Action brought on 20 May 2011 — European Commission v Hellenic Republic

(Case C-244/11)

2011/C 219/13

Language of the case: Greek

Parties

Applicant: European Commission (represented by: G. Zavvos and E. Montaguti)

Defendant: Hellenic Republic

Form of order sought

Pleas in law and main arguments

The Commission submits that the requirement for prior approval of the Inter-Ministerial Privatisation Committee in order to acquire voting rights from 20 % or more of the total share capital in companies of national strategic importance, as laid down in Article 11(1), in conjunction with Article 11(2), of Law 3613/2008, restricts the free movement of capital (Article 63 of the Treaty on the Functioning of the European Union) and freedom of establishment (Article 49 of the Treaty on the Functioning of the European Union). Although those measures, as the Greek Government asserts, are non-discriminatory, they may deter economic operators from investment of their capital in companies of national strategic importance and therefore also from establishment in Greece.

The Commission further contends that Article 11(3) of Law 3613/2008 which provides for the mechanism of ex post control by the Minister for Economic Affairs and Finance in respect of certain company matters of decisive importance restricts the free movement of capital (Article 63 of the Treaty on the Functioning of the European Union) and freedom of establishment (Article 49 of the Treaty on the Functioning of the European Union), since it enables the State to render important decisions of the company invalid, on the basis of subsequent administrative grounds which are not known in advance. Therefore, the shareholders’ discretion to implement their decisions is restricted, and their actual participation in the management and control of companies of national strategic importance — and consequently also their establishment in Greece — are hindered.

The Greek Government maintains that the Law at issue is restricted to just the privatisation of six companies of national strategic importance over which the State has control. The Commission, on the other hand, considers that in principle the Law’s scope remains unclear, because neither the companies targeted nor the sectors which fall within the scope of the new system are specified in the Law, with the result that the Law remains equivocal not only as to its present but also as to its future scope and therefore does not provide the requisite legal certainty.

The Greek Government submits that the sole aim of the Law is to safeguard the public interest and to ensure that services are provided and networks operate continuously and smoothly. However, the Commission submits that the aim of the Law is, additionally, to safeguard the ability of the State to choose a strategic investor for companies of national strategic importance, to improve their competitiveness, and to ensure privatisation of companies of strategic importance for the national economy under transparent conditions. The Commission observes that, even if the provisions in question can be justified on the basis of reasons in the public interest, contrary to the case-law of the Court of Justice according to which systems of approval ‘must be based on objective, non-discriminatory criteria which are known in advance to the undertakings concerned, and all persons affected by a restrictive measure of that type must have a legal remedy available to them’, (1) the criteria which they lay down for the grant of approval are inappropriate for achieving the objective that is referred to in the Law. The privatisation criteria (conferral of prior approval but also ex post control with the possibility of annulment of the company’s decisions) which the provisions in question lay down are not clear, objective and precisely defined in the Law, and they do not have any relationship with the objectives pursued by the Law whilst they confer a broad discretion on the authorities, resulting in the subsequent imposition of additional restrictions on the privatisation of companies of national strategic importance, in the possible selective restriction of access of investors to privatised companies and market sectors, and in inability of the judicial authorities to review the way in which the administrative authorities have exercised the powers conferred upon them by the Law.

The Commission submits that the Hellenic Republic has not put forward sufficient explanation or arguments to justify enactment of the foregoing restrictions and therefore Article 11(1), in conjunction with Article 11(2), and Article 11(3) of Law 3631/2008, in laying down, respectively, the system of prior approval and the system of ex post control, infringe Articles 63 and 49 of the Treaty on the Functioning of the European Union.

(1)  See Case C-205/99 Analir and Others, paragraph 38; Case C-380/05 Centro Europa 7, paragraph 116; Case C-367/98 Commission v Portugal, paragraph 50; Case C-483/99 Commission v France, paragraph 46; and Case C-463/00 Commission v Spain, paragraph 69.