Keywords
Summary

Keywords

1. Acts of the institutions Statement of reasons Obligation Scope Commission decision on State aid Judicial review

(EC Treaty, Arts 190 (now Article 253 EC) and 92 (now, after amendment, Art. 87 EC))

2. State aid Prohibited Derogations Aid that may be considered compatible with the common market Aid for restructuring an undertaking in difficulty Conditions Absence of a credible restructuring plan when aid granted Consequences

(EC Treaty, Arts 92(3)(c) (now, after amendment, Art. 87(3)(c) EC) and 93(2) (now Art. 88(2) EC))

Summary

1. The obligation to state reasons is an essential procedural requirement, as distinct from the question whether the reasons given are correct, which goes to the substantive legality of the contested measure. The statement of reasons required by Article 190 of the Treaty (now Article 253 EC) must be appropriate to the act at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent court to exercise its power of review. That requirement must be appraised by reference to the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 190 of the Treaty must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question.

In considering fulfilment of the obligation to state the reasons for a decision on State aid, it would be inappropriate to examine the substantive legality of the reasons relied on by the Commission to justify the contested decision. That examination falls within the scope of the examination as to whether Article 92 of the Treaty (now, after amendment, Article 87 EC) has been infringed.

( see paras 35-36, 38 )

2. As is clear from the Guidelines on State aid for rescuing and restructuring firms in difficulty, in order to be declared compatible with Article 92(3)(c) of the Treaty (now, after amendment, Article 87(3)(c) EC), aid to undertakings in difficulty must be bound to a restructuring programme designed to reduce or redirect their activities. Any such plan, which must be submitted to the Commission with all necessary clarifications, must make it possible to restore the long-term viability and health of the firm within a reasonable time scale and on the basis of realistic assumptions as to its future operating conditions whilst at the same time offsetting as far as possible adverse effects on competitors and ensuring that the aid is in proportion to restructuring costs and benefits. It is incumbent on the undertaking concerned to implement the restructuring plan, as accepted by the Commission, fully and the implementation and satisfactory progress of the plan must be monitored by the Commission, to which detailed annual reports must be submitted.

Consequently, in the absence of a credible restructuring plan, the Commission is justified in refusing to authorise the aid in question under the Guidelines.

( see paras 45, 49 )