Keywords
Summary

Keywords

1 Preliminary rulings - Jurisdiction of the Court - Limits - State aid - Role of the national courts - To ensure that the rights of individuals are fully safeguarded - Possibility of consulting the Commission or of making a reference to the Court for a preliminary ruling

(EC Treaty, Art. 92 (now, after amendment, Art. 87 EC) and Arts 93(3) and 177 (now Arts 88(3) EC and 234 EC))

2 State aid - Concept - Application to large industrial undertakings which are insolvent of a system derogating from the rules of ordinary law relating to insolvency - Covered - Conditions

(EC Treaty, Art. 92 (now, after amendment, Art. 87 EC))

3 State aid - Existing aid and new aid - Notification to the Commission - Implementation before the Commission decision - Prohibited - Scope of that prohibition

(EC Treaty, Art. 92 (now, after amendment, Art. 87 EC) and Art. 93 (now Art. 88 EC))

Summary

1 Within the framework of proceedings brought under Article 177 of the EC Treaty (now Article 234 EC), the Court does not have jurisdiction to interpret national law or to give a ruling on the compatibility of a national measure with Community law.

However, as regards the review of Member States' compliance with their obligations under Article 92 of the Treaty (now, after amendment, Article 87 EC) and Article 93 thereof (now Article 88 EC), a national court may, in order to determine whether a State measure introduced without taking account of the preliminary examination procedure laid down in Article 93(3) of the Treaty should have been subject to that procedure, have cause to interpret the concept of aid contained in Article 92 of the Treaty. If it has doubts as to whether the measure in question should be classified as State aid, it may ask the Commission for clarification on that point or, in accordance with the second and third paragraphs of Article 177 of the Treaty, it may or must refer a question to the Court for a preliminary ruling on the interpretation of Article 92 of the Treaty.

2 The concept of aid is wider than that of a subsidy because it embraces not only positive benefits, such as subsidies themselves, but also measures which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which, without therefore being subsidies in the strict sense, are similar in character and have the same effect. Moreover, the expression `aid', within the meaning of Article 87(1) of the Treaty (now, after amendment, Article 92(1) EC), necessarily implies advantages granted directly or indirectly through State resources or constituting an additional charge for the State or for bodies designated or established by the State for that purpose.

Application of a system derogating from the rules of ordinary law relating to insolvency, for the benefit of large industrial undertakings in difficulties which owe particularly large debts to certain, mainly public, classes of creditors, is to be regarded as giving rise to the grant of State aid, within the meaning of Article 92(1) of the Treaty, where it is established that the undertaking

- has been permitted to continue trading in circumstances in which it would not have been permitted to do so if the rules of ordinary law relating to insolvency had been applied, or

- has enjoyed one or more advantages, such as a State guarantee, a reduced rate of tax, exemption from the obligation to pay fines and other pecuniary penalties or de facto waiver of public debts wholly or in part, which could not have been claimed by another insolvent undertaking under the application of the rules of ordinary law relating to insolvency.

3 It is clear from both the terms and purposes of Article 93 of the Treaty (now Article 88 EC) that the concept of existing aid within the meaning of Article 93(1) embraces aid which existed before the entry into force of the Treaty and aid which could be properly put into effect under the conditions laid down in Article 93(3) thereof, including aid notified to the Commission but in respect of which the Commission has not yet adopted a position, after a reasonable length of time has elapsed for reflection and investigation, as regards the compatibility of the aid planned with the common market, as is clear from the Court's interpretation of Article 93(3) in Case 120/73. On the other hand, measures to grant or alter aid, where the alterations may relate to existing aid or to initial plans notified to the Commission, must be regarded as new aid subject to the obligation of notification laid down by Article 93(3).

Consequently, where it is established that a system derogating from the rules of ordinary law relating to insolvency is in itself capable of giving rise to the grant of State aid within the meaning of Article 92(1), that system cannot be put into operation unless it has been notified to the Commission and, if it has been so notified, before the Commission has made a decision acknowledging that the aid plan is compatible with the common market, or, if the Commission takes no decision within a period of two months from the notification, before that period has expired.