Keywords
Summary

Keywords

1 State aid - Prohibition - Derogations - Aid which may be considered to be compatible with the common market - Aid to promote the development of particular areas - Discretion of the Commission - Reference to the Community context

(EC Treaty, Art. 92(3)(a) and (c))

2 State aid - Examination by the Commission - Framework for aid in certain steel sectors not covered by the ECSC Treaty - Obligation to give notification - Exception - Aid granted under an existing general regional scheme authorized by the Commission - Scope

(EC Treaty, Art. 93(3); Commission Communication 88/C 320/03)

3 State aid - Commission decision finding aid to be incompatible with the common market - Power of assessment of the Commission - Review by the Court - Limits

(EC Treaty, Art. 92)

4 State aid - Recovery of unlawful aid - Breach of the principle of proportionality - None

(EC Treaty, Art. 93(2), first subpara.)

5 State aid - Recovery of unlawful aid - Aid granted in breach of the procedural rules in Article 93 of the Treaty - Possibility of legitimate expectation on the part of recipients - Protection - Conditions and limits

(EC Treaty, Arts 92 and 93(2), first subpara.)

Summary

6 The difference in wording between Article 92(3)(a) and Article 92(3)(c) of the Treaty cannot lead to the conclusion that the Commission should take no account of the Community interest when applying Article 92(3)(a) and that it must confine itself to verifying the regional specificity of the measures involved, without assessing their impact on the relevant market or markets in the Community as a whole.

Article 92(3) of the Treaty gives the Commission a discretion the exercise of which involves economic and social assessments which must be made in a Community context. The Commission does not exceed its powers of appraisal where, pursuing the policy which it intends to apply with respect to regional aid schemes, it declares an aid of that kind incompatible with the common market by reason of the overcapacity existing in the sector of activity concerned. Reference to such a criterion avoids encouraging the achievement of economically precarious initiatives which, because they do no more than aggravate the imbalances affecting the markets concerned, are ultimately not suited to provide an effective and lasting solution to development problems in the areas concerned.

7 State aid which concerns a steel sector such as foundries, even if it could be linked to national rules subsequently authorized as a general regional aid scheme by the Commission, cannot in any event be regarded as having been granted under an existing general regional scheme authorized by the Commission and thus qualifying for the exception to the obligation to give prior notification provided for in the framework laid down by the Commission for aid to certain steel sectors not covered by the ECSC Treaty.

8 Where the Commission enjoys a significant freedom of assessment, as is the case when it is applying Article 92 of the Treaty, the Community judicature, when examining the lawfulness of the exercise of such freedom, cannot substitute its own assessment of the matter for that of the competent authority but must restrict itself to examining whether that assessment contains a manifest error or constitutes a misuse of power.

9 Abolishing unlawful aid by means of recovery is the logical consequence of a finding that it is unlawful. Consequently, the recovery of State aid unlawfully granted, for the purpose of restoring the previously existing situation, cannot in principle be regarded as disproportionate to the objectives of the Treaty in regard to State aids. The same applies to the charging of interest in respect of the period between the payment of the aid and its actual repayment.

10 A Member State whose authorities have granted aid contrary to the procedural rules laid down in Article 93 of the Treaty may not rely on the legitimate expectations of the recipient undertaking in order to justify a failure to comply with the obligation to take the steps necessary to implement a Commission decision instructing it to recover the aid. If it could do so, Articles 92 and 93 of the Treaty would be set at naught, since national authorities would thus be able to rely on their own unlawful conduct in order to deprive of their effectiveness decisions taken by the Commission under those provisions.

Furthermore, in view of the mandatory nature of the supervision of State aid by the Commission under Article 93 of the Treaty, undertakings to which an aid has been granted cannot, in principle, entertain a legitimate expectation that the aid is lawful unless it has been granted in compliance with the procedure laid down in that article. A diligent operator should normally be able to determine whether that procedure has been followed.

Where, contrary to the obligations imposed on the Member States by Article 93(3) of the Treaty, aid has been granted without prior notification, the fact that the Commission initially decided not to raise any objections to the aid in issue cannot be regarded as capable of having caused the recipient undertaking to entertain any legitimate expectation if that decision has been challenged in due time before the Court, which has annulled it. However regrettable it may be, the Commission's error cannot erase the consequences of the unlawful conduct of the Member State in question.