1. 

By order of 18 June 2002 the Court ordered the reopening of the oral procedure in the present case.

2. 

In the order the Court stated that the Ferring judgment ( 2 ) of 22 November 2001 had been delivered after submission of the parties' oral observations and could affect the answer to the questions referred by the Bundesverwaltungsgericht (Federal Administrative Court, Germany) for a preliminary ruling. The Court also observed that the judgment in Ferring was discussed in my Opinion of 19 March 2002 in the present case and in the Opinion of Advocate General Jacobs in the GEMO case. ( 3 )

3. 

The Court therefore arranged a further hearing to give the parties in the main proceedings, the Member States, the Commission and the Council an opportunity to state their position on the effect of the Ferring judgment. It asked them for their views on whether — and according to what criteria — a financial advantage granted by the authorities of a Member State to offset the cost of the public service obligations they impose on an undertaking must be classified as State aid within the meaning of Article 92(1) of the EC Treaty (now, after amendment, Article 87(1) EC).

4. 

The question of the Community rules applicable to the financing of public services has been the subject of a number of statements of position at the political level. ( 4 ) It is also the subject of controversy among the Advocates General of the Court ( 5 ) and in academic writing. ( 6 ) These different positions are well known, so that there is no need to repeat them. On the other hand, before supplementing my Opinion of 19 March 2002, I will give a brief account of the arguments put forward by the parties.

5.

In addition to the parties in the main proceedings, six Member States took part in the reopened oral procedure. These were the Federal Republic of Germany, the Kingdom of Denmark, the French Republic, the Kingdom of the Netherlands, the Kingdom of Spain and the United Kingdom of Great Britain and Northern Ireland. The Commission also submitted observations. The Council did not appear.

6.

The argument before the Court has made it possible to divide the parties into two distinct groups.

7.

The first group consists of Altmark Trans GmbH, the Regierungspräsidium Magdeburg, the Federal Republic of Germany, the French Republic and the Kingdom of Spain. They propose that the Court should follow the compensation approach ( 7 ) adopted in Ferring. Under that approach, State financing of public services constitutes aid within the meaning of Article 92(1) of the Treaty only if, and to the extent that, the advantages conferred by the public authorities exceed the cost incurred in discharging public service obligations.

8.

In support of their contention, they put forward essentially three series of arguments, which may be summarised as follows: ( 8 )

9.

The second group consists of the Kingdom of Denmark, the Kingdom of the Netherlands and the United Kingdom. They propose that the Court should adopt the approach of Advocate General Jacobs in his Opinion in GEMO ( 9 ) (‘the quid pro quo approach’).

10.

Under that approach, the Court would distinguish between two categories of situation. Where there was a direct and manifest link between the State financing and clearly defined public service obligations, the sums paid by the State would not constitute aid within the meaning of Article 92(1) of the Treaty. On the other hand, where there was no such link or the public service obligations were not clearly defined, the sums paid by the public authorities would constitute aid within the meaning of that provision.

11.

The Commission for its part has not expressed a view on the point. It may be noted, however, that in the Ferring ( 10 ) and GEMO ( 11 ) cases it came out in favour of the State aid approach. ( 12 ) Under that approach, State financing of public services constitutes aid within the meaning of Article 92(1) of the Treaty. That aid may, however, be justified on the basis of Article 90(2) of the EC Treaty (now Article 86(2) EC). ( 13 )

12.

In my Opinion of 19 March 2002, I came down in favour of the State aid approach. It may be of use to state at the outset that the arguments put forward by the parties have not caused me to alter my position.

13.

I will therefore confine myself to considering the new questions raised by the arguments of the parties. Those questions relate to:

14.

I will not, on the other hand, return to the arguments I set out in my earlier Opinion. I therefore refer the Court to that Opinion.

15.

The first group of parties point out that, according to the case-law, not all State intervention constitutes aid within the meaning of Article 92(1) of the Treaty. Thus where the State purchases goods (for example, computers) or services (for example, cleaning services), there is aid only if, and to the extent that, the remuneration paid by the State exceeds the market price.

