C-180/88

2. To avoid having to return to the 5. The Commission raises three objections question, let me say right away that I to the first submission. It considers that in consider that the letter in point is indeed a its challenge to the decision of 26 May 1988 decision, inasmuch as it clearly adopts a the applicant is in fact attempting to position on the request submitted by the question the validity of Decision applicant and has 'definitive legal effects' ' 83 / 399 / ECSC of 29 June 1983, " an action in respect of it. At the end of that letter it is 5 against which was dismissed by the Court, stated specifically: 'The Commission does or of the decisions of 10 February and 20 not believe that those factors are such as December 1984 and 24 December 1985 to warrant a demand for reimbursement of part of the aid granted.' It cannot, 2 — Page 2 of the application. therefore, be regarded as anything other 3 — Pages 6 and 26 of the application. 4 — Commission Decision concerning the aids that the United * Origina] language: French. Kingdom Government proposes to grant to the steel 1 — On this point see the judgment in Joined Cases 166/86 and industry (OJ 1983 L 227, p. 36). 220/86 Irish Cement v Commiilion [1988] ECR 6473, 5 — Judgment in Case 214/83 Federal Republic of Germany v paragraph 11. Commission [1985] ECR 3053.

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7. It is clear that the first difficulty lies in determining the real subject-matter of the action. Formally, of course, the action is for the annulment of the Commission's decision of 26 May 1988, but it does not really 8. In my view the intention of the explain what the applicant required of the application is consequently not to call in Commission in its letter of 30 March 1988. question the framework decision but solely The applicant has stated that it does not to challenge the decisions releasing aid. seek to impugn the 'framework decision', Even if the Court does not agree with that Decision 83/399, and, having also analysis, it is in any case certain that the disclaimed any intention of challenging the annulment of Decision 83/399 can no decisions releasing aid, it has submitted a longer be sought, having regard not only to 8 claim only in the alternative that the two the Court's judgment of 3 October 1985, 6 later decisions releasing aid should be which can be pleaded against the applicant annulled. The principal claim is therefore since it intervened in that case, but also to that the Commission should 'rectify' ex post the expiry of the time-limit of one month facto the excessively favourable effects for laid down in the third paragraph of Article the British Steel Corporation of the grant of 33 of the ECSC Treaty, that decision aid. However the claim may be formulated, 7 — Joined Cases 21/61 to 26/61 [1962] ECR 73. 6 — Observations on the objection of admissibility, p. 10. 8 — Case 214/83, cited above in footnote 5.

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10. The first argument is not convincing. Let us recall the general structure of the 'legal effects ... which are binding on, and ECSC aid system. Pursuant to Decision No capable of affecting the interests of, the 2320 / 81 / ECSC , 9 known as the Second applicant by bringing about a distinct 12 Aids Code, Decision 83/399 states that change in his legal position'. certain aid which the United Kingdom Government planned to grant to the British Steel Corporation is, subject to certain Thus in the Krupp judgment 13 the Court conditions, compatible with the common examined whether the statement of reasons market. The amount of the planned aid is given in the Commission's communications set out in the decision. The essential fixing production quotas were insufficient, conditions relate to reduction in production thus accepting by implication that an action capacity and the need to ensure that the might lie against such communications. viability of the undertaking is rapidly restored. According to Article 3 of the decision, 'none of the proposed aid shall be 13. The decisions releasing aid, inasmuch as paid unless the Commission is satisfied that they acknowledge that the recipient under­ the undertaking concerned can return to taking has carried out the measures on financial viability by the end of 1985.' which the grant of aid was conditional and Similarly, Article 4 makes payment of aid authorize payment of aid are therefore, in subject to the Commission's being satisfied my view, 'legally binding'. Moreover, that reductions in production capacity have inasmuch as competing firms are thus been achieved and that the undertaking regarded as qualifying for the planned aid, fulfils its obligations in respect of production quotas. Finally, according to 10 — Judgments in Joined Cases 8/66 to 11/66 Cimenteries CBR Article 5, aid for investment may be granted v Commùiion [1967] ECR 75 and in Case 22/70 Commission v Council [1971]ECR 263, paragraph 42. only if the Commission has delivered a 11 — See, for instance, the judgments in Joined Cases 23/63, favourable opinion pursuant to Article 54 of 24/63 and 52/63 Usines Henricol v High Authority [19631 the ECSC Treaty. ECR 217 and in Case 54/65 Forges de Châtillon v High Authority (1966] ECR 185. 12 — Judgment in Case 60/81 IBM v Commission [1981] ECR 9 — Commission Decision of 7 August 1981 establishing 2639, paragraph 9. Community rules for aids to the steel industry (OJ 1981 13 — Judgment in Joined Cases 275/80 and 24/81 [1981] ECR L 228, p. 14). 2489, paragraphs 6 to 13.

