Keywords
Summary

Keywords

State aid - Existing aid and new aid - Classification as new aid - Effects

(Art. 88(1), (2) and (3) EC; Council Regulation No 659/1999, Arts 17 to 19)

Summary

$$Where the Commission decides to initiate the procedure under Article 88(2) EC in relation to a measure in the course of implementation which it classifies as new aid, whereas the Member State concerned maintains that it is existing aid, the choice made by the Commission entails independent legal effects, particularly in relation to the suspension of the measure concerned, so that an action by the Member State concerned for the annulment of that decision cannot be regarded as devoid of purpose.

The decision which marks the beginning of the procedure under Article 88(2) EC produces different effects according to whether the aid in question is new or existing aid. Whereas, in the former case, the Member State is prevented from implementing the aid proposal submitted to the Commission, that prohibition does not apply where the aid is existing aid.

Even if the classification of the aid corresponds to an objective situation which does not depend on the assessment made at the stage of the initiation of the procedure under Article 88(2) EC, the fact that the Commission regards an aid as new implies that it does not intend to examine the aid in the context of the permanent examination of existing aid schemes provided for by Article 88(1) EC and Articles 17 to 19 of Regulation No 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty (now Article 88 EC). That signifies that the Commission is not proposing to the Member State concerned appropriate measures for adapting the aid to the progressive development or functioning of the common market as provided for by those provisions before initiating the procedure, and that, from its point of view, the aid has been and is being unlawfully implemented, in disregard of the suspensory effect, in relation to new aid, which follows from the last sentence of Article 88(3) EC.

Moreover, such a decision to initiate the procedure under Article 88(2) EC in relation to a measure in the course of implementation and classified as new aid necessarily alters the legal position of the measure under consideration and that of the undertakings which are its beneficiaries, particularly as regards the pursuit of its implementation. Whereas, until the adoption of such a decision, the Member State, the beneficiary undertakings and other economic operators may think that the measure is being lawfully carried out as an existing aid, after its adoption there is at the very least a significant element of doubt as to the legality of that measure which, without prejudice to the possibility of seeking interim relief from the court with the power to grant it, must lead the Member State to suspend payment, since the initiation of the procedure under Article 88(2) EC excludes the possibility of an immediate decision holding the measure compatible with the common market which would enable it to be lawfully pursued. Such a decision might also be invoked before a national court called upon to draw all the consequences arising from the infringement of the last sentence of Article 88(3) EC. Finally, it is capable of leading the undertakings which are beneficiaries of the measure to refuse new payments in any event, or to hold the necessary sums as provision for possible subsequent repayments. Businesses will also take account, in their relations with those beneficiaries, of the fragile legal and financial situation of the latter.

( see paras 56-59, 62, 65 )