case-law, in the application of Article 87(3) EC the Commission enjoys wide discretion, the exercise of which involves complex economic and social assessments which must be made in a Community context (see Joined Cases C‑75/05 P and C‑80/05 P Germany and Others  v Kronofrance  [2008] ECR I‑6619, paragraph 59 and the case-law cited). In adopting rules of conduct and announcing by publishing them that they will apply to the cases to which they relate, the Commission imposes a limit on the exercise of its aforementioned discretion and cannot depart from those rules under pain of being found, where appropriate, to be in breach of general principles of law, such as equal treatment or the protection of legitimate expectations (see Germany and Others  v Kronofrance , paragraph 60 and the case-law cited).
47. Therefore, according to that case-law, in the specific area of State aid, the Commission is bound by the guidelines and notices that it issues, to the extent that they do not depart from the rules in the Treaty (see Case C‑288/96 Germany  v Commission  [2000] ECR I‑8237, paragraph 62, and Germany and Others  v Kronofrance , paragraph 61).
49. Next, the fact that aid also has beneficial effects for the region or the economic sector concerned does not necessarily imply that it must be considered to be compatible with the common market. It follows from Article 87(3)(c) EC that, where an aid measure affects trading conditions to an extent contrary to the common interest, it cannot be declared compatible with the common market, irrespective of its possible beneficial effects. However, when assessing the effects on trade, the Commission must take into consideration all the characteristics of the measure and the market concerned (see Case 47/69 France  v Commission  [1970] ECR 487, paragraphs 7 to 9).
50. There is no ground for concluding that that interpretation of primary law should not also apply to aid in the agricultural sector. It follows from the first paragraph of Article 36 EC, which acknowledges that the common agricultural policy takes precedence over the objectives of the Treaty in the field of competition, that any application in this field of the Treaty provisions is subject to account being taken of the objectives set out in Article 33 EC, namely those of the common agricultural policy (see Case C‑311/94 IJssel-Vliet [1996] ECR I‑5023, paragraph 31).
51. Therefore, when assessing the compatibility of State aid granted in that sector, the Commission must take account of the requirements of that policy, which correspond to those of the common market as a whole (see, to that effect, IJssel‑Vliet , paragraph 33). Among those requirements is the control of production. Thus, in particular, in the field of Community financial aid, Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain Regulations (OJ 1999 L 160, p. 80), prohibits, in Article 6, the grant of aid to investment which has as its objective an increase in production of products for which no normal market outlets can be found.
56. In particular, the fact put forward by Holland Malt that the malt market does not have considerable overcapacity like the market at issue in Deufil  v Commission  does not mean that the Commission should have declined to apply point 4.2.5 of the Guidelines. It follows from that point that, with regard to the processing of agricultural products sector, an aid measure which involves even a minor increase in production is, by reason of the characteristics of that economic sector and the constraints of the agricultural policy, considered to be incompatible with the common market. Consequently, the judgment under appeal is not based on an incorrect assessment of the applicable rules as interpreted by the Court in Deufil  v Commission .