Keywords
Summary

Keywords

1. State aid - Definition - Security for an operating loan - Assessment criterion - Situation of the undertaking with regard to the capital market

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

2. State aid - Adverse effect on competition - Operating aid - Security for a bank loan for financing general operating costs

(EC Treaty, Art. 92(1) and (3) (now, after amendment, Art. 87(1) and (3) EC))

3. State aid - Examination by the Commission - Establishment of a framework for aid in a given sector - Rules applicable to the fisheries sector set out by the Commission in guidelines - Binding effect

(EC Treaty, Art. 93(1) (now Art. 88(1) EC))

4. State aid - Commission decision finding aid to be incompatible with the common market - Obligation to state reasons - Scope - Decision based on guidelines

(EC Treaty, Art. 92 (now, after amendment, Art. 87 EC) and Arts 93(3) and 190 (now Arts 88(3) EC and 253 EC))

5. Community law - Principles - Rights of the defence - Application to administrative procedures initiated by the Commission - Examination of aid plans - Scope

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

Summary

1. In order to determine the extent to which a security for an operating loan is in the nature of State aid, the relevant criterion is that indicated in the Commission's decision, namely whether the undertaking could have obtained the loan on the capital market without the security,

Thus where, owing to an undertaking's precarious financial circumstances, no credit institution would agree to lend to it without a State guarantee, the entire amount of the secured loan which it obtains must be regarded as aid.

( see paras 30-31 )

2. Aid corresponding to a typical general operating cost that a company must bear in its normal activities is operating aid. Security given by a regional authority for a bank loan intended to finance the general operating costs of an under

Operating aid by its very nature distorts competition and does not in principle fall within the scope of Article 92(3) of the Treaty (now, after amendment, Article 87(3) EC).

( see paras 49, 77-78, 90 )

3. The Commission may adopt a policy as to how it will exercise its discretion in the form of measures such as the Guidelines, in so far as those measures contain rules indicating the approach which the institution is to take and they do not depart from the rules of the Treaty.

The Guidelines for the examination of State aids in the fisheries and aquaculture sector are based on Article 93(1) of the Treaty (now Article 87(1) EC).They are thus one element of that obligation of regular, periodic cooperation from which neither the Commission nor a Member State can release itself.

( see paras 62, 64 )

4. The requirement to state reasons must be appraised on the basis of the particular features of the case in point, such as the content of the measure in question and the nature of the reasons given. Where State aid is involved, the fact that a decision finding aid to be incompatible with the common market is based on guidelines for the examination of aid in the sector in question may be of significance as regards the content of the obligation to state reasons.

With regard to a Commission decision finding aid in the fisheries sector incompatible with the common market, since the Commission had found that the measure constituted operating aid, it was not necessary to explain in minute detail why that aid distorted competition. The Guidelines for the examination of State aids in the fisheries and aquaculture sector establish that such a conclusion necessarily follows from the existence of operating aid.

( see paras 83-85 )

5. Observance of the rights of the defence is, in all procedures initiated against a person which are liable to culminate in a measure adversely affecting that person, a fundamental principle of Community law which must be guaranteed even in the absence of any specific rules. With regard to examination of aid by the Commission, that principle requires the Member State in question to be placed in a position in which it may effectively make known its views on the observations submitted by interested third parties under Article 93(2) of the Treaty (now Article 88(2) EC). In so far as the Member State had not been afforded the opportunity to comment on such observations, the Commission could not incorporate them in its decision against that State.

However, such an infringement of the rights of the defence results in annulment only if, had it not been for such an irregularity, the outcome of the procedure might have been different.

( see paras 99-101 )