1. 

The present case concerns the appeals lodged by Société nationale maritime Corse-Méditerranée (SNCM) SA (‘SNCM’) and the French Republic against the judgment of the General Court of the European Union in Corsica Ferries France v Commission (‘the judgment under appeal’), ( 2 ) in so far as that judgment annulled the second and third paragraphs of Article 1 of Commission Decision 2009/611/EC of 8 July 2008 concerning the measures C 58/02 (ex N 118/02) which France has implemented in favour of SNCM (‘the decision at issue’). ( 3 )

2. 

By decision of 24 January 2013, the President of the Court ordered that Cases C‑533/12 P and C‑536/12 P be joined.

3.

SNCM is a shipping company operating regular services from mainland France (Marseilles, Toulon and Nice) to Corsica, North Africa (Algeria and Tunisia) and Sardinia.

4.

In 2002, SNCM was 20% held by the Société nationale des chemins de fer (French National Railways) and 80% held by the Compagnie générale maritime et financière (‘CGMF’), which in turn were wholly owned by the French State. When it opened its capital in 2006, two purchasers, Butler Capital Partners (‘BCP’) and Veoila Transport (‘VT’), assumed control of 38% and 28% of the capital, respectively, whilst CGMF maintained a presence with 25% and 9% of the capital was reserved for the employees. Since then, BCP has transferred its shares to VT.

5.

Corsica Ferries France SAS (‘Corsica Ferries’) is a shipping company operating regular services to Corsica from mainland France (Marseilles, Toulon and Nice) and Italy. It is one of SNCM’s main competitors. When the decision at issue was adopted, Corsica Ferries was the dominant player in services by sea between the mainland and Corsica and its market share was continuing to increase. ( 4 )

6.

By letter of 18 February 2002, the French Republic notified the Commission of a plan to grant aid for the restructuring of SNCM in an amount of EUR 76 million (‘the 2002 Plan’).

7.

By Decision 2004/166/EC of 9 July 2003 on aid which France intended to grant for the restructuring of Société nationale maritime Corse-Méditerranée (SNCM) (‘the 2003 Decision’), ( 5 ) the Commission approved, with conditions attached, two tranches of restructuring aid to SNCM in a total amount of EUR 76 million, one of EUR 66 million, payable immediately, and the other of a maximum amount of EUR 10 million, depending on the net result from disposals relating to, in particular, SNCM’s vessels. The only element of the 2002 Plan which is at issue is the balance for restructuring in the final amount of EUR 15.81 million. ( 6 )

8.

By Decision 2005/36/EC of 8 September 2004 amending the 2003 Decision, ( 7 ) the Commission amended one of the conditions imposed by Article 2 of the 2003 Decision. Those amendments have no bearing on the present appeals.

9.

On 13 October 2003, Corsica Ferries brought an action before the General Court for annulment of the 2003 Decision.

10.

By decision of 16 March 2005, the Commission approved, on the basis of the 2003 Decision, part payment of the second tranche of aid for restructuring referred to in point 7 of this Opinion, in the amount of EUR 3 327 400.

11.

By judgment of 15 June 2005, ( 8 ) the General Court annulled the 2003 Decision on the ground of an erroneous assessment of the minimal nature of the aid, due principally to calculation errors in the net proceeds from disposals, while rejecting all the other pleas in law alleging an insufficient statement of reasons and an infringement of Article 87(3)(c) EC [now Article 107(3)(c) TFEU] ( 9 ) and of the Community Guidelines on State aid for rescuing and restructuring firms in difficulty. ( 10 )

12.

In a letter dated 7 April 2006, the French authorities called on the Commission to find that, by reason of its nature as public service compensation, part of the restructuring aid agreed to under the 2002 Plan, in the amount of EUR 53.48 million, should be classified ‘not as a measure taken under a restructuring plan but as non-aid in accordance with the Altmark case-law [Case C-280/00 Altmark Trans and Regierungspräsidium Magdeburg [2003] ECR I-7747] or as an autonomous measure independent of the restructuring plan pursuant to Article 86(2) EC’. ( 11 )

13.

On 21 April 2006, the planned merger consisting in the acquisition of joint control of SNCM by BCP and VT was notified to the Commission pursuant to Article 4 of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings. ( 12 ) The Commission authorised the merger on 29 May 2006 on the basis of Article 6(1)(b) of that regulation.

14.

On 16 May 2006, BCP, VT and CGMF signed a memorandum of understanding, under which 75% of SNCM’s capital is to be sold to private purchasers. That memorandum contains three State measures which are central to the proceedings before the General Court and are at issue in the present proceedings:

15.

Following the submission on 13 September 2006 by the French authorities of information concerning the financial operations which had taken effect on the transfer of SNCM to the private sector, the Commission decided to initiate the procedure under Article 88(2) EC and to examine in that context the new measures carried out in favour of SNCM while incorporating the 2002 Plan. ( 13 )

16.

By the decision at issue, the Commission found that the capital contribution of EUR 53.48 million provided for in the 2002 Plan as public service compensation constituted unlawful State aid for the purpose of Article 88(3) EC but was compatible with the common market under Article 86(2) EC and Article 87(3)(c) EC, and that the measures laid down in the 2006 privatisation plan did not constitute State aid within the meaning of Article 87(1) EC.

17.

By its action before the General Court, Corsica Ferries requested that the decision at issue be annulled.

18.

By the judgment under appeal, the General Court upheld its action in part. With regard to the three measures accompanying the memorandum of understanding of 16 May 2006 and the balance for restructuring contained in the 2002 Plan, it held as follows:

19.

On the basis of those findings, the General Court annulled the second and third paragraphs of Article 1 of the decision at issue.

20.

By its appeal lodged at the Court on 22 November 2012, SNCM sought to have the judgment under appeal set aside in part. By its appeal lodged at the Court on 26 November 2012, the French Republic sought to have the judgment under appeal set aside. On 28 February 2013, Corsica Ferries lodged its response. A hearing was held on 6 November 2013, at which SNCM, the French Republic and Corsica Ferries presented their oral arguments.

