Keywords
Summary

Keywords

1. State aid - Investigation by the Commission - Commission's discretion - Possibility of adopting guidelines - Judicial review - Scope

(Art. 87(2) and (3) EC)

2. State aid - Prohibition - Derogations - Aid which may be considered to be compatible with the common market - Aid to promote the development of particular areas - Exceptional cases

(Art. 87(3)(a) EC)

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

(Art. 87 EC)

4. State aid - Commission decision finding a particular aid programme incompatible with the common market - Obligation to state reasons - Necessary indications

(Arts 87 EC and 253 EC)

5. State aid - Commission decision finding a particular grant of aid incompatible with the common market and ordering its abolition - Resulting obligation to recover - To restore the previous situation - Commission's discretion - No repayment - Grounds - Exceptional circumstances - Mechanism of employment law - Exclusion

(Art. 88(2), first subpara., 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

(Art. 88(3) EC)

Summary

1. The conditions with which aid granted by a State must comply in order to be compatible with the common market are spelled out in the exceptions laid down in Article 87(2) and (3) EC. In that connection, the Commission may adopt a policy as to how it will exercise its discretion in the form of measures such as guidelines, in so far as those measures contain rules indicating the approach which the institution is to take and do not depart from the rules of the Treaty. It follows that, although those rules, setting out the approach which the Commission proposes to follow, certainly help to ensure that it acts in a manner which is transparent, foreseeable and consistent with legal certainty, they cannot bind the Court. However, they may form a useful point of reference.

( see para. 52 )

2. Use of the terms abnormally and serious in the exception laid down in Article 87(3)(a) EC shows that it concerns only areas where the economic situation is extremely unfavourable in relation to the Community as a whole.

It follows that aid to maintain employment, which is comparable to operating aid, is as a general rule prohibited and may be authorised only in exceptional cases for regions fulfilling certain requirements. Such aid must also be progressively reduced and limited in time.

( see paras 77-78 )

3. When aid granted by the State strengthens the position of an undertaking vis-à-vis other undertakings competing in intra-Community trade the latter must be regarded as affected by that aid. For that purpose, it is not necessary for the recipient undertaking itself to export its products. 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.

Similarly, where a Member State grants aid to undertakings operating in the service and distribution industries, it is not necessary for the recipient undertakings themselves to carry on their business outside the Member State for the aid to have an effect on Community trade, especially in the case of undertakings established close to the frontier between two Member States.

The relatively small amount of aid, or the relatively small size of the undertaking which receives it, does not as such exclude the possibility that intra-Community trade might be affected.

( see paras 84-86 )

4. When stating the reasons for a decision on the compatibility of an aid programme with the common market, the Commission may confine itself to examining the characteristics of the programme in question in order to determine, in the grounds of its decision, whether, by reason of the terms of the programme, it gives an appreciable advantage to recipients in relation to their competitors and is likely to benefit in particular undertakings engaged in trade between Member States.

( see para. 89 )

5. The abolition, by means of recovery, of State aid which has been unlawfully granted is the logical consequence of a finding that it is unlawful and the aim of obliging the State concerned to abolish aid found by the Commission to be incompatible with the common market is to restore the previous situation.

By repaying the aid, the recipient forfeits the advantage which it had enjoyed over its competitors on the market, and the situation prior to payment of the aid is restored. It also follows from that function of repayment of aid that, as a general rule, the Commission will not, save in exceptional circumstances, exceed the bounds of its discretion, recognised by the case-law of the Court, if it asks the Member State to recover the sums granted by way of unlawful aid, since it is only restoring the previous situation.

In that regard, just as the social character of State intervention is not sufficient to exclude it outright from being categorised as aid, so the argument that what is concerned is a mechanism of employment law does not amount to an exceptional case in which there might be grounds for excluding repayment.

( see paras 98-99, 101 )

6. In the matter of State aid, where, contrary to the provisions of 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.

( see para. 106 )