1 By an application lodged at the Court Registry on 26 February 1986, the Hellenic Republic brought an action under the first paragraph of Article 173 of the EEC Treaty for a declaration that Commission Decision 86/187/EEC of 13 November 1985 on aids granted by Greece in the form of interest rebates in respect of exports of all products with the exception of petroleum products ( Official Journal 1986, L 136, p . 61 ) was void .
2 By a document lodged at the Court Registry on 13 March 1986 the applicant applied under Article 185 of the Treaty for suspension of the operation of the contested measure . By an order of 30 April 1986 the President of the Court dismissed that application and reserved the costs .
3 It is apparent from the documents before the Court that as part of a general reorganization of the credit system undertaken by Greece in April 1983, interest rates on loans were fixed at 21.5% for industrial undertakings, 18.5% for undertakings processing agricultural products and 14% for craft industries . The rate of 10.5% for loans for exports in force prior to April 1983 was abolished . In order to offset the resultant disadvantage for Greek exporters the latter were granted an interest repayment of 6% ( or 3% in the case of loans at 14 %) provided that the reveneue from the exports was rapidly repatriated and converted into drachmas . The repayment applies to exports of all products except petroleum products .
4 The contested decision determines in substance that that aid, in the form of interest rebates of 6 or 3% granted on certain conditions by the Greek authorities in respect of loans for exports, is incompatible with the common market under the terms of Article 92 of the EEC Treaty and must be abolished .
5 In support of its application, the Hellenic Republic puts forward four submissions which relate, without distinction, to the various categories of exports .
6 Reference is made to the Report for the Hearing for a fuller account of the facts, the course of the procedure and the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court . The first submission
7 The Hellenic Republic maintains in the first place that the contested repayment of interest does not constitute a State aid . It is a purely monetary measure designed to improve the country' s balance of payments by encouraging exporters to repatriate their revenue from exports promptly . By comparison with the credit system in force prior to April 1983, the interest repayment is designed to be neutral and is confined to cancelling out the negative effects of the increase in rates for exporters, without affording them any additional advantage . Finally, in so far as the Commission did not examine the previous export credit system, it cannot criticize the new system, which merely cancels out the negative effects of the increase in rates for exporters .
8 It is undisputed that as a result of the interest rebate, the interest rates generally applicable to commercial transactions in Greece are reduced only in respect of loans for exports . The contested repayment of interest therefore constitutes an aid for Greek export undertakings in so far as they benefit from an economic advantage which reduces the expenses incurred in respect of their sales on the markets of other Member States . Regard should be had in that connection to the decision of the Court ( judgment of 10 December 1969 in Joined Cases 6 and 11/69 Commission v French Republic (( 1969 )) ECR 523 ) according to which a preferential rediscount rate for exports granted by a Member State only for exports of its own products constitutes an aid within the meaning of Article 92 .
9 As regards the argument that the repayment of interest is merely monetary in character, it is sufficient to point out that the Court has held ( Case 11/69, supra, and judgment of 9 June 1982 in Case 95/81 Commission v Italy (( 1982 )) ECR 2187 ) that the exercise by the Member States of the powers retained by them in the monetary field do not permit them unilaterally to adopt measures prohibited by the Treaty .
10 Finally, it is irrelevant that, by comparison with the previous export credit system, the repayment of interest is economically neutral in its effect on the competitiveness of Greek exports and that the Commission took no action regarding the previous system, since the present system, viewed independently from its predecessor, favours certain undertakings . It follows that the first submission must be rejected . The second submission
11 The Hellenic Republic maintains that the repayment of interest is not charged to State resources but is financed by term deposits of capital invested by the commercial banks . The Commission, on the other hand, considers that the Bank of Greece places resources at the disposal of the commercial banks in order to finance the repayments of 6 or 3% on the loans which they grant to exporters .
12 The Court has consistently held ( see in particular the judgment of 30 January 1985 in Case 290/83 Commission v French Republic (( 1985 )) ECR 439 ) that an aid need not necessarily be financed from State resources to be classified as a State aid . Article 92 covers all aid granted by States or through State resources and there is no necessity to draw any distinction according to whether the aid is granted directly by the State or by public or private bodies established or appointed by it to administer the aid .
13 In the present case it need merely be pointed out that the repayment of interest was introduced by the Hellenic Republic through the Bank of Greece which, for that purpose, acted under direct State control and that the banks reimburse the interest or send documents evidencing the purchase of foreign currency to the Bank of Greece, which then makes the payment . The second submission must therefore be rejected as unfounded . The third submission
14 According to the Hellenic Republic the Commission decision contains no proof that the repayment of interest has had any impact on trade between Member States or the competitiveness of Greek exports . The Commission should have produced specific evidence to show that Greek exports have increased as a result of the aid . In fact, Greek exports have diminished particularly in the cereals sector .
15 As the Court has already held ( judgment of 13 March 1985 in Joined Cases 296 and 318/82 Kingdom of the Netherlands and Leeuwarder Papierwarenfabriek BV v Commission (( 1982 )) ECR 809 ) the very circumstances in which the aid is granted may be sufficient to show that the aid is capable of affecting trade between Member States or of distorting or threatening to distort competition . However, the Commission must set out the circumstances in the statement of reasons for its decision .
16 In the present case, it may be concluded from the sufficiently explicit and detailed statement of reasons for the contested decision that the Commission was legally entitled to take the view that, in so far as it places Greek exporters in a more advantageous competitive position than that of other traders not benefiting from such action, the repayment of interest at issue is indeed capable of affecting trade between Member States and distorting competition . The third submission cannot therefore be upheld . The fourth submission
17 Lastly, the Greek Republic claims that in clearing the EAGGF accounts for 1983 to 1985, the Commission took the view that the repayment of interest was not of great significance, that it had only a negligible effect on trade between Member States and could not therefore be charged to the Hellenic Republic .
18 The Commission' s appraisal of the repayment of interest for the purposes of applying the rules on agriculture cannot in any circumstances affect its classification under Article 92 of the Treaty . It follows that the last submission must also be rejected .
19 Since none of the Hellenic Republic' s submissions can be upheld, the action must be dismissed in its entirety .