Keywords
Summary

Keywords

1. State aid — Definition — Aid from State resources — Aid granted by a private-law company owned essentially by a public authority — Resources of the undertaking constantly remaining under public control — Included — (Art. 87(1) EC)

2. State aid — Definition — Financial assistance granted by a Member State to a public or private undertaking — Assessment on the basis of the private investor criterion — Account to be taken of the context in which aid was granted — (Art. 87(1) EC)

3. State aid — Definition — Private investor test put into practice — Commission's power of assessment — Judicial review — Limits — (Art. 87(1) EC)

4. State aid — Recovery of unlawful aid — Obligation resulting from unlawfulness — Subject-matter — Restoration of the previous legal situation — (Art. 88(2) EC)

5. State aid — Recovery of unlawful aid — Procedures for recovery — Conduct of a private creditor — Obligation to use all the legal means available, including liquidation of the beneficiary — (Art. 88(2) EC)

6. State aid — Recovery of unlawful aid — Determination of the debtor where assets are transferred to a subsidiary — Economic continuity test — (Art. 88(2) EC)

Summary

1. The financial resources of a private-law company owned essentially by a public authority, and which acts under the control of that authority, may be categorised as State resources within the meaning of Article 87(1) if they constantly remain under public control and therefore available to the competent national authorities.

see para. 33

2. The notion of State aid within the meaning of Article 87 EC can encompass not only positive benefits such as, inter alia, subsidies, loans or direct investment in the capital of enterprises, but also interventions which in various forms mitigate the charges which are normally included in the budget of an undertaking and which therefore, without being subsidies in the strict sense of the word, are of the same character and have the same effect.

Pursuant to the principle that the public and private sectors are to be treated equally, however, capital placed directly or indirectly at the disposal of an undertaking by the State in circumstances which correspond to normal market conditions cannot be regarded as State aid.

Thus, in order to determine whether investment by the public authorities in the capital of an undertaking, in whatever form, may constitute State aid, 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, having regard in particular to the information available and foreseeable developments at the date of those contributions.

see paras 35-38

3. Judicial review of an act necessitating a complex economic appraisal, in which the Commission puts into practice the private investor test in order to ascertain whether investment by the public authorities in the capital of an undertaking constitutes State aid, must be confined to verifying whether the Commission complied with the relevant rules governing procedure and the statement of reasons, whether the facts on which the contested finding was based have been accurately stated and whether there has been any manifest error of assessment or a misuse of powers.

see para. 39

4. The recovery of unlawful aid is the logical consequence of a finding that it is unlawful.

see paras 53, 66

5. To ensure that a Commission decision ordering the recovery of State aid incompatible with the common market is implemented correctly, the Member State is required to act as if it were a private creditor. It must recover the aid without delay, using all the legal means at its disposal, including seizure of the beneficiary's assets and, where necessary, its liquidation.

see paras 68-69

6. The possibility of a company in economic difficulties taking measures to rehabilitate the business cannot be ruled out a priori because of requirements relating to recovery of State aid which is incompatible with the common market.

However, if it were permissible, without any condition, for an undertaking experiencing difficulties and on the point of being declared bankrupt to create, during the formal inquiry into the aid concerning it individually, a subsidiary to which it then transfers its most profitable assets before the conclusion of the inquiry, that would amount to accepting that any company may remove such assets from the parent undertaking when aid is recovered, which would risk depriving the recovery of aid of its effect in whole or in part.

In order to prevent the effectiveness of the decision from being frustrated and the market from continuing to be distorted, the Commission may be compelled to require that the recovery is not restricted to the original firm but is extended to the firm which continues the activity of the original firm, using the transferred means of production, in cases where certain elements of the transfer point to economic continuity between the two firms.

see paras 76-78