Keywords
Summary

Keywords

1. State aid - Planned aid - Review by the Commission - Preliminary stage and inter partes stage - Compatibility of aid with the common market - Difficulties in assessing compatibility - Commission's obligation to initiate the inter partes procedure - Definition - Serious difficulties - Objective nature

(EC Treaty, Art. 93(2) and (3) (now Art. 88(2) and (3) EC))

2. State aid - Prohibition - Derogations - Aid falling within the derogation provided for by Article 92(3)(c) of the Treaty (now, after amendment, Article 87(3)(c) EC) - Assessment of the ability of a restructuring plan to restore the long-term viability of the undertaking within a reasonable period of time

(EC Treaty, Art. 92(3)(c) (now, after amendment, Art. 87(3)(c) EC))

3. State aid - Planned aid - Review by the Commission - Preliminary stage and inter partes stage - Compatibility of aid with the common market - Difficulties in assessing compatibility - Commission's obligation to initiate the inter partes procedure - Review of measures taking significantly longer than is usually required for a preliminary examination - Request for supplemental information put to the notifying State - Indications of serious difficulty

(EC Treaty, Art. 93(2) and (3) (now Art. 88(2) and (3) EC))

Summary

1. The procedure under Article 93(2) of the Treaty (now Article 88(2) EC) is obligatory if the Commission experiences serious difficulties in establishing whether or not aid is compatible with the common market. The Commission cannot therefore limit itself to the preliminary procedure under Article 93(3) of the Treaty (now Article 88(3) EC) and take a favourable decision on a State measure which has been notified unless it is in a position to reach the firm view, following an initial investigation, that the measure cannot be classified as aid within the meaning of Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC) or that the measure, whilst constituting aid, is compatible with the common market. On the other hand, if the initial analysis results in the Commission taking the contrary view of the aid's compatibility with the common market or does not enable all the difficulties raised by the assessment of the measure in question to be overcome, the Commission has a duty to gather all necessary views and to that end to initiate the procedure under Article 93(2) of the Treaty. It is for the Commission to decide, on the basis of the factual and legal circumstances of the case, whether the difficulties involved in assessing the compatibility of the aid require the initiation of that procedure.

That decision must satisfy three requirements. Firstly, under Article 93 of the Treaty the Commission's power to find aid to be compatible with the common market upon the conclusion of the preliminary procedure is restricted to aid measures that raise no serious difficulties. That criterion is thus an exclusive one. The Commission may not, therefore, decline to initiate the formal investigation procedure in reliance upon other circumstances, such as third party interests, considerations of economy of procedure or any other ground of administrative convenience. Secondly, where it encounters serious difficulties, the Commission must initiate the formal procedure, having no discretion in this regard. Whilst its powers are circumscribed as far as initiating the formal procedure is concerned, the Commission nevertheless enjoys a certain margin of discretion in identifying and evaluating the circumstances of the case in order to determine whether or not they present serious difficulties. In accordance with the objective of Article 93(3) of the Treaty and its duty of good administration, the Commission may, amongst other things, engage in talks with the notifying State or with third parties in an endeavour to overcome, during the preliminary procedure, any difficulties encountered. Thirdly, the notion of serious difficulties is an objective one. Whether or not such difficulties exist requires investigation of both the circumstances under which the contested measure was adopted and its content. That investigation must be conducted objectively, comparing the grounds of the decision with the information available to the Commission when it takes a decision on the compatibility of the disputed aid with the common market. It follows that judicial review by the Community Court of the existence of serious difficulties will, by nature, go beyond simple consideration of whether or not there has been a manifest error of assessment.

( see paras 42-45, 47 )

2. 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 linked to a restructuring programme designed to reduce or redirect their activities. In order for the Commission to be able to adopt a decision to raise no objection to a proposed grant of aid without initiating the formal investigation procedure, it must be in a position to assess the ability of the restructuring plan to restore the long-term viability of the undertaking concerned within a reasonable period of time and on the basis of realistic assumptions as to its future operating conditions.

( see paras 70-71 )

3. The fact that the time spent considerably exceeds the time usually required for a preliminary examination under Article 93(3) (now Article 88(3) EC) of the Treaty may, with other factors, justify the conclusion that the Commission encountered serious difficulties of assessment necessitating initiation of the procedure under Article 93(2) of the Treaty.

Where, in particular, the preliminary examination procedure is prolonged as a result of a Member State's reluctance to provide information which would assist the Commission, despite repeated requests on the latter's part, that can, by its very nature, indicate the existence of serious difficulties and the Commission is not entitled to rely on the fact that the notifying State itself is responsible for that situation. To permit it to do so would deprive interested third parties of the procedural guarantees conferred upon them by Article 93(2) of the Treaty: the Commission would be allowed to rely on the conduct or negligence of the notifying Member State in order to thwart the purpose of Article 93(3) of the Treaty, which requires it to initiate the formal examination procedure, and the Member State would be allowed to evade its duty of genuine cooperation.

( see paras 93, 98, 100 )