16.

They consider that the same principle must apply in the field of public services. In their view, financing by the State must be classified as aid only if, and to the extent that, the advantages conferred by the public authorities exceed the cost of complying with the public service obligations (that is, the normal price of the services provided). ( 14 )

17.

The parties' argument amounts in substance to applying the criterion of the private investor in the field of State financing of public services.

18.

As is well known, the criterion of the private operator ( 15 ) was originally developed by the Commission for determining whether investment by the State in the capital of an undertaking constitutes aid within the meaning of Article 92(1). ( 16 ) Under that criterion, the Commission considers that such an investment is not aid where the public authorities effect it under the same conditions as a private investor operating under normal market economy conditions. ( 17 ) The Court took up the criterion in its case-law ( 18 ) and then applied it to other kinds of State measures. To assess whether a measure contains an element of aid, the Court thus examines whether a private operator of comparable size to the public bodies would have carried out the operation in question under the same conditions.

19.

Unlike the parties, I consider that this criterion cannot be applied to State financing of public services.

20.

It appears from the case-law that in the field of State aid the Court distinguishes between two categories of situation: those where the intervention of the State is of an economic nature and those where it forms part of the exercise of public powers.

21.

The Court applies the private operator criterion only in situations in the first category. These cover cases where the public authorities contribute capital to an undertaking, ( 19 ) grant a loan to certain undertakings, ( 20 ) provide a State guarantee, ( 21 ) sell goods or services on the market, ( 22 ) or grant facilities for the payment of social security contributions ( 23 ) or the repayment of wages. ( 24 ) In such situations the private operator criterion is material because the conduct of the State is capable of being adopted, at least in principle, by a private operator acting with a view to profit (an investor, a bank, a surety, an undertaking or a creditor). Application of that criterion is justified by the principle of equal treatment between the public and private sectors, ( 25 ) which requires that intervention by the State should not be subject to stricter rules than those applicable to private undertakings.

22.

On the other hand, the criterion of the private operator is not material where the intervention by the State has no economic character. That is the case where the public authorities pay a subsidy directly to an undertaking, ( 26 ) grant an exemption from tax ( 27 ) or agree to a reduction in social security contributions. ( 28 ) In situations of this kind, the intervention by the State cannot be adopted by a private operator acting with a view to profit but falls within the exercise of public powers of the State (such as tax policy or social policy). The private operator criterion is therefore not material, since, by definition, there cannot be any breach of equal treatment between the public and private sectors. ( 29 )

23.

It follows from the above that the private operator criterion does not applyto interventions by the State which fall within the exercise of public powers.

24.

The Court expressly confirmed that principle in the Spain v Commission judgment of 14 September 1994. ( 30 ) It held that, for the purpose of applying the private operator criterion, ‘a distinction must be drawn between the obligations which the State must assume as owner of the share capital of a company and its obligations as a public authority’. ( 31 ) The State's obligations as a public authority may not be taken into consideration for the purpose of applying the private investor criterion, ( 32 ) as otherwise unequal treatment of the public and private sectors would be introduced.

25.

It is common ground that the financing of public services is an activity which typically falls within the exercise of public powers. It is for the public authorities to define the services which are to be made available to the collectivity. It is also for them to taken the necessary measures to ensure the functioning and financing of those services. It is, moreover, hard to imagine a private operator embarking on his own initiative on such financing activity.

26.

Consequently, I consider that the private operator criterion cannot validly be applied to the financing of public services.

27.

The argument of the parties is thus based on a wrong comparison. It is not correct to compare cases where the State purchases goods or services on its own account with those where it ‘acquires’ services which are made available directly to the collectivity (namely public services). In the former case, the State conducts itself in a way which a private operator may adopt with a view to profit; whereas, in the latter case, the State acts as a public authority. ( 33 )

28.

The parties' second argument relates to the concept of ‘advantage’ in Article 92(1) of the Treaty.

29.