16. It cannot be denied that the applicant, 15. The Commission's second argument, an association of German steel under­ concerning the expiry of the time-limit for takings, is concerned by the decisions bringing an action for annulment, is clearly releasing aid which authorize the payment more weighty. According to the Court's of State aid to competing undertakings case-law on the third paragraph of Article established in another region of the 173 of the EEC Treaty, 15 which it applied Community. in a case under the ECSC Treaty, Dillinger 16 Hüttenwerke, 17. We must therefore turn to the question whether the period for bringing an action for annulment against those decisions has not already expired. A simple perusal of the 'failing publication or notification, it is for a British Steel Corporation's accounts, in 19 party who has knowledge of a decision particular those published on 8 July 1986, concerning it to request the whole text would have revealed the existence of thereof within a reasonable period'. decisions releasing aid. The observations 20 made in the proceedings show, moreover, 14 — For example, the judgment in Case 222/84 Johnston [1986] ECR 1651; judgment in Case 222/86 Heylenl [1987] ECR 17 — Ibid., paragraph 14. 4097. 18 — Ibid., paragraph 8. 15 — Judgment in Case 76/79 Kõnecke [1980] ECR 665; judgment in Case 59/84 Tezi Textiel [1986] ECR 887. 19 — See the Commission's rejoinder, p. 9. 16 — Judgment in Case 236/86 [1988] ECR 3761. 20 — In particular at pp. 13 to 16 of the application.

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18. The following discussion is offered in inform itself or, if it did so, would seek to the alternative, in the event that the Court rely on its own neglect. Finally, the Wirt- should not share my opinion that the schaftsvereinigung Eisen- und Stahlindustrie challenge to the decisions releasing aid is has a representative on the ECSC Consul out of time. tative Committee. On 6 August 1986 that committee received a copy of the Commission's Report on the Application of the Steel Aids Code 1984-85 (document COM(86) 235 final). 21 Although, according 19. It is somewhat difficult to ascertain the to the application, the applicant had sent a precise nature of the claims put forward letter to the Commission on 28 April both in the application and the reply.

aid. It therefore appears that the reasonable period within which the applicant should have asked to have the text of the decisions 20. On the first point, the applicant's in question communicated to it 'in such a argument — relating, it will be recalled, to way as to enable it to exercise its right of aid which was authorized but was not action' was well past. Whereas in the Tezi necessary — is based on the assertion that 2 Textiel case 3the Court considered a period the British Steel Corporation was granted of 14 months to be reasonable, in aid to no purpose, inasmuch as the under Netherlands v Commission 24a period of 18 taking could have recovered its viability months did not appear to the Court to without it. The aid is said to have enabled be reasonable with regard to the the British Steel Corporation to reduce its commencement of proceedings under capital borrowings to a level substantially lower than the average of competing under takings, thus leaving it with a reduced

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OPINION OF MR DARMON — CASE C-180/88

26 and that: granted and the steps taken in return is also criticized.

'as for the complaint of unequal treatment, that would be justified only if the contested 21. In this respect it would seem that the decisions had given rise to different claim as thus formulated has already to advantages for steel undertakings placed in some extent been examined and rejected by the same situation or to identical advantages v the Court in its judgment in Case 214 / 83 . for steel undertakings placed in appreciably In paragraph 21 of that judgment the claims different situations. However, it does not put forward by the Federal Republic of appear either from the written or from the Germany, supported by the applicant in the oral proceedings before the Court that present proceedings, were summarized thus: either of those cases applied in this instance. The Commission rightly emphasized the important differences in the situations of individual undertakings and the very varied conditions which must be met before indi­ 'In support of its principal claim, the vidual undertakings can receive the auth­ applicant argues in the first place that the orized aid'. 29