21.

It should be pointed out that the Commission, whose decision was annulled in part by the General Court, has not challenged the judgment of the General Court, either by lodging an appeal or by supporting SNCM and the French Republic or even by attending the hearing before the Court.

22.

SNCM and the French Republic put forward four grounds of appeal relating to each of the four measures referred to in point 18 of this Opinion

23.

In recitals 259 to 348 of the decision at issue, the Commission took the view that, in order to establish whether the privatisation of SNCM for a negative sale price of EUR 158 million involved elements of State aid, it was necessary to assess whether, in similar circumstances, a private investor could have been prevailed upon to make capital contributions of the same size in connection with the sale of SNCM or whether it would instead have chosen to wind it up.

24.

In the view of the Commission, large groups of undertakings currently cannot, when they close sites or wind up subsidiaries, disregard the social consequences which such closures or liquidations involve. It added that more often than not they carry out social plans, which may include redundancy payments which go beyond the requirements of statutory provisions and collective agreements.

25.

The Commission therefore took the view that, in the event of SNCM’s liquidation, such measures would have been introduced which exceeded any statutory obligations with the aim of avoiding harming the brand image of the holding company and that of its ultimate shareholder, namely the French State.

26.

The Commission went on to examine whether the cost of the redundancy payments going beyond the requirements of statutory provisions and collective agreements exceeded the negative sale price and concluded that this was not the case. On that basis, the Commission accepted that the choice to dispose of SNCM at a negative price of EUR 158 million did not constitute State aid, since it was consistent with the choice which a private group of undertakings in a market economy would have made taking account of the social costs which a liquidation of the undertaking would entail.

27.

In the course of its examination of the application of the private investor test, the General Court accepted that, in order to define the conduct of a reasonable private investor, it was also necessary to take account of its responsibilities in a social market economy towards all the stakeholders in the company and the development of the social, economic and environmental context in which it carries on its business. ( 14 )

28.

For that purpose, the General Court accepted that the payment by a private investor of additional redundancy payments may constitute a legitimate and appropriate practice with a view to fostering a calm social dialogue and maintaining the brand image of a company or group of companies. ( 15 ) However, according to the General Court, in the absence of any economic rationale, even in the long term, the assumption of the burden of costs which exceeds the strict statutory obligations and obligations under agreements must be considered to be State aid. ( 16 )

29.

In that regard, the General Court criticised the Commission for having failed to define the French State’s economic activities for which a need to protect the brand image might potentially exist and in relation to which it was necessary to assess the economic rationale of the disposal at the negative price agreed in the present case. ( 17 )

30.

In the absence of such a definition, the General Court held that it was impossible for it to monitor the long-term economic rationale of the negative sale price which the French State granted in order to avoid making additional redundancy payments in the event of liquidation. It therefore concluded from this that the Commission had erred in law. ( 18 )

31.

Furthermore, the General Court found that the Commission had not adduced sufficient objective and verifiable data to show that the making of additional redundancy payments is an established practice among private entrepreneurs, and also found that the Commission had failed to put forward any information capable of establishing the existence of a reasonable probability that the social costs justifying the making of those payments would arise. ( 19 )

32.

Before upholding the plea in law raised by Corsica Ferries, alleging that the Commission had committed a manifest error of assessment by taking the view that the approval of the disposal of SNCM at a negative price did not constitute State aid, ( 20 ) the General Court concluded by finding that ‘[t]he Commission has therefore not adduced any evidence making it possible to show, to the requisite legal standard, how the inclusion of the considerable cost of the additional redundancy payments, which, moreover, may reach up to 10 times the amount of the statutory obligations and obligations under agreements alone, as is apparent from recital 277 of the decision at issue, might have been motivated, in the present case, by a reasonable probability that the French State would obtain a material indirect benefit, even in the long term. Although it is impossible to exclude the risk of certain social consequences in other public companies in the event of a liquidation of SNCM without additional redundancy payments being made, the scale of the indirect social costs concerned, and the probability of their being incurred, was not analysed by the Commission at all, even in its written answers to the Court. Consequently, it is necessary to take the view that the long-term economic rationale of the French State’s conduct has not been demonstrated to the requisite legal standard.’ ( 21 )

33.

SNCM alleges that the General Court failed to have regard to the margin of assessment enjoyed by the Commission for the purposes of applying the private investor in a market economy test.

34.

In paragraphs 86 and 87 of the judgment under appeal, the General Court pointed out that, in the context of the private investor test, it is for the Commission to define the economic activities of the State, in particular at the geographic and sectoral level, in relation to which the long-term economic rationale of that Member State’s conduct has to be assessed. According to the General Court, that analysis is essential in order to determine, on the basis of objective and verifiable factors, whether there is a sufficiently well-established practice amongst the reference private investors defined previously and to establish the existence of a reasonable and sufficiently substantiated probability that the Member State will obtain an indirect material benefit.

35.

SNCM takes the view that those findings of the General Court go far beyond an analysis of any manifest error of assessment on the part of the Commission and call into question its economic assessment of the facts presented to it as well as the quality of the work of the independent expert appointed by the Commission. According to SNCM, the judgment under appeal is contrary to the institutional balance in so far as the General Court acted as an expert on the undertaking’s economic and social relationships.

36.

I propose that the Court dismiss the first part of the first ground of appeal raised by SNCM for the following reasons.

37.

It is true that it should be borne in mind that the European Union judicature must not substitute its own economic assessment for that of the Commission. ( 22 ) As the Court has already held, ‘[t]he review by the European Union judicature of the complex economic assessments made by the Commission is necessarily limited and confined to verifying whether the rules on procedure and on the statement of reasons have been complied with, whether the facts have been accurately stated and whether there has been any manifest error of assessment or misuse of powers’. ( 23 )

38.

