Keywords
Summary

Keywords

1 State aid - Concept - Grant to certain undertakings of increased reductions in social security contributions - Covered - Measures of a social character - Irrelevant

(EC Treaty, Art. 92(1) (now, after amendment, Art. 87(1) EC))

2 State aid - Concept - Specificity of the State measure - Partial reduction of financial charges - Covered

(EC Treaty, Art. 92(1) (now, after amendment, Art. 87(1) EC))

3 State aid - Affecting trade between Member States - Prejudicial to competition - Criteria of assessment

(EC Treaty, Art. 92 (now, after amendment, Art. 87 EC))

4 State aid - Commission decision finding that a particular grant of aid is incompatible with the common market and ordering its abolition - Resulting obligation to recover - To restore the previous legal situation

(EC Treaty, Art. 92 (now, after amendment, Art. 87 EC))

5 State aid - Planned aid - Not notified - Implemented before the Commission's final decision - Whether the Commission is under an obligation to use its power to require payment of the aid to be suspended - No such obligation

(EC Treaty, Art. 93(3) (now Art. 88(3) EC))

6 State aid - Planned aid - Implemented before the Commission's final decision - Commission decision ordering recovery of the aid - Obligation to state reasons - Scope

(EC Treaty, Art. 93(3) (now Art. 88(3) EC))

7 State aid - Commission decision finding that a particular grant of aid is incompatible with the common market - Lawfulness - Conditions - Absolute impossibility of implementation - Impossibility evident at the implementation stage - No effect - Impossibility evident at the adoption stage - Unlawful

(EC Treaty, Art. 173 (now, after amendment, Art. 230 EC))

Summary

1 State aid, within the meaning of Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC), covers measures which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which, without therefore being subsidies in the strict sense, are similar in character and have the same effect. A system under which certain undertakings are accorded the advantage of increased reductions in social security contributions relieves them of some of their costs and confers on them financial advantages which improve their competitive position. The social character of such State measures is not sufficient to exclude them outright from classification as aid for the purposes of Article 92 of the Treaty. Article 92(1) of the Treaty does not distinguish between measures of State intervention by reference to their causes or their aims but defines them in relation to their effects.

2 The specificity of a measure adopted by the State - that is to say, its selective character - constitutes one of the characteristics of the concept of State aid. A measure designed to give undertakings in a particular industrial sector a partial reduction of the financial charges arising from the normal application of the general social security system, without there being any justification for this exemption on the basis of the nature or general scheme of this system, must be regarded as aid.

Even when a Member State states that it intends ultimately to extend to its entire economy, and thereby generalise, measures initially restricted to certain sectors of activity, that intention cannot be taken into account for avoiding application of Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC) since such measures must be assessed solely in relation to their effects.

The opposite approach would enable the Member State concerned to escape application of the Community rules in this area simply by declaring its intention to generalise the contested measure in the future. The same applies where the Member State concerned can produce evidence of a first stage towards generalisation of the measure under consideration.

3 When State aid strengthens the position of an undertaking compared with other undertakings competing in intra-Community trade, the latter must be regarded as affected by the aid, even if the beneficiary undertaking is itself not involved in exporting. Where a Member State grants aid to an undertaking, domestic production may for that reason be maintained or increased, with the result that undertakings established in other Member States have less chance of exporting their products to the market in that Member State.

4 The removal of unlawful State aid by means of recovery is the logical consequence of a finding that it is unlawful. The sole purpose of obliging the State concerned to recover the aid is to restore the previous legal situation. Accordingly, recovery cannot in principle be regarded as a penalty.

Furthermore, the recovery of State aid unlawfully granted cannot in principle be regarded as disproportionate to the objectives of the provisions of the Treaty on State aid.

5 When the Commission finds that aid has been introduced without being notified, it has the power, after giving the Member State in question the opportunity to submit its comments on the matter, to issue an interim decision requiring it to suspend immediately the payment of the aid pending the outcome of the examination of the aid. That does not mean, however, that the Commission is obliged to require automatically the Member State concerned to suspend payment of the aid in question. The opposite outcome would render nugatory the legal obligation imposed on the Member State by Article 93(3) of the Treaty (now Article 88(3) EC) not to implement planned aid before the Commission's final decision and would have the consequence of reversing the roles of the Member States and the Commission.

6 In the matter of State aid, where, contrary to the provisions of Article 93(3) of the Treaty (now Article 88(3) EC), the proposed aid has already been granted, the Commission, which has the power to require the national authorities to order its repayment, is not obliged to provide specific reasons in order to justify the exercise of that power.

7 The absolute impossibility of implementing a Commission decision ordering the abolition of unlawful State aid does not invalidate that decision where it becomes apparent only at the stage of implementation. Any procedural or other difficulties in regard to the implementation of the contested measure cannot have any influence on its lawfulness. However, the Commission may not impose - by a decision which would then be invalid - an obligation whose implementation would, from the beginning, be impossible in objective and absolute terms.