Second Aids Code has been infringed. It contends in particular that aid far in excess of that needed in order to achieve the required reductions in production capacity 22. In consequence, the applicant's criticism was approved in the case of steel under­ in the present proceedings concerning the takings in ... the United Kingdom. absence of an appropriate relationship Secondly, it argues that non-subsidized between the benefit granted and the steps undertakings, in particular German under­ taken in return would seem to have been takings, have suffered discrimination in so answered already in the judgment cited, far as they have been required to make where the Court refused to establish any significantly greater cuts in production precise quantitative relationship between the capacity in relation to authorized aid.' amount of aid and the reduction in production capacity.

the British Steel Corporation was able to production quotas in the course of the first reduce considerably its financial costs. three quarters of 1985. Nevertheless the Unequal treatment or distortion of compe­ actual text of Article 7(1) of Decision tition are here two aspects of the same 83/399 specifies that 'the Commission may 30 criticism. The Court has already held that order the suspension of aid payments if at in view of the situation of the steel under­ any time it should find that: aid has been takings in question, in particular the English paid in disregard of the conditions attached and German undertakings, neither the to its authorization ... ' Thus suspension conditions placed on the grant of aid to the of the payment of aid is merely a British Steel Corporation nor the amount of supplementary sanction alongside fines that aid were contrary to the principle of imposed by the Commission. As the equal treatment. It does not seem possible to Commission rightly emphasizes in its me to reopen that assessment on the basis of written observations, it has a discretionary an allegation that competition was distorted; power to choose whether or not to have such a claim would be inadmissible. recourse to the provisions of that article. Consequently the application is bound to fail on this count.

24. Let us now examine the arguments on the merits that might be advanced with any hope of success for the purpose of chal­ 26. With regard to the second argument, lenging the decisions releasing aid. Such the questions to be examined are not only arguments would appear to be based either the point at which the Commission must on a breach of the obligations introduced by assess whether aid is necessary, on which the 'framework decision', Decision 83/399, the parties disagree, but also the possible or on the absence of any need for aid. existence of an obligation to rectify ex post facto any distortions of competition which might have been caused by the grant of aid.

31. The applicant bases its claim that the Commission is under an obligation of recti­ 'the Commission cannot approve aid the fication on Articles 4(c) and 5 of the ECSC grant of which may result in manifest 34 Treaty. Article 4(c) declares 'aids granted by discrimination'. States ... in any form whatsoever' to be incompatible with the common market for coal and steel; Article 5 provides that 'the Community shall .. . ensure the estab­ 29. It is true that in the judgment of 3 lishment, maintenance and observance of October 1985 it was the 1983 framework normal competitive conditions'. Those decision that was at issue and not the articles are among the first six articles of the decisions releasing aid. However, although Treaty, making up Title One , entitled 'The the framework decision does not expressly European Coal and Steel Community'. As refer to the fact that the planned aid must Article 95 states, Article 4 sets out the be necessary, it seems to me that that objectives of the Community. requirement follows directly from Article 2(1), fourth indent, and Article 3(1), second indent, of the Second Aids Code, which require respectively that the aid in question should not entail distortions of competition and that the amount and intensity of aid 32. Let me say forthwith that it does not should be limited to what is necessary for appear to me possible to infer from those the restructuring effort involved. In conse­ articles, which are general in nature, an quence the amounts provided for in the obligation that is as precise as that now framework decision might not be reached if imputed to the Commission to correct ex the Commission found, in the course of the post facto the excessively beneficial economic successive stages of its execution, that some effects of aid which has been granted, so as of the planned aid was no longer essential. to achieve some sort of 'equalization' among competing steel undertakings.

