Keywords
Summary

Keywords

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1. State aid ° Prohibition ° Derogations ° Shipbuilding aid ° Directive 87/167 ° Scope ° Direct and indirect aid

(Council Directive 87/167, Arts 3(2) and 4(4))

2. State aid ° Examination by the Commission ° Assessment under Article 92 of the Treaty ° Procedure under Article 93(2) ° Recourse to the procedure under Article 169 ° Not permissible

(EEC Treaty, Arts 93(2) and 169)

3. State aid ° Prohibition ° Derogations ° Shipbuilding aid ° Directive 87/167 ° Criteria for derogation ° Compliance with a common maximum ceiling ° Incompatibility with the common market of any aid exceeding the ceiling fixed ° Commission' s role ° Verification of compliance with the ceiling

(Council Directive 87/167, Art. 4(1))

Summary

1. It is clear from Articles 3(2) and 4(4) of Directive 87/167 on aid to shipbuilding that that directive introduced a coherent system which takes into consideration, for the determination of the amount of aid granted when a ship is built, not only direct aid but also the indirect aid which the State may grant to its shipbuilding industry.

2. Where it is a question whether aid granted by States is incompatible with the common market, even a law which provides for such aid must be assessed under the procedure laid down in Article 93(2) of the Treaty and not under the procedure laid down in Article 169.

3. Since the Council first noted that State aid to shipbuilding was incompatible with the Treaty and then took into account a series of economic and social requirements which caused it to make use of its power under the Treaty to consider such aid nevertheless compatible with the common market, provided that it complied with the criteria for derogation contained in Directive 87/167, and since, as regards production aid for shipbuilding and ship conversion, the Council chose the criterion of not exceeding the common maximum ceiling provided for in Article 4(1) of the directive, that ceiling constitutes what the Council regarded as the balance between the conflicting requirements of respect for the rules of the common market and the maintenance of a sufficient level of activity in European shipyards, which is a condition for the survival of an efficient and competitive European shipbuilding industry.

Consequently, compliance with that ceiling is the essential condition for aid to shipbuilding to be regarded as compatible with the common market and, where that ceiling is exceeded, the aid in question is automatically incompatible therewith. In such a context the Commission' s role is limited to checking that that condition has been observed.