Keywords
Summary

Keywords

1. State aid - Affecting trade between Member States - Prejudicial to competition - Criteria of assessment - Modest amount of aid - Significance

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

2. State aid - Affecting trade between Member States - Prejudicial to competition - Criteria of assessment - Recipient undertaking not itself engaged in exporting

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

3. State aid - Prohibition - Derogations - Aid which may be regarded as compatible with the common market - Discretion of the Commission - Reference to the Community context - Judicial review - Limits

(EC Treaty, Art. 92(3)(c) (now, after amendment, Art. 87(3)(c) EC))

4. State aid - Existing aid and new aid - Aid instituted prior to the liberalisation of a market initially closed to competition - Classification as existing aid

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

5. State aid - Existing aid - Commission decision finding that a particular grant of aid is incompatible with the common market - Limitation of the effects in time

(EC Treaty, Art. 93(1) and (2) (now Art. 88(1) and (2) EC))

6. State aid - Recovery of unlawful aid - Breach of the principle of proportionality - None

(EC Treaty, Art. 93(2), first subpara. (now Art. 88(2), first subpara., EC))

7. State aid - Recovery of unlawful aid - Aid granted in breach of the procedure under Article 93 of the Treaty (now Article 88 EC) - Legitimate expectations - Exceptional circumstances - None

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

Summary

1. Even aid of a relatively small amount is liable to affect trade between Member States where there is strong competition in the sector in which the recipient operates. Moreover, because of the structure of the market, a feature of which is the presence of a large number of small-scale undertakings in the road haulage sector, even relatively modest aid is liable to strengthen the position of the recipient undertaking as compared with its competitors in intra-Community trade. In that context, the effects on competition and trade of a relatively small amount of aid may not therefore be negligible. It follows that such aid cannot be regarded as of little importance.

( see paras 44, 46 )

2. Aid may be of such a nature as to affect trade between Member States and to distort competition even if the recipient undertaking that is competing with producers from other Member States does not itself export. A situation of this kind may also arise when there is no excess capacity in the particular sector. 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.

( see para. 51 )

3. Economic assessments made when applying Article 92(3)(c) of the Treaty (now, after amendment, Article 87(3)(c) EC) must be conducted in a Community context, which means that the Commission is under an obligation to examine the impact of the aid on competition and intra-Community trade. It is for the Commission, during that examination, to weigh the beneficial effects of the aid against its adverse effects on trading conditions and the maintenance of undistorted competition. Article 92(3) of the Treaty confers on the Commission a wide discretion to allow aid by way of derogation from the principle in Article 92(1) that State aid is incompatible with the common market. The Commission's examination entails consideration and appreciation of complex economic facts and conditions. Since the Community judicature cannot substitute its own assessment of the facts, especially in the economic field, for that of the originator of such a decision, the Court must confine itself to checking that the rules on procedure and the statement of reasons have been complied with, that the facts are materially accurate and that there has been no manifest error of assessment or misuse of powers.

( see paras 73-74 )

4. A system of aid established in a market that was initially closed to competition must, when that market is liberalised, be regarded as an existing aid system, in so far as at the time of its establishment it did not come within the scope of Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC), which applies only to sectors open to competition.

( see para. 89 )

5. Existing aid for the purposes of Article 93(1) and (2) of the Treaty (now Article 88(1) and (2) EC) can be the subject, if at all, only of a decision by the Commission finding it incompatible as to the future.

( see para. 91 )

6. Since the elimination of an illegal aid through recovery of the amount of aid disbursed plus interest is the logical consequence of a finding that the aid is incompatible with the common market and is aimed solely at restoring the previously existing competitive situation, that obligation cannot in principle be disproportionate to the objectives of Article 92 of the Treaty (now, after amendment, Article 87 EC) and Articles 93 and 94 of the Treaty (now Articles 88 EC and 89 EC).

( see para. 105 )

7. Only exceptional circumstances can validly be the foundation for recipients' expectations as to the lawfulness of that aid. Furthermore, recognition of such legitimate expectations presupposes in principle that the aid has been granted in compliance with the procedure laid down by Article 93 of the Treaty (now Article 88 EC). A diligent economic operator should normally be able to determine whether that procedure has been complied with.

( see para. 107 )