However, contrary to SNCM’s claim, the General Court did not substitute its own assessment for that of the Commission, but rather pointed to gaps in the Commission’s reasoning, and in particular in the way in which the Commission substantiated that reasoning, which raised doubts as to whether the Commission had correctly applied Article 87 EC.

39.

Nor can I accept the complaint that the General Court failed to take account of the fact that the Commission had appointed an independent expert and had based its decision on his findings, thus casting doubt upon the content of the expert’s work. As Corsica Ferries points out, the General Court did not dispute the expert’s findings but, once again, simply criticised the Commission for having failed to substantiate its own reasoning sufficiently or to adduce in support of its conclusion sufficient objective and verifiable information, which would have been made available to it as a result of the expert’s work.

40.

The first ground of appeal advanced by the French Republic, and more specifically the first part of that ground of appeal, raises the issue of taking into account the brand image of the State as a global economic player in a market economy, with a view to excluding the payment of additional redundancy payments from the concept of ‘State aid’. Since that issue can arise only if the payments in question exceed the amounts required under statutory obligations and obligations under collective agreements and if it has not been possible to show that that type of payment constituted a well-established practice in the economy at issue, it appears to me to be more logical to begin by addressing the second part of the first ground of appeal raised by the French Republic, that is that the General Court erred in law in requiring the Commission to prove that the payment of additional redundancy payments constituted a sufficiently well-established — or even settled — practice among private investors.

41.

SNCM argues to the same effect in criticising the General Court for having, in connection with the interpretation and application of the private investor test, established, in paragraphs 86 and 87 of the judgment under appeal, a ‘wholly judge-made test’ which requires the Commission to carry out a sectoral or geographic analysis (point (i)), demonstrate a sufficiently well-established practice (point (ii)) and satisfy an excessively high standard of proof in order to establish the existence of a probability of an indirect material benefit (point (iii)).

42.

In paragraph 86 of the judgment under appeal, the General Court held that, ‘in the context of the private investor test, it is for the Commission, in its broad discretion, to define the economic activities of the State, in particular at the geographic and sectoral level, in relation to which the long-term economic rationale of that Member State’s conduct has to be assessed’. ( 24 )

43.

The General Court therefore criticises the Commission for having failed to furnish the data necessary to evaluate the economic rationale behind the payment of additional redundancy payments.

44.

As Corsica Ferries points out, the use of the words ‘in particular’ shows that the General Court left open the possibility of taking other factors into account and not confining the application of the private investor test to a geographic or sectoral analysis.

45.

Furthermore, there is nothing in the case-law which prevents the General Court from observing that a geographic or sectoral analysis could be relevant for the purposes of evaluating the long-term economic rationale of the State’s conduct. In addition, that analysis could conclude that the economic activities of the State in question cover a very broad spectrum and multiple sectors. It could also be useful, since salaries and redundancy payments vary considerably depending on the markets or sectors concerned.

46.

SNCM relies on Italy and SIM 2 Multimedia v Commission, in which the Court of Justice held that ‘it is necessary to determine whether, in similar circumstances, a private investor of a dimension comparable to that of the bodies managing the public sector could have been prevailed upon to make capital contributions of the same size’. ( 25 )

47.

In my view, it is precisely the purpose of that definition to identify in terms of size the type of private investor which would be comparable to the State, which an analysis ‘in particular at the geographic and sectoral level’ of the State’s economic activities, as suggested by the General Court, may help to make clear.

48.

The second part of the first ground of appeal raised by SNCM must likewise be dismissed in so far as it alleges an infringement of Article 295 EC, under which ‘[t]his Treaty shall in no way prejudice the rules in Member States governing the system of property ownership’. SNCM is of the view that the geographic and sectoral analysis referred to by the General Court in paragraph 86 of the judgment under appeal disregards the existence of widely diversified private holding companies whose activities are not limited to one sector or to a particular geographic area. I do not see how such a geographic and sectoral analysis of the State’s economic activities and the fact that certain private holding companies are not limited to one sector or to one geographic area could have an impact on the protection afforded to the system of property ownership existing in the Member States.

49.

In paragraphs 95 and 96 of the judgment under appeal, the General Court held that the Commission had not ‘adduced sufficient objective and verifiable data capable of showing that the making of additional redundancy payments, in similar circumstances, is an established practice among private entrepreneurs’ and ‘[had] limited itself to noting that the payment of additional redundancy payments … had become an established practice among large groups of undertakings …’. The General Court criticised the Commission for failing to produce any evidence whatsoever to support that claim.

50.

SNCM takes the view that, as a result of that criticism of the Commission’s reasoning, the General Court is introducing a new requirement which goes beyond what is necessary for the correct application of the private investor test and infringes Article 345 TFEU. The French Republic and SNCM are of the opinion that, in order to comply with the requirements of the private investor test, it is sufficient to demonstrate that just one private undertaking has made additional redundancy payments in similar circumstances.

51.

I do not agree with that criticism of the judgment under appeal.

52.

I would point out that the payment of additional redundancy payments must be assessed in the context of the private investor test, with a view to determining whether the cost of winding up SNCM would exceed the cost of disposing of it at the negative price of EUR 158 million, in other words whether a private investor in the State’s position would have gone ahead with that disposal.

53.

It is therefore necessary to determine whether the cost of liquidation would include the additional payments at issue. That would be the case if the payments were provided for by law or collective agreements. Since, in the present case, the additional redundancy payments greatly exceed those requirements, in the light of the private investor test the only possible reason for taking those payments into account when calculating the cost of liquidation would be that this was a sufficiently well-established practice.

54.

SNCM and the French Republic are of the view that the possibility that a single private investor could have decided, or the fact that such an investor did decide, to make such additional redundancy payments is sufficient to include them in the calculation of the cost of liquidation.

55.

That approach appears to me to be clearly inadequate, especially if that single possibility that a private investor could have taken, or that single occasion on which such an investor did take that decision, are found among several examples of private investors which did not do so; that would prove that, save in wholly exceptional circumstances, there is no economic rationale behind the payment of additional redundancy payments.