The concept of aid in Article 92(1) of the Treaty applies to State measures which confer a financial advantage on certain undertakings and distort or threaten to distort competition. To assess whether a measure constitutes aid, it must therefore be determined whether the undertaking receives an economic advantage which it would not have obtained under normal market conditions. ( 34 )

30.

In the present case, the parties submit that a State measure which merely offsets the cost of public service obligations does not constitute aid. In so far as the performance of public service obligations involves additional costs, the effect of such a measure is merely to replace the recipient undertaking in a position comparable to that of its competitors. The measure thus does not provide the recipient undertaking with any ‘real’ advantage and is therefore not liable to distort competition. It merely constitutes consideration for the public service obligations. ( 35 )

31.

On this point, it will be seen that the parties' argument is based on a specific understanding of the concept of aid. They adopt what may be described as a ‘net’ definition of aid or the ‘real’ advantage theory.

32.

In this approach, the advantages given by the public authorities are examined together with the obligations on the recipient of the aid. Public advantages thus constitute aid only if their amount exceeds the value of the commitments the recipient enters into.

33.

That docs not, however, correspond to the approach adopted by the authors of the Treaty in the field of State aid. The relevant provisions of the Treaty arc based on a ‘gross’ theory of aid or the ‘apparent’ advantage theory.

34.

Using this approach, the advantages given by the public authorities and what the recipient has to contribute in return must be examined separately. The existence of the contribution is of no relevance for determining whether the State measure constitutes aid within the meaning of Article 92(1). It comes into consideration only at a later stage of the analysis, for assessing whether the aid is compatible with the common market.

35.

The ‘gross’ theory of aid thus occurs in several provisions of the Treaty, in particular in Article 92(2) and (3), and in Article 77 of the EC Treaty (now Article 73 EC).

36.

Article 92(3) of the Treaty provides that aid may be regarded as compatible with the common market if it pursues certain objectives. Those objectives correspond essentially to those which the Treaties assign to the European Community or the European Union. ( 36 ) Examples are the strengthening of economic and social cohesion, the promotion of research and the protection of the environment.

37.

The Commission considered from the outset that, for aid to be compatible with the common market, the recipient must contribute something in return. ( 37 ) This contribution must intervene to compensate the distortion of competition caused by the grant of aid. ( 38 ) It is intended to ensure that the recipient acts in a way liable to contribute to the realisation of the objectives set out in Article 93(3) of the Treaty. The Commission considers that to authorise aid without requiring the contribution would amount to accepting distortions of competition without this being justified by the Community interest. ( 39 )

38.

The Commission's approach was expressly accepted by the Court in Philip Morris v Commission. ( 40 ) The Court held that, to be able to authorise aid under Article 92(3) of the Treaty, the Commission may require proof that the aid is necessary to ensure that the recipient undertakings act in such a way as to contribute to the realisation of the objectives referred to in that provision.

39.

In its practice the Commission therefore looks to see whether there is a contribution on the part of the recipient of the aid which can justify the grant of aid. ( 41 ) The contribution may take several forms. ( 42 )

40.

In some cases the activity aided may be seen at once to be a sufficient contribution, since it falls within the framework of a Community objective. In that case the contribution takes the form of an investment, such as the construction of a factory or a programme of research or training. In other cases the contribution is a condition for the approval of aid and takes a different form, such as a reduction of production capacity which contributes to solving a problem of overcapacity at Community level. In any event, the Commission requires a link, direct or indirect, between the aid and the operations which form the contribution. ( 43 ) It also requires the contribution provided by the recipient to be proportionate to the size of the aid paid out. ( 44 )

41.

It follows that, to be eligible for authorisation under Article 92(3) of the Treaty, aid must involve a contribution from the recipient, so that there is no net advantage for him in practice.

42.

Contrary to the submissions of the parties, the existence of this contribution does not affect the interpretation of the concept of aid.

43.

In the context of Article 92(1), the aid does not correspond to the difference between the public advantages and the value of the commitments entered into by the recipient. ( 45 ) The aid corresponds solely to the amount of the public advantages. What the recipient contributes in return comes in only at a further stage of the analysis, to assess the compatibility of the aid with the common market.

