Keywords
Summary

Keywords

1. State aid — Prohibited — Derogations — Aid for areas affected by the division of Germany — Scope of the derogation — Strict interpretation — Economic disadvantages caused by the isolation created by the frontier established between the two zones — (Art. 92(1) and (2)(c) of the EC Treaty (now, after amendment, Art. 87(1) and (2)(c) EC))

2. Acts of the institutions — Statement of reasons — Obligation — Scope — Decision consistent with previous decisions — Permissibility of summary statement of reasons — (Art. 190 of the EC Treaty (now Art. 253 EC))

3. State aid — Prohibited — Derogations — Aid which may be regarded as compatible with the common market — Aid to remedy serious disturbance in the economy of a Member State — Strict interpretation — Disturbance affecting the whole of the economy of the Member State concerned — (Art. 92 (3)(a), (b) and (c) of the EC Treaty (now, after amendment, Art 87(3)(a), (b) and (c) EC))

4. State aid — Planned aid — Power of assessment of the Commission — Review by the Court — Limits — (Art. 92(3) of the EC Treaty (now, after amendment, Art. 87(3) EC))

Summary

1. Since Article 92(2)(c) of the Treaty (now, after amendment, Article 87(2)(c) EC), under which " aid granted to the economy of certain areas of the Federal Republic of Germany affected by the division of Germany, in so far as such aid is required in order to compensate for the economic disadvantages caused by that division" , is compatible with the common market, was not repealed after the reunification of Germany either by the Treaty on European Union or by the Treaty of Amsterdam, it cannot, in the light of the objective scope of the rules of Community law, be presumed that it has been devoid of purpose since that reunification.

However, since it constitutes a derogation from the general principle laid down in Article 92(1) of the Treaty that State aid is incompatible with the common market, Article 92(2)(c) must be interpreted strictly.

On this point, since the expression " division of Germany" refers historically to the establishment of the dividing line between the two occupied zones in 1948, the " economic disadvantages caused by that division" can only mean the economic disadvantages caused in certain areas of Germany by the isolation which the establishment of that physical frontier entailed, such as the breaking of communication links or the loss of markets as a result of the breaking-off of commercial relations between the two parts of German territory.

By contrast, to interpret Article 92(2)(c) of the Treaty as permitting full compensation for the undeniable economic backwardness suffered by the new Länder would disregard both the nature of that provision as a derogation and its context and aims, and would have the consequence of breaking the direct link which must necessarily exist between the economic disadvantage and the geographical division of Germany.

Since it is only the economic disadvantages directly caused by the geographical division of Germany which may be compensated for within the meaning of that provision, Article 92(2)(c) of the Treaty cannot be interpreted as covering situations which are not the direct consequences of the former existence of the inter-German frontier but which are to a large extent the specific result of the economic policies of the German Democratic Republic.

The differences in development between the original and the new Länder are explained by causes other than the geographical split caused by the division of Germany, in particular by the different politico-economic systems set up in each part of Germany.

see paras 64-75

2. 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, so 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. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure, 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. Similarly, the Commission is not required to address, in the reasoning of a decision, all the issues of fact and law raised by the persons concerned, where it has taken account of all the circumstances and all the relevant factors of the case.

Where a decision has been adopted in a context with which the government concerned is familiar and forms part of a consistent decision-making practice, it can be reasoned in a summary manner.

see paras 87, 89, 92, 110, 140

3. Article 92(3)(b) of the Treaty (now, after amendment, Article 87(3)(b) EC), unlike subparagraphs (a) and (c) of that paragraph, requires that, for State aid to be capable of being considered compatible with the common market, it must be intended to remedy a serious disturbance in the whole economy of a Member State, not merely that of some regions or areas of that State. As a derogation, Article 92(3)(b) of the Treaty must be interpreted strictly.

see paras 105-108

4. Since the Commission enjoys a wide discretion in the application of Article 92(3) of the Treaty (now, after amendment, Article 87(3) EC), review by the Court is limited to verifying the accuracy of the facts relied on to make the disputed classification and ascertaining that there was no manifest error of assessment.

The Commission cannot be accused of making such an error where, when drawing the distinction which it is entitled to draw, at the level of the operating costs of an industrial site, between the position where a complete infrastructure has to be set up and that where such an infrastructure already exists, in connection with the costs of an investment carried out in several stages which is the subject of State aid, it takes the view that once the first stage is completed the following stages constitute extensions rather than operations at a new site.

see paras 129, 131-132