56.

As Corsica Ferries pointed out at the hearing, proof of the existence of a well-established, common or settled practice in the market does not, in that context, constitute a new or extraordinary requirement. The Commission itself pointed out in one of its communications on State aid that State resources constitute aid where they cannot ‘be regarded as a genuine provision of risk capital according to usual investment practice in a market economy’. ( 26 ) The terminological differences (‘usual practice’, ‘established practice’, ( 27 )‘sufficiently well-established practice’, ( 28 )‘established practice’ (in French: ‘pratique courante’) ( 29 ) or ‘established practice’ (in French: ‘pratique constante’) ( 30 )) do not, in my view, indicate the emergence of a new evidential requirement in the General Court’s judgment.

57.

Furthermore, in recital 268 of the decision at issue, the Commission states that large groups of undertakings ‘more often than not … carry out social plans …, which go beyond the requirements of statutory provisions and collective agreements’. The words ‘more often than not’ could refer only to an established practice, the existence of which must clearly be proven.

58.

That said, save where verifying whether the rules on procedure and on the statement of reasons have been complied with, whether the facts have been accurately stated and whether there has been any manifest error of assessment or misuse of powers, ( 31 ) the identification of a sufficiently well-established practice is a matter not for the European Union judicature but for the Commission, which is, moreover, implicitly responsible for demonstrating, if only by mere assertions, that the practice in question is indeed an established practice in the market. ( 32 )

59.

The General Court found that the Commission, in footnote 135 of the decision at issue, had provided only one example from 1991, but one in which the issue of making payments comparable to those in the present case was not raised, and 10 other cases of social plans which, as the Commission acknowledged at the hearing before the General Court, related not to winding up operations but to restructuring operations which, moreover, were carried out in sectors wholly unrelated to maritime transport. ( 33 )

60.

It is therefore within those limits that the General Court held that, by merely noting, ‘without producing any evidence whatsoever to that effect’, ( 34 ) that the payment of additional redundancy payments was an established practice among private investors, the Commission had not sufficiently substantiated its decision.

61.

At this stage, I can also dismiss the fourth part of the first ground of appeal raised by SNCM, by which SNCM alleges that the General Court failed to fulfil its obligation to state reasons in failing to define the concepts of a ‘sufficiently well-established practice’ and an ‘established practice’.

62.

Quite apart from the fact that those expressions are quite clear and refer to a factual assessment, the General Court was not required to define them, particularly since a lengthy statement of reasons is not necessary to understand that a single or several unconvincing example(s) cannot constitute an ‘established’ or ‘sufficiently well-established practice’.

63.

I am therefore of the view that the General Court was right to hold that the Commission had not adequately established that the payment of additional redundancy payments was a sufficiently well-established practice among private investors.

64.

In paragraph 101 of the judgment under appeal, the General Court held that, in the absence of an established practice of payment of additional redundancy payments, the Commission had also failed to show that the payment at issue was motivated on the part of the French Republic by a reasonable probability of obtaining an indirect material profit, even in the long term.

65.

SNCM complains that, in so ruling, the General Court placed an excessive burden of proof on the Commission, since the latter would have had to quantify precisely the damage suffered in the event of the deterioration of the State’s brand image, although such a quantification, by its very nature, would have to be based on factors which are difficult to predict.

66.

That interpretation of the judgment under appeal is incorrect. In paragraph 102 of that judgment, the General Court ruled that ‘[t]he Commission did not put forward any factor, in the decision at issue, capable of explaining the specific nature of the damage suffered and, in particular, of specifying the stakeholders (users, clients, suppliers or staff) in relation to whom the brand image of CGMF and the French State would be affected. Moreover, the decision at issue contains no factor which has the effect of demonstrating that the Commission attempted to quantify the damage suffered, damage which must, however, necessarily be compared with the estimated cost of the additional redundancy payments for which it constitutes the justification’.

67.

Without making any reference to a ‘precise quantification’, the General Court observed that ‘[t]he Commission limited itself, at recitals 270 and 271, to confirming that the social tensions within the undertaking, which were, according to it, demonstrated by the social conflict which took place during 2004, would lead, in the event of the liquidation of SNCM, to social problems liable to alter the brand image of its parent company and its ultimate shareholder.’ ( 35 )

68.

In addition, at the hearing before the General Court, the Commission acknowledged that it had given no consideration to the reasonable probability that the social costs (for example, strikes) justifying payment of the additional redundancy payments would arise. ( 36 ) It therefore appears to me that the General Court did not in any way impose an excessive burden of proof and merely found that the statement of reasons provided by the Commission was insufficient in that regard.

69.

As I have already stated in point 40 of this Opinion, by its first ground of appeal the French Republic alleges that the General Court infringed Article 87(1) EC in finding that the Commission could not, in the context of the reasonable private investor test, take into account the risk that the brand image of the State, as a global economic player in a market economy, might be adversely affected.

70.

More specifically, by the first part of that ground of appeal, the French Republic claims that, in paragraphs 90, 93 and 94 of the judgment under appeal, the General Court in reality denied the Member State the possibility of taking into account the risk that its brand image, as a global economic player, might be adversely affected, a possibility which, however, it appeared to have afforded it in paragraph 85 of its judgment.

71.

The French Republic takes the view that the Commission was entitled to take such a risk into account in order to determine whether the payment of additional redundancy payments reflected prospects of long-term profitability and whether, in similar circumstances, a reasonable private investor would likewise have been prompted to make such payments in order to protect its brand image.

72.

The French Republic also considers that the payment of additional redundancy payments is necessary in order to protect the State’s brand image. In support of its approach, it refers to the risk of solidarity strikes which might spread throughout the entire public sector and have the effect of paralysing the economic activity of undertakings in that sector.

73.