44.

An identical understanding of the concept of aid may be found in the provisions of the Treaty concerning land transport. Article 77 of the Treaty provides that ‘[a]ids shall be compatible with this Treaty... if they represent reimbursement for the discharge of certain obligations inherent in the concept of a public service’.

45.

That provision shows that, in the field of State financing of public services, the authors of the Treaty likewise adopted a ‘gross’ concept of aid. For them, the existence and amount of aid must be assessed solely by reference to the ‘financing entering’ ( 46 ) the undertaking. What the recipient agrees to in return — that is, the public service obligations — has no effect on the interpretation of the concept of aid. It merely constitutes a criterion for assessing the compatibility of the aid from the point of view of the derogating provisions of the Treaty.

46.

In view of the above factors, I consider that the Court cannot follow the compensation approach adopted in Ferring. Such an interpretation would amount to depriving of their effect all the derogating provisions of the Treaty concerning State aid. It amounts in fact to examining the compatibility of aid within the framework of Article 92(1) of the Treaty. ( 47 )

47.

Another solution might consist in restricting the compensation approach to the field of public services only. Two distinct concepts of aid would thus exist side by side in the Treaty. The view would be taken that:

48.

I believe, however, that such a solution risks creating serious problems in terms of legal certainty. Some State measures will be capable of falling under both concepts at the same time. That applies to financial advantages granted by the Member States to public broadcasting services. ( 48 )

49.

On the one hand, those advantages are intended to promote culture within the meaning of Article 92(3)(d) of the Treaty. By virtue of Article 92 of the Treaty and the ‘gross’ definition of aid, they will thus constitute aid which must be notified to the Commission and may be declared compatible with the common market. On the other hand, those same advantages are also intended to offset the cost of the public service obligations imposed on broadcasting institutions. By virtue of the compensation approach and the ‘net’ definition of aid, they will thus not be able to be categorised as aid within the meaning of Article 92(1) of the Treaty.

50.

It follows that, for measures of that kind, those concerned will all no longer be in a position to know whether the Treaty rules are applicable.

51.

Member States will not be able to identify the measures which must be notified to the Commission. Nor will undertakings know whether they can rely on the lawfulness of the State financing. National courts too will have difficulty in knowing whether to apply the Court's case-law on the direct effect of Article 93(3) of the Treaty. The Commission, finally, will not be able to determine with certainty whether it can start a procedure against an instance of State financing.

52.

In view of these various factors, I therefore consider that the State aid approach is much more appropriate for analysing State financing of public services. Like Articles 77 and 92 of the Treaty, this approach is based on a ‘gross’ definition of aid. It thus makes it possible to ensure the coherence of the Treaty provisions concerning State aid and to preserve the effect of the derogating provisions (namely Article 77, Article 90(2) and Article 92(2) and (3) of the Treaty).

53.

The third argument of the parties relates to the procedural obligations laid down in Article 93(3) of the Treaty.

54.

Before analysing this argument, a short summary of certain aspects of the Community procedure for reviewing aid will be of use.

55.

It is common ground that the Commission has exclusive competence to examine the compatibility of aid with the common market under Articles 92 and 93 of the Treaty. ( 49 ) That competence is justified by the fact that examining the compatibility of aid involves assessments of an economic and social nature which must be made in a Community context. ( 50 ) It is also justified by the fact that aid constitutes a sensitive area both for those concerned and for the functioning of the common market. The authors of the Treaty did not therefore wish to entrust the Member States with the function of assessing whether an aid presents risk for the common market. They entrusted that assessment to the European institution responsible for representing the Community interest. ( 51 )

56.

In Banco Exterior de España ( 52 ) the Court expressly held that the Commission's power extends to aid to undertakings entrusted with public service functions for the purposes of Article 90(2) of the Treaty. It follows that national courts do not have jurisdiction to apply Article 90(2) in the field of aid. ( 53 ) Only the Commission may authorise an aid under that provision.

57.

Under Article 93(3) of the Treaty, the Member States are obliged to notify their plans for introducing or altering aids (obligation to notify). They cannot implement those plans without the prior authorisation of the Commission (obligation to suspend). According to settled case-law, ( 54 ) these procedural obligations constitute the safeguard of the aid review machinery, which in turn is essential for ensuring the functioning of the common market.

58.

In France v Commission ( 55 ) the Court held that the notification and suspension obligations apply to aid to undertakings entrusted with the operation of services of general interest within the meaning of Article 90(2) of the Treaty. It follows that aid granted to public services in breach of those obligations constitutes ‘illegal’ aid.

59.

At Community level, this means that the Commission can instruct the State to suspend the payment of aid or provisionally recover the aid until it reaches a decision on compatibility. ( 56 ) At national level, this means that a court may ( 1 ) order recovery of the aid, (2) declare unlawful the act instituting the aid and the implementing measures, and (3) order the competent authorities to make good any damage which may have been caused by the immediate payment of aid. ( 57 )

60.

In the present case, the parties submit that the procedural obligations laid clown in Article 93(3) of the Treaty are liable to paralyse the functioning of public services in the Member States. They state that the procedure for examining aid is relatively long and that, for certain kinds of public services, it is difficult or even impossible to wait for the Commission's authorisation. They also state that, because of the number of measures concerned, the procedural obligations are liable to paralyse action by the Commission in the field of State aid.

61.

The Court previously had occasion to consider arguments of this type in the France v Commission case cited above. In that case the French Government submitted that the obligation to suspend produces serious risks for the continuity of public services. ( 58 ) The Court expressly rejected that argument, pointing out that the procedural obligations are the safeguard of the machinery for the review of aid in Community law. ( 59 )

62.

In any event, I consider that the fears expressed by the parties arc unfounded. In my view, the procedural obligations arc not liable to disturb the functioning of public services, for several reasons.

63.

First, the procedural obligations do not apply to all State measures. They apply only to measures which satisfy the criteria of Article 92(1) of the Treaty. In practice, this means that in certain essential fields State financing of public services is not caught by the procedural obligations. This applies inter alia to the following measures: ( 60 )

64.

Second, for measures coming under Article 92(1) of the Treaty, the Commission is subject to certain time-limits.

65.

Thus the Commission is obliged to carry out a preliminary examination of the aid within two months of its notification. ( 67 ) This time-limit is strict and cannot be extended by the Commission unilaterally. ( 68 ) If no decision has been taken by the expiry of the time-limit, the Member State concerned may implement the aid, subject to informing the Commission beforehand. ( 69 ) In that case the aid is deemed to have been authorised. ( 70 ) It comes under the rules for existing aid ( 71 ) and may thus continue to be paid as long as the Commission does not find that it is incompatible with the common market. ( 72 )

66.

The parties appear to consider that even a period of two months might be too long for certain types of public services. Even assuming that this may be so, ( 73 ) certain mechanisms make it possible to take account of such exceptional situations.

67.

Article 5 of the EC Treaty (now Article 10 EC) imposes a duty of sincere cooperation between the Community institutions and the Member States. ( 74 ) By virtue of that provision, the authorities of the Member State and the Commission might thus be induced to give priority treatment to a case of particular urgency or find some other appropriate solution.

68.

Third, it should be remembered that under Article 93(3) of the Treaty the Member States can notify aid schemes to the Commission. Aid schemes arc national provisions under which, without further implementing measures being required, individual aid awards may be made to undertakings defined in a general and abstract manner. ( 75 )

69.

The advantage of this machinery is that Member States obtain a single approval from the Commission on the basis of the general characteristics of the scheme. Member States thus avoid the obligation of subsequently notifying each individual case in which the scheme is applied. In its report for the Laeken European Council, ( 76 ) the Commission expressly accepted that the Member States can notify ‘compensation schemes’ in the field of financing of public services.

70.

Fourth, under Article 94 of the EC Treaty (now Article 89 EC), the Council may adopt regulations for exemptions by category in the field of State aid. The Council may also authorise the Commission to adopt such regulations. ( 77 )

71.

Regulations for exemption by category define the conditions under which certain categories of aid are to be regarded as compatible with the common market. Their main advantage lies in the fact that aid granted in accordance with the provisions of those regulations is exempted from the obligation to notify under Article 93(3) of the Treaty. Member States can therefore implement their aid plans without waiting for individual authorisation from the Commission.

72.

On this point, the Laeken European Council had already asked the Commission to set up a ‘policy framework’ for aid for public services. ( 78 ) In addition, the Barcelona ( 79 ) and Seville ( 80 ) European Councils expressly raised the possibility of the Commission submitting a regulation for exemption by category in that field. The Commission replied that it would start by setting up a Community framework, but would adopt an exemption regulation in so far as that was justified. ( 81 ) The Commission said that it would be able to draw up that framework in the course of 2002. ( 82 ) However, it suspended work pending the delivery of the Court's judgment in the present case. ( 83 )

73.

It follows that, should the Court decide to adopt the State aid approach in the present case, the Commission and the Council ought to be in a position to adopt a regulation for exemption by category within an acceptable period of time. In that case, State measures intended to offset the cost of public service obligations would quite simply be exempted from the obligation to notify. The Member States would then be able to put their financing plans into practice without waiting for an individual exemption from the Commission. The situation would thus be the same as that which has been applied since 1969 in the field of public land transport services. ( 84 )

74.

Having regard to all the above factors, I consider that the fears expressed by the parties are unfounded. In my opinion, the State aid approach is not liable to upset the functioning of public services in the Member States, nor to paralyse action by the Commission in the field of State aid.

75.

The second group of parties propose that the Court adopt the quid pro quo approach developed by Advocate General Jacobs in his Opinion in the GEMO case. ( 85 )

76.

Under that approach, the Court would distinguish between two categories of situation. The first category would comprise cases in which there is a direct and manifest link between the State financing and clearly defined public service obligations. In those cases the sums paid by the State to the recipient undertaking constitute not aid within the meaning of Article 92(1) of the Treaty but the consideration for the public service obligations assumed by the undertaking.

77.

Conversely, the second category of situation would cover cases where there is no direct and manifest link between the State financing and the public service obligations, as well as cases where those obligations are not clearly defined. In those cases the sums paid by the public authorities constitute aid which as such is subject to the procedural obligations laid down in Article 93(3) of the Treaty.

78.

For my part, I consider that this approach raises essentially two series of difficulties.

79.

First, the quid pro quo approach appears difficult to reconcile with the Court's case-law on State aid.

80.

According to settled case-law, the Court considers that, to determine whether a State measure constitutes aid, only the effects of the measure are to be taken into consideration. ( 86 )

81.

The other elements characterising the measure are not relevant at the stage of determining the existence of aid. This applies to the form in which the aid is granted, ( 87 ) the legal status of the measure in national law, ( 88 ) the fact that the measure is part of an aid scheme, ( 89 ) the reasons for the measure, ( 90 ) the objectives of the measure ( 91 ) and the intentions of the public authorities and the recipient undertaking. ( 92 ) These elements are of no relevance because they are not liable to affect competition. They may, on the other hand, become relevant at a later stage of the analysis, in order to assess the compatibility of the aid from the point of view of the derogating provisions of the Treaty. ( 93 )

82.

The quid pro quo approach amounts to introducing such elements into the actual definition of aid.

83.

The first criterion suggested consists in examining whether there is a ‘direct and manifest link’ between the State funding and the public service obligations. In practice, this amounts to requiring the existence of a public service contract awarded after a public procurement procedure. ( 94 ) Similarly, the second criterion suggested consists in examining whether the public service obligations are ‘clearly defined’. In practice, this amounts to verifying that there are laws, regulations or contractual provisions which specify the nature and content of the undertaking's obligations. ( 95 )

84.

In those circumstances, the quid pro quo approach departs from the Court's case-law on State aid. It amounts to defining aid no longer by reference solely to the effects of the measure, but by reference to criteria of a purely formal or procedural nature. At theoretical level, it means that the same measure may be classified as aid or ‘non-aid’ depending on whether a contract (of public service) or a legal instrument (defining the public service obligations) exists, although it produces identical effects on competition.

85.

Second, the quid pro quo approach does not appear to be capable of guaranteeing a sufficient degree of legal certainty.

86.

The principal criterion underlying this approach is defined in a vague and imprecise fashion. It is clear that this is deliberate and is intended to provide the flexibility needed to comprehend a wide range of situations. ( 96 ) Nevertheless, it is extremely difficult to know what is covered by the expression ‘direct and manifest link’. Moreover, apart from the case of a public service contract concluded after an award procedure, none of the parties was able to provide a single specific example of this kind of link between State financing and public service obligations. ( 97 )

87.

In those circumstances, the expression ‘direct and manifest link’ — and hence the very concept of State aid — will be likely to receive widely differing interpretations. These interpretations may also vary according to the cultural (or even personal) attitudes of the various bodies responsible for applying the Treaty rules on State aid.

88.

At practical level, such a divergence of interpretation may have considerable repercussions.

89.

Member States will no longer be able to identify with precision the measures which must be notified to the Commission. ( 98 ) Nor will undertakings know whether they can rely on the lawfulness of the State financing. National courts too will have difficulty in knowing whether to apply the Court's case-law on the direct effect of Article 93(3) of the Treaty. The Commission, finally, will no longer be able to determine with certainty whether it can start a procedure against an instance of State financing.

90.

In short, the only way to define the term ‘direct and manifest link’ will be on a case-by-case basis. It will necessarily have to be refined by the Court in the course of the cases brought before it. That is not a satisfactory outcome either for the political institutions of the Union or for the Court itself.

91.

First, one of the main concerns expressed by the European Councils of Nice, ( 99 ) Laeken ( 100 ) and Barcelona ( 101 ) is to ensure increased legal certainty in the field of the application of the law on aid to services in the general interest. Again, it is known that the Commission has suspended its work in this field until the Court gives judgment in the present case. ( 102 ) So it will not be adequate to adopt a solution which necessarily has to be defined casuistically by judicial decisions. In my opinion, it is essential to adopt a clear and precise position, so as to allow the institutions to define Community policy in the field of State financing of public services, and thus to ensure the legal certainty which is needed in such a sensitive field.

92.

Second, a case-by-case solution will inevitably have the effect of placing national courts in a position of ‘dependence’ as against the Court. As the concept of a ‘direct and manifest link’ (or any other similar expression) will have to be defined more precisely in the case-law, national courts will necessarily have to use the preliminary ruling procedure to interpret the concept of aid. Such an outcome appears hard to reconcile with the purpose of the procedure set up by Article 177 of the EC Treaty (now Article 234 EC). ( 103 ) In any event, there is a risk that it will lead to an unnecessary growth in the number of references to the Court for preliminary rulings.

93.

The State aid approach, for its part, makes it possible to avoid these drawbacks.

94.

As I have said, this approach consists in considering that the financial advantages granted by the authorities of a Member State to offset the cost of the public service obligations they impose on an undertaking constitute aid within the meaning of Article 92(1) of the Treaty. In that it sets out a clear and precise principle, this approach enables all those concerned (public authorities, private operators, national courts, Community institutions) to identify with precision the measures which fall within the scope of the Treaty rules on State aid.

95.

Moreover, the principles which underlie the State aid approach can be stated by the Court in a single judgment. This approach is not therefore likely to entail an increased number of references to the Court for preliminary rulings.

96.

In view of the above factors, the State aid approach makes it possible to ensure increased legal certainty and transparency in the field of State financing of public services.

97.

Having regard to all the above considerations, and to those which I set out in my earlier Opinion, I therefore propose that the Court rule as follows: