Keywords
Summary

Keywords

++++

1. State aid ° Prohibition ° Derogations ° Commission decision making authorization to pay aid dependent on prior repayment by the undertaking concerned of unlawful aid previously received ° Condition laid down in order to avoid an accumulation of aid altering trading conditions in a way contrary to the general interest ° Decision within the power of the Commission

(EEC Treaty, Arts 92(3)(c), 93(2) and 169)

2. State aid ° Respective powers of the Community and of the Member States ° Commission' s power to adopt a decision making the payment of aid dependent on prior repayment of unlawful aid, despite the fact that the undertaking concerned disputes the existence of an obligation to repay on the ground of the protection of legitimate expectations by national law and of national rules of administrative procedure

(EEC Treaty, Art. 92(3)(c) and 93(2))

3. State aid ° Prohibition ° Derogations ° Aid which may be regarded as compatible with the common market ° Discretion of the Commission ° Review by the Court ° Limits

(EEC Treaty, Art. 92(3))

4. Plea of illegality ° Raised in relation to an act against which the applicant has not brought an action for annulment within the period prescribed ° Not admissible

(EEC Treaty, Arts 173 and 184)

Summary

1. The Commission does not exceed its powers where, having examined planned aid which a Member State is proposing to grant to an undertaking, it adopts a decision authorizing that aid pursuant to Article 92(3)(c) of the Treaty, but prohibits payment thereof until the undertaking has repaid aid previously received which has been found to be unlawful, by a decision of the Commission which has become final, on the grounds of both failure to give prior notification and incompatibility with the common market.

First, the power vested in the Commission under Article 93(2) of the Treaty to decide that an aid must be altered necessarily implies that a decision authorizing aid under Article 92(3)(c) of the Treaty may be made subject to conditions for ensuring that authorized aid does not alter trading conditions in a way contrary to the general interest. Secondly, the risk of such alteration must be assessed in the light of all the relevant factors, including the possible cumulative effect of the previous aid and the new aid, and the non-repayment of the previous unlawful aid. Lastly, in laying down such a condition, the Commission cannot be regarded as having followed a procedure not provided for by the Treaty in order to obtain actual repayment of the unlawful aid, when the remedies for infringement under Article 93(2) and Article 169 of the Treaty were available to it, since, as the reasons given in the decision make clear, having to rule on planned aid its intention was not to find that a previous decision had been infringed but to ensure, as it was required to do, that the planned aid did not have consequences rendering it incompatible with the common market.

2. In adopting a decision which, in order that trading conditions are not altered in a way contrary to the general interest, makes payment of aid to an undertaking subject to the prior repayment by that undertaking of aid which the Commission, in a decision which has become final, has found to be unlawful on the grounds of failure to give prior notification and of incompatibility with the common market, the Commission did not act in disregard of the division of powers between the Community and the Member States, despite the existence in national law governing repayment in the case in point of a principle of protection of legitimate expectations relied upon by the undertaking before the national court and of a national rule of administrative procedure laying down, in respect of the revocation of administrative acts, a time-limit which was exceeded in the case.

First, the Commission' s exercise of its powers cannot be paralysed by the existence of national proceedings, the effect of which cannot be to constrain the Commission to authorize payment of aid which, added to unlawful aid which has not been repaid, would be incompatible with the common market. Secondly, the provisions of national law, both those protecting legitimate expectations and those laying down a time-limit within which an administrative act creating rights may be revoked, cannot be applied so as to render practically impossible the recovery of sums required by Community law; only in exceptional circumstances within the meaning of Community law may a recipient of aid which is unlawful on the ground that no prior notification was given rely on the protection of legitimate expectations.

3. Article 92(3) of the Treaty confers on the Commission, for the purpose of deciding whether aid may be regarded as compatible with the common market, a discretion the exercise of which entails complex assessments of an economic and social nature which must be made in a Community context. The Court must therefore limit its review of such an assessment to ascertaining that the rules of procedure have been complied with, that the reasoning is sufficient, the facts are correct, and that there is no manifest error of assessment or misuse of power.

4. The objection of illegality provided for by Article 184 of the Treaty cannot be raised by a natural or legal person in relation to a measure against which the person could have brought proceedings under the second paragraph of Article 173 of the Treaty but did not do so within the period prescribed therein.