In that context, the French Republic claims that an epidemic of strikes would result in serious economic losses for the State. It refers to the sudden breakdown of contractual relationships between the striking undertakings and their suppliers and customers and to the problems of payment and supply which would force non-professional customers of the public undertakings to turn to competing private undertakings.

74.

The French Republic therefore takes the view that preventing such harmful economic consequences represents the indirect material benefit that the State sought to obtain from the payment of the additional redundancy payments.

75.

I cannot accept that argument.

76.

It must be pointed out first of all that, in paragraph 83 of its judgment, the General Court accepted that ‘the option of making additional redundancy payments is also open to the Member States in the event that a public company goes into liquidation, even though their obligations cannot in principle exceed the strict minimum under statutory obligations and obligations under agreements’.

77.

In paragraph 84 of the judgment under appeal, however, the General Court held that, in the absence of any economic rationale, a payment of that type which exceeds the strict statutory obligations and obligations under agreements must be considered to be State aid within the meaning of Article 87(1) EC, adding, in paragraph 85 of the same judgment, that it could not be sufficient to refer summarily to the brand image of a Member State, as a global economic player, in order to escape classification as State aid.

78.

Again in paragraph 85 of that judgment, the General Court held that, other than under specific circumstances and without a particularly cogent reason, the protection of the brand image of a Member State as a global investor in the market economy cannot constitute sufficient justification to demonstrate the long-term economic rationale of the assumption of additional costs such as additional redundancy payments.

79.

Contrary therefore to the submissions of the French Republic, although the General Court requires the existence of ‘specific circumstances and a particularly cogent reason’, ( 37 ) it did not rule out in principle the possibility of taking into account the brand image of a Member State as a global investor in the economy in a factual and legal context such as that in the present case. It appears to me that that position adopted by the General Court may be reconciled with the case-law of the Court.

80.

It must be noted first of all that there is little case-law on the brand image of the State as an economic player. The first judgment on this point, which is in fact referred to by the Commission in the decision at issue, ( 38 ) is Italy v Commission, in which the Court accepted that the decision to bear losses ‘may be motivated not solely by the likelihood of an indirect material profit but also by other considerations, such as a desire to protect the group’s image or to redirect its activities’. ( 39 )

81.

However, the Court made that finding in relation to a private investor who wishes ‘to secure the survival of an undertaking which is experiencing temporary difficulties’ or ‘to enable [a subsidiary] to close down its operations under the best possible conditions’. ( 40 )

82.

On the basis of that analysis, the Court concluded that ‘when injections of capital … disregard any prospect of profitability, even in the long term, such provision of capital must be regarded as [State] aid’. ( 41 ) In that case, the Court took the view that in reality ‘the losses were made up in circumstances which would have been unacceptable for a private investor operating under normal market conditions and that no private investor, even an industrial holding company, would have taken into account the considerations put forward by the Italian and Spanish Governments’, ( 42 ) that is social and regional considerations, ( 43 ) which are similar to those raised by the French Republic in the present case.

83.

The brand image of the State was relied on for a second time in the context of the private investor test by the Spanish Government in Spain v Commission. ( 44 ) The Spanish Government had attempted to justify the injection of capital into the State-owned company Hytasa, held through the Patrimonio del Estado (the Property Office of the Ministry of Economic Affairs and Finance), by explaining that ‘one of the relevant considerations was the need to maintain the image of the parent company. The image of the Patrimonio del Estado would be severely damaged if it closed down its operations in an area of high unemployment and social deprivation. A private company in the same situation as the Patrimonio del Estado would also be sensitive to trade union pressure or to political pressure.’ ( 45 )

84.

In that case, in response to the Spanish Government’s argument to the effect that its conduct was that of a private investor since the alternative, namely to wind Hytasa up, would have been more costly to the State, Advocate General Jacobs observed that ‘a distinction [had to] be made between the obligations of the Patrimonio del Estado, as owner of the share capital in Hytasa, and the obligations of the Spanish State as provider of social security and unemployment benefits’. ( 46 ) In the Advocate General’s view ‘[t]he latter type of obligation [could not] be taken into account for the purposes of applying the private investor test’. ( 47 )

85.

He therefore took the view that the argument that the capital contribution to Hytasa was justified in order to protect the brand image of the Patrimonio del Estado was wholly irrelevant. On that basis, he concluded that ‘it [was] difficult to accept that a State-owned holding company would be so concerned about the damage to its collective image ensuing from the failure of one of its enterprises that it would, for that reason alone, offer huge sums of money to a private company as an inducement to take the enterprise over’. ( 48 )

86.

The Court arrived at the same conclusion as Advocate General Jacobs, expressing, as he did, doubts as to the economic rationale of such conduct by the State. ( 49 )

87.

The concept of the ‘brand image of the State’ reappeared in the case-law of the Court in connection with an application for the suspension of the operation of a Commission decision on State aid granted by the Land of Bavaria to a German undertaking in which the Land had a 45% shareholding. ( 50 ) The Land of Bavaria had granted loans to that undertaking which were repayable only if the undertaking had recorded a profit in the preceding year. ( 51 ) The German Government attempted to justify that conduct by stating that ‘[l]iquidation of the company would have resulted in additional costs for Bavaria, would also have caused considerable damage to its image as an entrepreneur and would have prevented the synergy which would have followed from the reorientation of the whole group’. ( 52 )

88.

In his order, the President of the Court rejected the application for interim measures made by the Federal Republic of Germany, ruling, inter alia, that ‘subject to the limitations of an initial analysis, the general considerations relied upon, concerning in particular the preservation of Bavaria’s image or the reorganisation of its activities, are insufficient to show that the Commission committed a manifest error’. ( 53 ) He had at the outset pointed out in relation to the Commission’s analysis of the private investor test that it did not appear that ‘the applicant and the intervener [had] produced specific evidence of sufficient significance in support of the claim that Bavaria could rightly expect repayment of the loans’. ( 54 )

89.

