Keywords
Summary

Keywords

1. Actions for failure to fulfil obligations - Non-compliance with a Commission decision concerning State aid - Pleas in defence - Plea questioning the lawfulness of the decision - Not admissible - Limits - Non-existent act

(EC Treaty, Arts 93(2), second subpara., 169, 170 and 175 (now Art. 88(2), second subpara., EC, 226 EC, 227 EC, and 232 EC) and Art. 173 (now, after amendment, Art. 230 EC))

2. Actions for failure to fulfil obligations - Non-compliance with a Commission decision concerning State aid - Pleas in defence - Absolute impossibility of implementation - Limits

(EC Treaty, Arts 93(2), second subpara. (now Art 88(2), second subpara., EC)

3. State aid - Commission decision declaring aid to be incompatible with the common market - Difficulties in implementation - Obligation on the Commission and the Member State to cooperate in seeking a solution consistent with the Treaty

(EC Treaty Arts 5 and 93(2), first subpara. (now Arts 10 EC and 88(2), first subpara., EC))

4. State aid - Definition - Intervention having the effect of mitigating the charges of an undertaking - No transfer of State resources to the beneficiary - State guarantee granted to an undertaking obtaining a loan

(EC Treaty, Art. 92(1) (now, after amendment, Art 87(1) EC))

5. State aid - Recovery of unlawful aid - Application of national law - Conditions and limitations - Interests of the Community to be taken into account

(EC Treaty, Art. 93(2), first subpara., (now Art. 88(2), first subpara., EC))

Summary

1. The system of remedies set up by the Treaty distinguishes between the actions under Articles 169 and 170 of the Treaty (now Articles 226 and 227 EC), which are directed to obtaining a declaration that a Member State has failed to fulfil its obligations, and those under Articles 173 of the Treaty (now, after amendment, Article 230 EC) and Article 175 of the Treaty (now Article 232 EC), which are directed to obtaining judicial review of measures adopted by the Community institutions, or of failure to act on their part. Those remedies have different objectives and are subject to different rules. In the absence of a provision of the Treaty expressly permitting it to do so, a Member State cannot, therefore, properly plead the unlawfulness of a decision addressed to it as a defence in an action for a declaration that it has failed to fulfil its obligations arising out of its failure to implement that decision. The position could be different only if the measure in question contained particularly serious and manifest defects such that it could be deemed non-existent.

That also applies to an action for failure to fulfil obligations based on the second subparagraph of Article 93(2) of the Treaty (now Article 88(2), second subparagraph, EC).

( see paras 34-36 )

2. The only defence available to a Member State in opposing an application by the Commission under Article 93(2) of the Treaty (now Article 88(2), second subparagraph, EC) for a declaration that it has failed to fulfil its Treaty obligations is to plead that it was absolutely impossible for it to implement the decision properly. In that regard, apprehension of even insuperable internal difficulties cannot justify a failure by a Member State from complying with its obligations under Community law.

In particular, the financial difficulties with which undertakings in receipt of aid could be confronted as a result of its withdrawal do not make it absolutely impossible, for the Member State concerned, to implement the Commission's decision finding that the aid is incompatible with the common market and ordering that it be repaid.

That finding also applies with regard to the risk allegedly run by the Member State of incurring liability as a result of the unilateral withdrawal of a guarantee granted to an undertaking which has obtained a loan from private banks.

( see paras 39, 52-53 )

3. Where a Member State, when implementing a Commission decision relating to State aid, encounters unforeseen and unforeseeable difficulties or becomes aware of consequences not contemplated by the Commission, it must submit those problems for consideration by the Commission, together with proposals for suitable amendments to the decision in question. In such a case the Commission and the Member State concerned must respect the principle underlying Article 5 of the Treaty (now Article 10 EC), which imposes a duty of genuine cooperation on the Member States and the Community institutions, and must work together in good faith with a view to overcoming difficulties whilst fully observing the Treaty provisions, and in particular the provisions on aid.

( see para. 40 )

4. The concept of aid is more general than that of subsidy because it embraces not only positive benefits, such as subsidies, but also measures which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which, therefore, without being subsidies in the strict sense of the word, are similar in character and have the same effect. It follows that, in order for a measure to constitute aid within the meaning of Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC), it is not necessary for there to have been a transfer of resources from the State to the beneficiary. That is the case where a guarantee has been granted by the State to an undertaking obtaining a loan from private banks.

( see paras 44-45 )

5. Although, in the absence of Community provisions relating to the procedure applicable to the recovery of illegal aid, such recovery must take place, in principle, in accordance with the relevant provisions of national law, such provisions must none the less be applied in such a way that the recovery required by Community law is not rendered practically impossible and the interests of the Community are taken fully into consideration.

( see para. 55 )