Keywords
Summary

Keywords

1. State aid – Effect on trade between Member States – Adverse effect on competition – Criteria for assessment – Aid scheme

(Art. 87(1) EC; Commission Regulation No 70/2001, Art. 5)

2. State aid – Prohibition – Exceptions – Aid categories, set out in legislation, which can be regarded as compatible with the common market – Regulation No 70/2001 on aid for small and medium-sized enterprises – Possibility to review the aid in the light of the criteria defined by Article 87(3) EC

(Arts 87(3) EC and 88(3) EC; Commission Regulation No 70/2001)

3. State aid – Prohibition – Exceptions – Aid which may be considered compatible with the common market – Discretion of the Commission – Possibility of adopting guidelines – Individual assessment outside the guidelines – Admissibility

(Art. 87(3) EC)

4. State aid – Prohibition – Exceptions – Aid which may be considered compatible with the common market – Discretion of the Commission – Judicial review – Limits

(Art. 87(3)(c) EC)

5. State aid – Prohibition – Exceptions – Aid for certain areas affected by the division of Germany – Scope of the derogation – Restrictive interpretation

(Art. 87(1) and (2)(c) EC)

6. State aid – Prohibition – Exceptions – Aid which may be considered compatible with the common market – Operating aid – Exclusion

Summary

1. For the purposes of categorising a national measure as State aid, it is not necessary to demonstrate that the aid has a real effect on trade between Member States and that competition is actually being distorted, but only to examine whether that aid is liable to affect such trade and distort competition. More particularly, in the case of an aid programme, the Commission may confine itself to examining the characteristics of the programme in question in order to determine whether, by reason of the high amounts or percentages of aid, the nature of the investments for which aid is granted or other 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.

In the case of aid to small and medium-sized enterprises, the intensity of which is between 50 and 80% depending on the subprogramme and depending on the area in which the recipient undertaking was situated, it is clear that that aid is capable of distorting intra-Community trade. According to Article 5 of Regulation No 70/2001 on the application of Articles 87 EC and 88 EC to State aid to small and medium sized enterprises, aid to small and medium-sized enterprises is compatible with the common market if it does not exceed 50% of the costs of the services received.

(see paras 30-32)

2. The object of Regulation No 70/2001 on the application of Articles 87 EC and 88 EC to State aid to small and medium sized enterprises is to declare compatible with the common market by reference to Article 87(3) EC, and thus to exempt from the obligation to notify laid down in Article 88(3) EC, all individual aid and aid schemes in favour of small and medium-sized enterprises which satisfy the conditions defined in that regulation. That does not mean that no aid in favour of small and medium-sized enterprises can be declared compatible with the common market following an examination by the Commission by reference to the criteria defined in Article 87(3) EC, following notification by a Member State pursuant to Article 88(3) EC. Indeed, recital 4 to Regulation No 70/2001 states that ‘[t]his Regulation is without prejudice to the possibility for Member States of notifying aid to small and medium-sized enterprises’ and that ‘[s]uch notifications will be assessed by the Commission in particular in the light of the criteria set out in this Regulation’.

(see paras 42-43)

3. The Commission can establish general implementing measures which structure the way in which it exercises the discretion conferred on it by Article 87(3) EC. However, it cannot wholly deprive itself of that discretion where it assesses a specific case, and that is particularly so in relation to cases which it has not expressly referred to, or indeed has not regulated, in those general implementing rules. That discretion is therefore not exhausted by the adoption of such general rules and there is, in principle, no obstacle to an individual assessment outside the context of those rules, provided, however, that the Commission complies with the higher rules of law, such as the rules of the Treaty and the general principles of Community law.

(see para. 44)

4. The Commission’s assessment of an aid programme must necessarily be based on the facts, economic analyses and evidence submitted by the applicant at the stage of the administrative procedure preceding the adoption of the contested decision. The review by the Community judicature of complex economic assessments made by the Commission must necessarily be 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 of the facts or misuse of powers.

(see para. 55)

5. Article 87(2)(c) EC, which concerns aid granted to the economy of certain areas of the Federal Republic of Germany affected by the division of Germany, must be interpreted restrictively, in that the economic disadvantages caused by that division can only mean the economic disadvantages caused in certain areas of Germany by the isolation which the establishment of that physical frontier entailed, such as the breaking of communication links or the loss of markets as a result of the breaking off of commercial relations between the two parts of German territory. General references to the economic consequences of the division of Germany cannot serve to justify the compatibility with Article 87(3)(c) EC of aid the intensity of which exceeds that provided for in Regulation No 70/2001 on the application of Articles 87 EC and 88 EC on State aid for small and medium-sized enterprises.

(see paras 78-79)

6. Winning new markets and also efforts to remain on the market are part of the normal strategy of each enterprise wishing to maintain a lasting presence on the market. Expenditure is necessary in order to permit that continuous and extended presence on the market and State aid granted for those purposes will necessarily reduce the current expenditure of the small and medium-sized enterprises. Those contributions therefore come within the category of operating aid, incompatible with the common market.

(see paras 102, 105)