Keywords
Summary

Keywords

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1. Actions against Member States for failure to fulfil obligations ° Failure to comply with a Commission decision concerning State aid ° Decision not challenged by way of an application for its annulment ° Pleas in defence ° Plea questioning the lawfulness of the decision ° Not admissible ° Absolute impossibility of implementation ° Admissible

(EEC Treaty, Arts 93(2), first and second subparas, and 173, third para.)

2. State aid ° Recovery of unlawful aid ° Aid granted in the form of a tax exemption ° Recovery possible by means other than retroactive taxation contrary to the general principles of Community law ° Absolute impossibility of implementation ° None

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

3. State aid ° Recovery of unlawful aid ° Aid granted contrary to the procedural rules in Article 93 of the Treaty ° Possible legitimate expectations of recipients ° Protection ° Conditions and limits

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

4. State aid ° Commission decision declaring aid to be incompatible with the common market ° Difficulties in implementation ° Obligation on the Commission and the Member State to cooperate in seeking a solution consistent with the Treaty

(EEC Treaty, Arts 5 and 93(2), first subpara.)

Summary

1. After the expiry of the time-limit laid down in the third paragraph of Article 173 of the Treaty, a Member State to which a decision taken under the first subparagraph of Article 93(2) of the Treaty has been addressed may not call into question the validity of that decision in proceedings brought under the second subparagraph of that provision.

In those circumstances the only defence which a Member State may still raise to an action for failure to fulfil Treaty obligations is that it is absolutely impossible to implement the decision properly.

2. The obligation to recover State aid which has been declared unlawful is the logical consequence of the finding by the Commission that it is unlawful, and as such cannot depend on the form in which the aid has been granted.

Where an aid has been granted in the form of a tax exemption and has duly been found to be unlawful, the Member State obliged to recover that aid cannot claim that recovery would be absolutely impossible on the ground that it would necessarily take the form of a retroactive tax which would conflict with general principles of Community law. Its obligation is only to take measures ordering the undertakings which have received the aid to pay sums corresponding to the amount of the tax exemption unlawfully granted to them.

3. While a recipient of unlawfully granted aid is not precluded from relying, in order to oppose repaying it, on exceptional circumstances which may legitimately have caused it to assume the aid to be lawful, a Member State whose authorities have granted the aid contrary to the procedural rules laid down in Article 93 of the Treaty may not, in contrast, rely on the legitimate expectations of recipients in order to justify a failure to comply with the obligation to take the steps necessary to implement a Commission decision ordering 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 decisions taken by the Commission under those provisions of the Treaty of their effectiveness.

4. A Member State which, in giving effect to a decision declaring an aid to be incompatible with the common market, encounters unforeseen and unforeseeable difficulties or perceives consequences overlooked by the Commission may submit those problems for consideration by the Commission, together with proposals for suitable amendments to the decision in question. In such cases the Commission and the Member State must, by virtue of the rule imposing on the Member States and the Community institutions a duty of genuine cooperation, a rule which underlies in particular Article 5 of the Treaty, work together in good faith with a view to overcoming the difficulties while fully observing the Treaty provisions, in particular the provisions on aid.