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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Freistaat Sachsen v Commission (State aid) [2007] EUECJ T-357/02 (03 May 2007) URL: https://www.bailii.org/eu/cases/EUECJ/2007/T35702.html Cite as: [2007] EUECJ T-357/2, [2007] EUECJ T-357/02 |
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(State aid Aid granted by the authorities of the Land Saxony Aid scheme for small and medium-sized enterprises Accelerated clearance procedure Application ratione temporis of the Community guidelines and of the exempting regulation concerning aid to small and medium-sized enterprises Aid scheme notified before the entry into force of the exempting regulation Legitimate expectations Legal certainty Complete notification)
In Case T-357/02,
Freistaat Sachsen, represented by T. Lübbig, lawyer,
applicant,
Commission of the European Communities, represented by V. Kreuschitz and J. Flett, acting as Agents,
defendant,
ACTION for annulment of the second paragraph of Article 2 and of Articles 3 and 4 of Commission Decision 2003/226/EC of 24 September 2002 on an aid scheme which the Federal Republic of Germany is planning to implement 'Guidelines on assistance for SMEs Improving business efficiency in Saxony': Subprogrammes 1 (Coaching), 4 (Participation in fairs), 5 (Cooperation) and 7 (Design promotion) (OJ 2003 L 91, p. 13),
composed of M. Vilaras, President, E. Martins Ribeiro, F. Dehousse, D. Šváby and K. Jürimäe, Judges,
Registrar: C. Kristensen, Administrator,
having regard to the written procedure and further to the hearing on 21 March 2006,
gives the following
Legal context
'Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.'
'The following may be considered to be compatible with the common market:
(a) aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment;
...
(c) aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest;
...'
'...
In principle the Commission will not object to new or modified existing aid schemes notified pursuant to Article [88](3) [EC] meeting the following criteria:
1. new aid schemes, excluding those supporting industrial sectors covered by specific Community policy statements as well as aids in the agricultural, fisheries, transport and coal sectors.
The schemes must be limited to small and medium-sized enterprises...
The schemes must also satisfy one of the following criteria:
...
All aids to exports in intra-Community trade or operating aids are excluded from the procedure;
2. modifications of existing aid schemes which the Commission has previously approved, except in specific cases where the Commission strictly limited its authorisation to the period, budget and conditions then notified.
The amendment may involve any of the following:
prolongation over time without increase in budgetary resources,
increase in budget available up to 20 % of original sum but no prolongation,
prolongation over time with budget increases up to 20 % of original sum,
tightening the criteria of application of the scheme.
...
The Commission will decide on notifications within 20 working days.'
'4.15. Regional aid aimed at reducing a firm's current expenses (operating aid) is normally prohibited. Exceptionally, however, such aid may be granted in regions eligible under the derogation in Article 87(3)(a) [EC] provided that it is justified in terms of its contribution to regional development and its nature and its level is proportional to the handicaps it seeks to alleviate. It is for the Member State to demonstrate the existence of any handicaps and gauge their importance. Operating aid must be limited in time and progressively reduced.
...
4.17. Operating aid intended to promote exports between Member States is not allowed.'
'In a notification, the Member State concerned shall provide all necessary information in order to enable the Commission to take a decision pursuant to Articles 4 and 7 (hereinafter referred to as 'complete notification').'
'Where the Commission has not taken a decision in accordance with paragraphs 2, 3 or 4 [of Article 4 of the Regulation on procedure in State aid cases] within the period laid down in paragraph 5 [of Article 4 of the Regulation on procedure in State aid cases], the aid shall be deemed to have been authorised by the Commission. The Member State concerned may thereupon implement the measures in question after giving the Commission prior notice thereof, unless the Commission takes a decision pursuant to this Article within a period of 15 working days following receipt of the notice.'
'The notification shall be deemed to be withdrawn if the requested information is not provided within the prescribed period, unless before the expiry of that period, either the period has been extended with the consent of both the Commission and the Member State concerned, or the Member State concerned, in a duly reasoned statement, informs the Commission that it considers the notification to be complete because the additional information requested is not available or has already been provided. In that case, the period referred to in Article 4(5) shall begin on the day following receipt of the statement...'