that 'aids granted to the steel industry may 35 Decision No 1018/85/ECSC, known as be considered compatible with the orderly the 'Third Aids Code', moreover, simply functioning of the common market provided amends the time-limits laid down in that: .. . the aids in question do not entail Decision No 2320/81 in order to allow for distortions of competition and do not affect payment of supplementary aid. trading conditions to an extent contrary to the common interest'. However, compliance with that condition must be assessed by the Commission at the time when it takes decisions on applications for aid and 35. Moreover, although the Court includes examines in particular the amount and among the conditions which aid, to be intensity of planned aid, as is clear from lawful, must satisfy the requirement that the Article 2(2) and (3), without prejudice to aid should be necessary to achieve the verification of the aid's necessity which Community objectives, it is only at the time the Commission must undertake when of authorization that the Commission must adopting the decisions to release it. assess whether that requirement is met. Thus in its judgment of 3 October 1985 in Case 214 / 83 the Court stated:

price levels. There is no question of moni­ toring whether the original assessment of 35 — Commission Decision of 19 April 1985 amending Decision the amount of aid necessary to restore an No 2320/81 establishing Community rules for aids to the steel industry (OJ 19851 110, p. 5). undertaking rapidly to viability may 36 — [1985] ECR 3053, paragraph 30, my emphasis. subsequently prove to be too generous. 37 — Case 304/85 [1987] ECR 871, paragraph 27, my emphasis.

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39. Despite the questions put to the applicant at the hearing on this point, it has not, moreover, indicated what concrete 37. It would undermine not only the prin­ measures it wished the Commission to adopt ciples of legal certainty and the protection in order to re-establish the equality of of legitimate expectations, on which the competition that had allegedly been recipients of the aid in question are entitled disrupted. to rely, but also the credit of the under­ taking granted aid and the confidence of investors or its partners if, five years after a lawfully granted aid was paid, the under­ 40. The application therefore appears to be taking could be ordered to repay it. The ill founded. However, it should be Court has already taken such requirements remembered that there is no need for the into consideration, declaring in Netherlands v Commission that: 38 — Case 59/70 [1971] ECR 639, paragraph 21, my emphasis. 39 — Judgments in Joined Cases 7/56 and 3/57 to 7/57 Algera [1957-58] ECR 39, at p. 56, in Case 14/61 Hoogovens [1962] ECR 253, at p. 272, in Case 111/63 Lemmerz-Werke [1965] ECR 677, at p. 690, in Case 14/81 Alpha Sieri [1982] ECR 749, paragraph 10, and in Case 15/85 Consorzio Cooperative d'Abruzzo [1987] ECR 1005, paragraph 12; see in connection with this last judgment: 'the duty of cooperation imposed on Miren A. Letemendia: Cahiers ¡ie droit européen 1989, Member States by Article 86 must prompt a p. 627.

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Court to examine these issues unless it letter of 30 March 1988 to say that the decides not to follow my opinion regarding matter of a possible payment of unauth­ the inadmissibility of the action, to the orized aid was raised with the Commission. effect that the challenge to the decisions releasing aid is out of time.

42. In this respect, it is very difficult to accept the applicant's assertion that its first 'replaced, while this action was in progress, letter of 30 March 1988 also raised with the a previous decision having the same subject- Commission questions concerning the matter ... must be regarded as a new factor existence of unauthorized aid, relying on which allows the applicant to amend its the reference to 'authorized or tolerated pleadings. It would not be in the interests of aid' 40 to indicate that it meant to address the due administration of justice and the that problem as well. 41 That reference is requirements of procedural economy to found in a paragraph which deals solely oblige the applicant to make a fresh 43 with the question of the grant to the British application to the Court'. Steel Corporation of unnecessary aid. The recapitulation of the formal claims made by the applicant to the Commission pursuant to 45. However, the situation in this case is Article 35 of the ECSC Treaty does not not the same. In the judgments cited, the refer, even indirectly, to the grant of unauthorized aid. It would therefore be 42 — Observations on the objection of inadmissibility, pp. 19 reading too much into the terms of the and 20. 43 — Case 14/81 Alpha Sleel [1912] ECR 749, paragraph 8, my emphasis; see also judgment in Joined Cases 351/85 and 40 — This appears on p. 7, Annex A, of the application's 360/85 Fabnque de fir de Charleroi and Diliinger Annex 2. Hüttenwerke [1987] ECR 3639, paragraph II; judgment in 41 — Applicant's observations on the objection of inadmissi- Case 103/85 Stahlwerke Peine-Salzgitter [1988] ECR 4131 , bility, p. 18. paragraph 11.

(3) the applicant should be ordered to pay the costs.

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