In the proceedings before the General Court, the German Government reiterated its argument based on the brand image of the State. ( 55 ) The General Court held that the applicants had failed to show ‘what constitutes the image of Bavaria as a private entrepreneur in the [industrial sector at issue, here: the steel sector] or in what respect the bankruptcy of [the undertaking in question] could have tarnished that image’. ( 56 ) The General Court therefore concluded that ‘it [was] not plausible that Bavaria was forced to pay a large sum of money to a private company … to induce it to take over [the undertaking in question] in order to prevent the bankruptcy of the latter from seriously harming Bavaria’s image’. ( 57 )

90.

The Court dismissed the appeal lodged against that judgment of the General Court without ruling on the relevance of the State’s brand image. ( 58 )

91.

In the light of the foregoing, the General Court did not err in law in concluding that ‘the protection of the brand image of a Member State as a global investor in the market economy cannot constitute, other than under specific circumstances and without a particularly cogent reason, sufficient justification to demonstrate the long-term economic rationale of the assumption of additional costs such as additional redundancy payments’, ( 59 ) and that that argument relating to the brand image of the State did not in any event concern CGMF, which had no other asset in the maritime transport sector. ( 60 )

92.

Without ruling out, as a matter of principle, the possibility of providing the evidence required by the General Court, I would point out that it appears to me to be highly unlikely that the arguments put forward thus far by the States in connection with their brand image as global investors in a market economy could ever prevent their decisions from being classified as State aid in the light of the private investor test.

93.

That test lays down as a minimum requirement, albeit over the long term, prospects of viability of the recapitalisation measures and of the repayment of the sums loaned. As the Court held in paragraph 26 of Spain v Commission, ‘a private investor pursuing a structural policy — whether general or sectoral — and guided by prospects of viability in the long term cannot reasonably allow himself, after years of continuous losses, to make a contribution of capital which, in economic terms, proves to be not only costlier than selling the assets, but is moreover linked to the sale of the undertaking, which removes any hope of profit, even in the longer term’. This means that ‘when injections of capital by a public investor disregard any prospect of profitability, even in the long term, such provision of capital must be regarded as State aid’. ( 61 )

94.

In addition, the concerns raised by the Member States in relation to their brand image as global investors in a market economy, as worthy as they might be in other respects, are very far removed from those of a private investor, whether they relate to the ‘political costs’ (alongside the economic and social costs) of the closure of an undertaking, ( 62 )‘trade union pressure or political pressure’, ( 63 ) the location of the struggling undertaking ‘in an area with social difficulties’ ( 64 ) or, as in the present case, the risk of solidarity strikes which might spread throughout the public sector. ( 65 ) The prospect of the viability — even in the long term — of the undertaking benefiting from the State measure plays no part whatsoever in those considerations.

95.

Moreover, I am in complete agreement with the General Court where it ruled that ‘[t]he effectiveness of the [Union’s] rules governing State aid would be greatly reduced if the Court accepted the … argument to the effect that any State participation in an undertaking would permit the public authorities, by referring to the image of the public body involved and its other participations, to make unlimited financial injections from public funds without such provisions of capital being regarded as aid’. ( 66 )

96.

I therefore propose that the Court dismiss the first part of the first ground of appeal raised by the French Republic.

97.

SNCM alleges that the General Court distorted the decision at issue in ruling, in paragraph 93 of its judgment, that the Commission had failed to define, to the requisite legal standard, the State’s economic activities in relation to which it was necessary to assess the economic rationale of the disposal at a negative price.

98.

It is no surprise that SNCM puts forward that argument, since, in its view, the reference to the brand image of the State, which is understood to cover all the State’s economic activities, is sufficient to substantiate the decision at issue.

99.

I stated in my response to the first part of the first ground of appeal that this is not the case. Accordingly, the General Court did not distort the decision at issue where it found that assertions and generalisations made without any evidence cannot be regarded as a sufficient statement of reasons.

100.

In recitals 355 to 360 of the decision at issue, the Commission took the view that, since the contribution made by the private purchasers in the amount of EUR 26.25 million was significant and concurrent, it was possible from the outset to rule out the possibility that the capital contribution made by CGMF constituted aid. In recitals 361 to 365 of the decision at issue, the Commission also found that the fixed rate of return of 10% constituted an adequate return on the capital invested, and that the existence of a sale cancellation clause ( 67 ) was not such as to call into question the principle of equal treatment. It therefore concluded that the capital contribution from CGMF in the amount of EUR 8.75 million did not constitute aid within the meaning of Article 87(1) EC.

101.

With regard to the fixed rate of return of 10%, the Commission examined whether that return on CGMF’s stakeholding would have been acceptable to a hypothetical private investor. It took the view that, since the fixed yield exempted CGMF from any exposure in respect of performance of the business plan, that rate of return on the capital invested was adequate in the long term. In addition, the Commission’s expert concluded that, in terms of the risk profile, that capital contribution bore more similarity to a bond at a fixed rate than to an investment in shares.

102.

As regards the cancellation clause contained in the contract for the sale of SNCM, the Commission accepted that the existence of that clause was not such as to call into question the principle of equal treatment of investors. In the Commission’s view, that clause related, in fact, to the entire sale of SNCM to private purchasers and not to the concurrent investment by private investors and the State in the privatised SNCM.

103.

The General Court observed first of all that the Commission had recognised, in response to one of the General Court’s questions, that the simultaneity of public and private investments cannot in itself, even where significant private investments have been made, suffice for a finding that there has been no aid within the meaning of the Treaty without taking into consideration the other relevant facts and points of law.

104.

It went on to consider whether the Commission had taken account of all the relevant factors, and more specifically the issue of yields and that of the effect of the cancellation clause, in its assessment of the comparable nature of the investment conditions of the capital contributions made simultaneously. It concluded that the Commission had failed to do so. ( 68 )

105.

In paragraph 124 of the judgment under appeal, the General Court ruled that the Commission could not dispense with a thorough analysis of the effect of differences of yield of CGMF’s and the private purchasers’ shareholdings in the context of the examination of equal treatment.

106.

As regards the cancellation clause, the General Court held in paragraph 130 of the judgment under appeal that that clause was, at the least, capable of removing any uncertainty for the private purchasers in the event of the occurrence of one of the triggering factors and that that clause, consequently, had an actual financial value. It was liable to alter the risk profiles of the capital contributions of the private purchasers and of CGMF and to call into question the comparable nature of the investment conditions. In those circumstances, nor could the Commission, in the view of the General Court, refrain from conducting a thorough analysis of the economic impact of the sale cancellation clause.

107.

SNCM takes the view that, in finding that the Commission failed to take account of all the relevant factors, the General Court distorted the decision at issue. According to SNCM, the Commission considered that the fixed return of 10% on the State’s capital investment in SNCM constituted for a private investor adequate long-term profitability on the capital invested. SNCM considers that a fixed yield at a particularly high level is thus guaranteed for that type of investment, which shows that the rate of return of 10% would have been acceptable to a hypothetical private investor. If the cancellation clause were exercised, which would retroactively annul the contract of sale, the investment made by the State would be cancelled and therefore its yield would be nil, which shows, according to SNCM, that the impact of the cancellation clause was neutral and did not require a thorough analysis by the Commission.

108.

With regard to the existence of the cancellation clause itself, SNCM and the French Republic take the view that, when SNCM was acquired, the private purchasers purchased the guarantee of being able to recoup their capital contribution in the event of the occurrence of one of the events which allow that cancellation clause to be exercised. In the appellants’ view, the cancellation clause does not call into question the balance between the investment conditions applicable to subsequent capital contributions made by the private purchasers, on the one hand, and by the French State, on the other hand.

109.

In my view, the General Court could not conclude, in paragraph 131 of the judgment under appeal, that the Commission had omitted to take account of all the relevant factors, in particular the yields, in its assessment of the comparable nature of the investment conditions of the simultaneous capital contributions, both public and private, or, a fortiori, regard that omission as an error of assessment.

110.

However, its conclusion upholding the complaint which called into question the merits of the Commission’s analysis that the principle of equal treatment between the private purchasers and CGMF had been observed remains valid on other legal grounds. ( 69 )

111.

Indeed, although the Commission did make reference in its decision to the issue of the fixed return and that of the impact of the sale cancellation clause, the reasons stated for its conclusions on those two points cannot be regarded as being adequately established.

112.

On the issue of the yields, in recitals 361 to 363 of the decision at issue, the Commission took the view that the fixed rate of return was such that a private investor would have agreed to participate in the capital contribution in favour of SNCM in those circumstances. In the Commission’s view, the fact that the cancellation clause may be relied upon only by the private purchasers does not infringe the principle of equal treatment between the public investor and the private investors.

113.

Doubts could be cast over that conclusion — on grounds of a failure to provide an adequate statement of reasons — by the General Court, which observed that, unlike in the case of the French State, the yield of the capital contribution made by the private purchasers was not fixed by the memorandum of understanding, and that ‘[the] fixed rate of return [of the French State] [was] not, however, guaranteed, in so far as, if … the sale cancellation clause is exercised …, then the fixed yield would cease to be paid’. ( 70 ) The General Court also pointed to the existence of a disproportion with respect to the capital contribution made by the private purchasers, the counterpart of which consists, in its view, in ‘significant commitments, in various forms, made by the French State’. ( 71 )

114.

On the issue of the cancellation clause, the General Court points out the failure to state reasons in the decision at issue, ‘which merely states that it could not call into question the equal treatment of concurrent investors, but … does not contain any economic analysis’. ( 72 ) The Commission’s reasoning is reduced to four lines in recital 364 of the decision at issue, in which the Commission simply finds that the clause in question ‘relates, in fact, to the entire sale of SNCM to private purchasers and not to the concurrent investment (EUR 35 million) by private investors (EUR 26.25 million) and the State (EUR 8.75 million) in the privatised SNCM’.

115.

I therefore conclude that the General Court’s decision to uphold the complaint at issue is well founded by virtue of a failure to state reasons, the Commission having failed, or failed adequately, to substantiate its decision regarding the equality of treatment of public and private investors in SNCM.

116.

In recitals 366 to 379 of the decision at issue, the Commission stated that the measures involving aid to individuals going beyond the compensation provided for by social legislation and the applicable collective agreements, in the amount of EUR 38.5 million, deposited in an escrow account, would be implemented in the event of any new plan to reduce staff numbers decided upon by the private purchasers and that those measures would not relate to the implementation of the staff reductions provided for under the 2002 Plan.

117.

In the view of the Commission, that aid may be paid only to individuals whose employment contracts with SNCM have been terminated prematurely. Those measures do not therefore constitute charges arising out of the normal application of social legislation applicable to cases where employment contracts have been terminated. The Commission concluded that that aid to individuals, approved by the State in the exercise of its public authority and not by the State in its capacity as a shareholder, therefore fell with the Member State’s social policy and by the same token did not constitute aid within the meaning of Article 107(1) TFEU.

118.

In paragraphs 142 to 147 of the judgment under appeal, the General Court held that the decision at issue was vitiated by a manifest error of assessment, inasmuch as the Commission had failed to determine correctly the nature and effects of the existence of the escrow account.

119.

Firstly, the General Court took the view that the fact that the measure at issue did not result from the strict statutory obligations and obligations under agreements was not in itself liable to have the result that that measure was not in the nature of State aid. Secondly, it held that the existence of the escrow account was such as to create an inducement for SNCM employees to leave the company without negotiating the terms of their departure, in particular the possible grant of additional redundancy payments, which, according to the General Court, constitutes an indirect economic advantage for SNCM.

120.