'This Regulation is without prejudice to the possibility for Member States of notifying aid to small and medium-sized enterprises. Such notifications will be assessed by the Commission in particular in the light of the criteria set out in this Regulation. The guidelines on State aid for small and medium-sized enterprises should be abolished from the date of entry into force of this Regulation, since their contents are replaced by this Regulation.'
Background to the dispute
1. Administrative procedure
2. The contested decision
'Article 1
The four subprogrammes 'Coaching', 'Participation in fairs', 'Design promotion' and 'Cooperation' of the guidelines promoting SMEs - Improving business efficiency ... constitute State aid within the meaning of Article 87(1) ... EC...'
Article 2
To the extent that they do not exceed the scope and aid intensities of Regulation ... No 70/2001, the four subprogrammes referred to in Article 1 can be regarded as being compatible with Article 87(3)(c) ... EC...
To the extent that they provide for aid exceeding the scope and the aid intensities of Regulation ... No 70/2001, the four subprogrammes are incompatible with the common market.
Article 3
To the extent that the subprogramme 'Cooperation' provides for operating aid, it is incompatible with the common market.
Article 4
Germany may implement the four subprogrammes referred to in Article 1 only if they have been brought into line with this Decision.
Article 5
Germany shall inform the Commission, within two months of notification of this Decision, of the measures taken to comply with it.
Article 6
This Decision is addressed to the Federal Republic of Germany.'
Procedure and forms of order sought by the parties
annul the second paragraph of Article 2 and Articles 3 and 4 of the contested decision;
order the Commission to pay the costs.
dismiss the action as unfounded;
order the applicant to pay the costs.
Law
1. The plea concerning the procedural illegality of the contested decision which follows from the fact that the Commission did not apply the accelerated clearance procedure
Arguments of the parties
Findings of the Court
2. The plea concerning the material illegality of the contested decision stemming from the non-applicability of the Regulation exempting SMEs
Arguments of the parties
Findings of the Court
The applicability of the Regulation exempting SMEs to notifications which were pending as at its entry into force
The claim relating to the exhaustiveness of the initial notification
Admissibility of the claim
Substance
'... at the time of the notification of the aid scheme, the Regulation exempting SMEs was not yet in force. Therefore, the German authorities could not, at the time of the notification, take as their basis the criteria of the Regulation exempting SMEs... For the purposes of an assessment of State aid, it is the legal position at the time of the notification that is relevant... The German authorities therefore take the view that this aid scheme must still be assessed on the basis of the criteria of the [1996] Community guidelines for SMEs.'
'To supplement the guidelines currently notified, a general aid ceiling of 50% in accordance with the provision of the Regulation exempting SMEs is envisaged in addition to the absolute aid ceiling. A higher aid intensity of up to 65% is envisaged for small enterprises (according to the EU definition) subject to the same absolute aid ceilings.'
Costs
On those grounds,
hereby
1. Annuls the second subparagraph of Article 2 and Articles 3 and 4 of Commission Decision 2003/226/EC of 24 September 2002 on an aid scheme which the Federal Republic of Germany is planning to implement 'Guidelines on assistance for SMEs Improving business efficiency in Saxony': Subprogrammes 1 (Coaching), 4 (Participation in fairs), 5 (Cooperation) and 7 (Design promotion);
2. Orders the Commission of the European Communities to pay the costs.
Vilaras |
Martins Ribeiro |
Dehousse |
Šváby |
Jürimäe |
Delivered in open court in Luxembourg on 3 May 2007.
E. Coulon |
M. Vilaras |
Registrar |
President |
Legal context
Background to the dispute
1. Administrative procedure
2. The contested decision
Procedure and forms of order sought by the parties
Law
1. The plea concerning the procedural illegality of the contested decision which follows from the fact that the Commission did not apply the accelerated clearance procedure
Arguments of the parties
Findings of the Court
2. The plea concerning the material illegality of the contested decision stemming from the non-applicability of the Regulation exempting SMEs
Arguments of the parties
Findings of the Court
The applicability of the Regulation exempting SMEs to notifications which were pending as at its entry into force
The claim relating to the exhaustiveness of the initial notification
Admissibility of the claim
Substance
Costs
* Language of the case: German.