Case C‑363/16

European Commission

v

Hellenic Republic

(Failure of a Member State to fulfil obligations — State aid — Aid declared unlawful and incompatible with the internal market — Obligation to recover — Second subparagraph of Article 108(2) TFEU — Regulation (EC) No 659/1999 — Article 14(3) — Undertaking benefiting from the aid declared insolvent — Insolvency proceedings — Registration of the liabilities in the schedule of liabilities — Cessation of activities — Suspension of insolvency proceedings for the purposes of examining the prospect of relaunching the business — Obligation to provide information — Failure to perform)

Summary — Judgment of the Court (First Chamber), 17 January 2018

1. State aid—Recovery of unlawful aid—Obligation—Duty to implement the Commission’s decision immediately and effectively

   (Arts 108(2) TFEU and 288 TFEU)

2. State aid—Recovery of unlawful aid—Application of national law—Conditions—Implementation of a procedure ensuring immediate and effective execution of the Commission’s decision

   (Art. 108(2) TFEU and 288 TFEU; Council Regulation No 659/1999, Recital 13 and Art. 14(3))

3. State aid—Recovery of unlawful aid—Obligation—Recipients in difficulty or bankrupt—Irrelevant

   (Art. 108(2) TFEU)

4. State aid—Recovery of unlawful aid—Undertakings which have received aid and which have become insolvent—Registration in the schedule of liabilities so as to restore the prior situation—Need to procced to the recovery of the aid or the winding-up of the undertaking within the period prescribed by the Commission

   (Art. 108(2) TFEU)

5. Actions for failure to fulfil obligations—Non-compliance with a Commission decision concerning State aid—Obligation to recover the aid granted—Reference period—Period established in the decision which has not been implemented, or subsequently, by the Commission

   (Arts 108(2) TFEU and 258 TFEU)

1.  See the text of the decision.

   (see para. 34)

2.  See the text of the decision.

   (see para. 35)

3.  In cases in which the unlawful State aid paid must be recovered from recipient undertakings which are in financial difficulty or are insolvent, such difficulties do not affect the obligation to recover. The Member State is therefore required, as the case may be, to bring about the winding-up of that company, to have its claim registered as one of that company’s liabilities or to take any other measure enabling the aid to be recovered.

   (see para. 36)

4.  Restoration of the previous situation and elimination of the distortion of competition resulting from unlawful aid may, in principle, be achieved through registration of the debt relating to the repayment of the aid in question in the schedule of liabilities. However, such registration can satisfy the recovery obligation only if, where the State authorities are unable to recover the full amount of aid, the insolvency proceedings result in the winding-up of the undertaking, that is to say, in the definitive cessation of its activities, which the State authorities are able to bring about in their capacity as shareholders or creditors. It follows that the definitive cessation of the activities of the undertaking receiving aid is necessary only where the recovery of the entire amount of the aid remains impossible throughout the insolvency proceedings.

   Moreover, delayed recovery, namely, after the period prescribed, cannot satisfy the requirements of the TFEU. It seems unlikely that the various steps in insolvency proceedings would normally be taken within the four-month period usually set by the Commission for the recovery of unlawful aid. In those circumstances, registration of the debt relating to the repayment of the aid in question in the schedule of liabilities must be regarded as being, in principle, an appropriate measure capable of ensuring the elimination of the distortion of competition, provided that such a measure is followed either by the recovery of the full amount of that aid or by the winding-up of the undertaking and the definitive cessation of its activities, if such recovery remains impossible throughout the insolvency proceedings. For such a measure to be effective, it must be carried out within the period prescribed by the Commission.

   (see paras 37-43)

5.  See the text of the decision.

   (see paras 45-48)