SNCM alleges that the General Court distorted the decision at issue in finding that the Commission had claimed that the fact that the measure at issue did not result from the strict statutory obligations and obligations under agreements was, in principle, liable to have the result that that measure was not in the nature of State aid. SNCM is also of the view that the General Court erred in law by encroaching upon the discretion enjoyed by the Commission in connection with the assessment of complex economic situations. Lastly, SNCM and the French Republic allege that the General Court failed to state the reasons for its judgment in classifying the measure at issue as State aid without ascertaining, in the alternative, whether or not that measure satisfied the reasonable private investor test, as in fact the Commission maintained in recital 378 of the decision at issue.

121.

I propose that the Court dismiss the third ground of appeal for the following reasons.

122.

With regard to SNCM’s argument concerning the alleged distortion of the Commission’s decision, I consider that, in paragraph 143 of the judgment under appeal, the General Court correctly understood the Commission’s position that, in order to find that the measure in question did not constitute State aid, it was necessary to ascertain ‘that the measure does not exempt SNCM from having to pay charges arising out of its day-to-day operations, that is, in the present case, charges arising out of the normal application of social legislation applicable to the sector in respect of employment contracts’. ( 73 )

123.

The Commission’s reasoning, as set out in recitals 371 to 377 of the decision at issue, seeks to show that the measure in question results from obligations which go beyond the compensation provided for by social legislation and the applicable collective agreements. It is thus clear, particularly in the light of recital 377 of the decision at issue, that the Commission was of the view that the fact that the measure at issue did not result from the strict statutory obligations and obligations under agreements was liable to have the result that that measure was not in the nature of State aid.

124.

I therefore take the view that the General Court in no way distorted the Commission’s decision in the manner suggested by the third ground of appeal.

125.

SNCM alleges that, in paragraph 144 of the judgment under appeal, the General Court committed an error of law in encroaching upon the margin enjoyed by the Commission in the assessment of complex economic situations.

126.

In that paragraph, the General Court finds that ‘the existence of the escrow account is such as to create an inducement for SNCM employees to leave the company or, at least, to leave it without negotiating their departure, particularly in view of the possible grant of additional redundancy payments …, all of which created an indirect economic advantage for SNCM’.

127.

The issue of whether the escrow account is such as to create an inducement for SNCM employees to leave the company without negotiating their departure and whether it creates an indirect economic advantage for SNCM is quite clearly an issue relating to a finding of facts which does not fall within the jurisdiction of the Court of Justice in the context of an appeal.

128.

The second part of the third ground of appeal raised by SNCM is therefore inadmissible and must be dismissed.

129.

In the view of SNCM and the French Republic, the General Court failed to state the reasons for its decision by treating the measure in question as State aid without ascertaining, in the alternative, whether or not that measure satisfied the reasonable private investor test.

130.

The substance of that argument is effectively that, although the existence of the escrow account had the effect of mitigating the costs to be borne by SNCM, that measure could be exempted by virtue of application of the private investor test.

131.

SNCM and the French Republic are of the view (as was the Commission in recital 378 of the decision at issue) that, even if the value of the escrow account, that is to say EUR 38.5 million, were added to the negative sale price, that is to say EUR 158 million, the total sale price of EUR 196.5 million would still be below the cost of liquidation. This shows that a private investor would likewise have adopted that measure, which therefore does not constitute State aid.

132.

However, it is clear from recital 70 of the decision and from footnote 66 therein that the escrow account was set up in order to pay additional redundancy payments. I have already given my view on the application of the private investor test to such payments in my analysis of the first ground of appeal.

133.

For the reasons given in points 51 to 63 and 79 to 96 of this Opinion, I consider that the Commission did not sufficiently substantiate its position that a private investor would have paid such additional redundancy payments in similar circumstances or, a fortiori, would have added the value of the escrow account to the sale price.

134.

SNCM also submits that the General Court wholly failed to substantiate or state the reasons for its analysis of the escrow account summarised in paragraph 144 of the judgment under appeal. In my view, the reasons why the General Court took the view that the escrow account conferred an indirect economic advantage on SNCM are quite clear from its line of reasoning.

135.

As Corsica Ferries points out, the General Court, in paragraph 137 of the judgment under appeal, adopted the same position as the Commission, that is to say that ‘the concept of aid does not necessarily mean that a legal obligation is borne, but rather that costs which are normally included in the budget of an undertaking are mitigated’. This is the case in relation to SNCM in the event of a further reduction in staff numbers.

136.

This is made even clearer in recitals 374 and 375 of the decision at issue, in which the Commission accepted that the setting up of the escrow account required the State to bear the cost of additional redundancy payments made to any employees laid off once SNCM was sold to the private purchasers.

137.

I therefore consider that the General Court provided a sufficient statement of reasons for its decision in that regard and conclude that the third part of the third ground of appeal raised by SNCM and the third ground of appeal raised by the French Republic must be dismissed.

138.

In recital 434 of the decision at issue, the Commission decided that the State aid granted in the form of a capital contribution of EUR 15.81 million ( 74 ) was compatible with the common market pursuant to Article 87(3)(c) EC.

139.

In paragraph 149 of the judgment under appeal, the General Court held that the Commission’s analysis of that balance for restructuring was based on the premiss that the 2006 privatisation plan was free of State aid elements. In paragraphs 152 and 153 of that judgment, the General Court concluded that, since the Commission had erred in law and committed manifest errors of assessment such as to call into question that premiss, the Commission’s analysis relating to the balance for restructuring was not properly supported.

140.

SNCM and the French Republic accept that the success of their fourth ground of appeal is dependent upon whether or not the Court decides to uphold the other grounds of appeal put forward in the present appeals.

141.

In the light of my foregoing analysis and my proposal that the Court dismiss the first three grounds of appeal raised by SNCM and the French Republic, I consider that the General Court rightly upheld the action for annulment of the decision at issue brought by Corsica Ferries.

142.

I therefore propose that the Court dismiss the fourth ground of appeal raised by SNCM and the French Republic.

143.

In the light of the foregoing considerations, I propose that the Court should: