T-243/94

SSAB Svenskt Stål AB, a company incorporated under Swedish law, established in Stockholm, represented by John Boyce and Philip Raven, Solicitors, with an address for service in Luxembourg at the Chambers of Elvinger, Hoss and Prussen, 15 Côte d'Eich,

Det Danske Stålvalseværk A/S, a company incorporated under Danish law, estab- lished in Frederiksværk (Denmark), represented by Jonathan Alex Lawrence, Solicitor, with an address for service in Luxembourg at the Chambers of Ernst Arendt, 8-10 Rue Mathias Hardt,

interveners,

° Language of the case: English.

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Kingdom of Spain, represented by Alberto Navarro Gonzalez, Director General for Community Legal and Institutional Coordination, assisted initially by Gloria Calvo Díaz, Abogado del Estado, and then by Luis Perez de Ayaía Beccerril, Abogado del Estado, with an address for service in Luxembourg at the Spanish Embassy, 4-6 Boulevard Emmanuel Servais,

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Ilva Laminati Piani SpA, a company incorporated under Italian law, established in Rome, represented by Aurelio Pappalardo, of the Trapani Bar, and Massimo Merola, of the Rome Bar, with an address for service in Luxembourg at the Cham- bers of Alain Lorang, 51 Rue Albert I,

interveners,

A P P L I C A T I O N for the annulment of Commission Decision 94/258/ECSC of 12 April 1994 concerning aid to be granted by Spain to the public integrated steel company Corporación de la Siderurgia Integral (CSI) and Commission Decision 94/259/ECSC of 12 April 1994 concerning aid to be granted by Italy to the public steel sector (Ilva group) (OJ 1994 L 112, pp. 58 and 64 respectively),

gives the following

Judgment

Legal background

1 The Treaty establishing the European Coal and Steel Community ('the Treaty') prohibits in principle State aid to the steel industry by providing in Article 4(c) that 'subsidies or aids granted by States, or special charges imposed by States, in any form whatsoever' are recognized as incompatible with the common market for coal and steel and are accordingly to be abolished and prohibited within the Com- munity, as provided in the Treaty.

2 The first and second paragraphs of Article 95 of the Treaty provide:

'In all cases not provided for in this Treaty where it becomes apparent that a decision or recommendation of the Commission is necessary to attain, within the common market in coal and steel and in accordance with Article 5, one of the objectives of the Community set out in Articles 2, 3 and 4, the decision may be taken or the recommendation made with the unanimous assent of the Council and after the consultative Committee has been consulted.

4 In view of the deterioration of the economic and financial situation in the steel industry, the Commission presented a restructuring plan to the Council and the European Parliament on 23 November 1992 in its Communication SEC (92) 2160 final entitled 'Towards greater competitiveness in the steel industry: the need of further restructuring'. That plan was prompted by the finding that structural over- capacity persisted, and was aimed primarily at achieving, through the voluntary participation of steel companies, a substantial and definitive capacity reduction of the order of at least 19 million tonnes. With that aim in view, it proposed a series of accompanying measures in the social field, together with financial incentives including Community aid. In parallel with that plan, the Commission gave an exploratory mandate to an independent expert, Mr Braun, former Director Gen- eral of the Directorate-General for industry at the Commission, his essential task being to list projects for the closure of steel undertakings over the period envisaged in the above communication, which covered the years 1993 to 1995. O n 29 January 1993 Mr Braun, having contacted the heads of some 70 steel undertakings, submit- ted his report, entitled 'Current or Planned Restructuring in the Steel Industry'.

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5 In its Conclusions of 25 February 1993 the Council welcomed the broad outlines of the programme submitted by the Commission following the Braun Report, with a view to achieving a substantial reduction in excess production capacity. The enduring restructuring of the steel industry was to be facilitated by 'a package of supporting measures of limited duration which strictly comply with the rules on control of State aids', it being understood in relation to such aids that 'the Com- mission [confirmed] its commitment to rigorous and objective application of the aids code and [would] ensure that any derogations proposed to the Council under Article 95 of the Treaty contribute fully to the required overall effort to reduce capacity. The Council [would] act promptly on [those] proposals, on the basis of objective criteria'.

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s It was against that legal and factual background and with a view to facilitating fur- ther restructuring of the steel industry that, on 12 April 1994, following the Coun- cil's assent, the Commission adopted six ad hoc decisions on the basis of the first and second paragraphs of Article 95 of the Treaty, which authorize the granting of State aid not meeting the criteria permitting derogation, pursuant to the Aid Code, from Article 4(c) of the Treaty. In those six decisions the Commission authorized, respectively, the aid which Germany planned to grant to E K O Stahl AG, Eisen- hüttenstadt (Decision 94/256/ECSC, OJ 1994 L 112, p. 45), the aid which Portugal planned to grant to Siderurgia Nacional (Decision 94/257/ECSC, OJ 1994 L 112, p. 52), the aid which Spain planned to grant to Corporación de la Siderurgia Inte- gral (CSI) (Decision 94/258/ECSC, OJ 1994 L 112, p. 58, hereinafter 'Decision 94/258'), the grant by Italy of State aid to the public steel sector (Ilva steel group) (Decision 94/259/ECSC, OJ 1994 L 112, p. 64, hereinafter 'Decision 94/259'), the aid which Germany planned to grant to Sächsische Edelstahlwerke G m b H , Freital/Sachsen (Decision 94/260/ECSC, OJ 1994 L 112, p. 71) and the aid which Spain planned to grant to Sidenor, an undertaking producing special steels (Decision 94/261/ECSC, OJ 1994 L 112, p. 77).

9 Those authorizations were made the subject, in accordance with the Council's assent, of Obligations corresponding to net capacity reductions of at least 2 million tonnes of crude steel and a maximum of 5.4 million tonnes of hot-rolled products' on the basis of the Commission's Communication to the Council and the Euro- pean Parliament of 13 April 1994 [ C O M (94) 125 final], presenting an intermediate report on the restructuring of the steel industry and making suggestions for the consolidation of that process in the spirit of the conclusions reached by the Coun- cil on 25 February 1993.

i3 O n 28 October 1994 British Steel lodged an application at the Registry of the Court of First Instance for measures of organization of procedure under Article 64(4) of the Rules of Procedure to the effect that the Court should order the Com- mission to produce the expert's reports drawn up by W. S. Atkins at the Commis- sion's request concerning the feasibility of the plans for the restructuring of Ilva and CSI and the reports concerning those undertakings which Italy and Spain are required to submit to the Commission twice a year pursuant to Article 4 of the contested decisions to enable it to monitor compliance with the conditions laid down by those decisions. After receiving the observations of the Commission lodged on 9 December 1994, the Court of First Instance put a series of questions to the applicant, the Commission and Ilva concerning, first, the need to have access to the abovementioned reports in order to assess the propriety of the contested decisions and safeguard the rights of the defence and, secondly, the confidential nature or otherwise of the information contained in those reports, and invited the interveners to submit their observations on the applicant's request. The applicant, the Commission and Ilva replied to the questions and the interveners lodged their observations within the prescribed time-limit. In addition, as regards the question of confidentiality, the Commission forwarded to the Court of First Instance on 30 June 1995 the Atkins expert's report concerning CSI, with the information which the latter considered confidential deleted from it. The Commission

is By letter from the Registry of 3 December 1996 the Court put a series of questions to the Commission relating essentially to the information of which the applicant, in the alternative, sought disclosure in its first application for measures of organi- zation of procedure, in the event of the Court's not considering it appropriate to accede to its request for production of the abovementioned expert's reports and to order other measures of organization of procedure. The Commission gave answers to those questions within the time allowed. Having regard to those answers, the Court took the view that it had at its disposal all the information necessary to assess the pleas in law put forward by the applicant and that production of the Atkins expert's reports concerning Uva and the SRI report concerning CSI or the abovementioned reports from the Member States concerned was not necessary to ensure that the rights of the defence were safeguarded. Upon hearing the report of the Judge-Rapporteur it was decided to open the oral procedure without any preparatory inquiries. The parties presented oral argument and answered the ques- tions put to them orally at the hearing on 25 February 1997.

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Forms of order sought

i6 The applicant, supported by SSAB Svenskt Stål, claims that the Court should:

— annul Decisions 94/258 and 94/259;

— order the applicant to pay the costs.

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i9 Ilva claims that the Court should:

— dismiss the application as inadmissible and/or unfounded;

— order the applicant to pay the costs, including those incurred by Ilva.

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22 In the event, it maintains that the two decisions contested by British Steel consti- tute important aspects of an overall political agreement concluded within the Council with a view to restructuring the Community steel industry. The applica- tion in this case should therefore be declared inadmissible, to the extent to which it is not limited to challenging the criteria used by the Commission in evaluating the conditions for the grant of the specific aid authorized by the two contested deci- sions but challenges the very basis of the political agreement reached at Commu- nity level and endorsed by the six decisions adopted by the Commission on 12 April 1994. Indeed, the annulment of either or both of the decisions concerned would lead to a change in the political compromise reached within the Council. Accordingly, in its view, the applicant may only contest all six decisions together.

Findings of the Court

23 It is appropriate, before examining whether there is a bar to proceeding with the case, as suggested by the intervener Ilva, to consider whether in the light of the applicable Rules of Procedure it is permissible for Ilva to raise such a matter.

24 Pursuant to the second paragraph of Article 34 and the first paragraph of Article 46 of the ECSC Statute of the Court of Justice, submissions made in an application to intervene are to be limited to supporting the submissions of one of the parties. Moreover, Article 116(3) of the Rules of Procedure requires interveners to accept the case as they find it at the time of their intervention.

28 In this case the ground of inadmissibility to which the intervener refers does not relate to any such essential condition and it is not therefore appropriate for the Court to consider it of its own motion. Essentially, Ilva merely contends that an undertaking concerned by a decision forming part of a 'package' is not entitled to challenge separately the decision affecting it but is required, in order to contest it, to bring proceedings for annulment against all the decisions in the 'package'. H o w - ever, not only is no such condition of admissibility imposed by the relevant provi- sions of the Treaty but, in addition, it would conflict entirely with the wording and spirit of the second paragraph of Article 33 of the Treaty, which expressly upholds the right of undertakings and associations of undertakings to institute proceedings against individual decisions concerning them.

29 It follows that the Court cannot in any event find the action inadmissible on the ground referred to by Ilva, since the alleged condition of admissibility on which it is based is incompatible with the right conferred on undertakings by Article 33 of the Treaty to bring proceedings against any individual decisions of concern to them.

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Substance

30 In support of its action for annulment, the applicant relies on four pleas in law, alleging respectively lack of competence of the Commission to adopt the contested decisions, breach of the principle of the protection of legitimate expectations, infringement of the ECSC Treaty or rules of law concerning its application, and infringement of essential procedural requirements.

Aid Code but merely adopted decisions which, contravening the rules of the Code, improperly granted benefits to certain public undertakings at the expense of com- petitors which were not granted the benefit of State aid.

33 T h e intervener D e t D a n s k e Stålvalseværk s u p p o r t s the applicant's view that the A i d C o d e constitutes a b i n d i n g and exhaustive legal regime. T h e C o m m i s s i o n is therefore required s c r u p u l o u s l y t o behave in the m a n n e r w h i c h it itself prescribed u n d e r Article 95 of the Treaty and is n o t c o m p e t e n t t o a d o p t an individual decision conflicting w i t h the criteria of the Aid C o d e . T h a t c o d e is i n t e n d e d t o regulate a sector w h i c h is extremely sensitive as far as the p r o p e r functioning of the c o m m o n m a r k e t in steel is c o n c e r n e d , in that State aid c o n t r a r y t o the f u n d a m e n t a l objec- tives of the Treaty is liable t o create difficulties for u n d e r t a k i n g s w h i c h have used their own resources to undertake restructuring and privatization efforts. It pro- vides the appropriate legal basis for the adoption of individual decisions conform- ing with its provisions. However, in this case, the Commission adopted the con- tested decisions on the basis of Article 95 of the Treaty for the sole purpose of evading the procedure and rules laid down by the Aid Code.

35 The Council considers that, in adopting the Aid Code, the Commission did not exhaust its powers under the first and second paragraphs of Article 95 of the Treaty and that it therefore was empowered to authorize the grant of aid of the kind covered by the decisions at issue. According to the Council, cases may arise where a further Commission decision is necessary to attain one of the objectives of the Community set out in Articles 2, 3 and 4 of the Treaty, even where there is an aid code laying down the rules intended to apply to all State aid to the steel indus- try. In particular, the Fifth Aid Code merely set out the measures which the Com- mission then considered compatible with the Treaty but that was not an exhaustive statement and the Commission was therefore free, should the need arise, to have recourse to Article 95 for other decisions, provided that they conformed with the conditions laid down by that article. In this case, it was necessary, in the Council's opinion, to adopt a global strategy to cope with the increasingly serious crisis in the steel industry and to achieve reductions in the capacity of the European steel undertakings; however, such a strategy did not preclude assistance being granted to undertakings through the accompanying measures adopted as part of the overall programme of capacity reductions.

36 According to the Italian Republic, the implication of the applicant's view would be to confer on the Aid Code the power to amend substantially the first and second paragraphs of Article 95 of the Treaty. In other words, according to that view, that code has the effect of exhausting the source from which it derives. However, Article 95 is a general provision whose application cannot be prohibited or limited by a provision of a lower order. It follows that both the Aid Code and the con- tested decisions at issue are of the same rank in the hierarchy of norms and have the same legal status. Moreover, the Aid Code is concerned only with certain cat- egories of aid, defined in Articles 2 to 5 thereof'. N o other kind of public financial

38 Ilva too contends that the Commission was competent to adopt the contested deci- sions under Article 95 of the Treaty. That provision enables it to deal, by means of exceptional decisions, whether of a general or individual nature, with any unfore- seeable and extraordinary situation which might arise. Thus, if Article 95 consti- tutes an adequate legal basis for the Aid Code, there is no reason, in Ilva's view, for the position to be any different regarding the adoption of individual decisions. It is for the Commission to decide whether it is appropriate to adopt a general decision or an individual decision, according to the circumstances. The Aid Code is of only limited scope. It indicated that certain categories of aid pursuing certain Treaty objectives were compatible with the Treaty and was not intended to prohibit aid not falling within its scope. Consequently, aid not conforming with the provisions of the Code may be authorized under the procedure provided for in Article 95 of the Treaty.

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Findings of the Court

39 It must first be pointed out that, in fact, although alleging that the Commission 'lacks competence' to adopt the decisions at issue, the applicant maintains, essen- tially, by its first plea that the two contested decisions run counter to the Aid Code and thereby contravene the principle that an act of general application cannot be amended by an individual decision.

40 It is appropriate first to consider the legal context of the contested decisions. Article 4(c) of the Treaty prohibits, in principle, State aid within the European Coal and Steel Community to the extent to which it is Hable to undermine attain- ment of the essential objectives of the Community laid down by the Treaty, in particular the establishment of conditions of free competition. According to that provision, '[t]he following are recognized as incompatible with the common mar- ket for coal and steel and shall accordingly be abolished and prohibited within the Community, as provided in this Treaty: ... (c) subsidies or aids by States ... in any form whatsoever'.

43 T h e a b o v e m e n t i o n e d p r o v i s i o n s of Article 95 e m p o w e r the C o m m i s s i o n t o a d o p t a decision or a r e c o m m e n d a t i o n w i t h the u n a n i m o u s assent of t h e C o u n c i l and after the E C S C C o n s u l t a t i v e C o m m i t t e e has been consulted, in all cases n o t p r o - vided for b y the Treaty in w h i c h such a decision or r e c o m m e n d a t i o n appears n e c - essary in o r d e r t o attain, w i t h i n the c o m m o n m a r k e t in coal and steel and in accordance w i t h Article 5, o n e of t h e objectives of the C o m m u n i t y set o u t in Articles 2, 3 and 4. T h e y p r o v i d e that a n y decision or r e c o m m e n d a t i o n so m a d e is t o d e t e r m i n e w h a t penalties, if any, m a y be i m p o s e d . It follows that, t o t h e extent to which, in contrast with the EC Treaty, the ECSC Treaty confers on the Com- mission or the Council no specific power to authorize State aid, the Commission is empowered, by the first and second paragraphs of Article 95, to take all measures necessary to attain the objectives of the Treaty and, therefore, to authorize, under the procedure thereby established, such aid as seems to it to be necessary to attain those objectives.

44 The Commission is thus competent, in the absence of any specific Treaty provi- sion, to adopt any general or individual decision necessary for attainment of the objectives of the Treaty. The first and second paragraphs of Article 95, which con- fer that power upon it, do not give any specific indication of the scope of the decisions which the Commission may adopt. In those circumstances, it is for the

47 It should be borne in mind that the aid code applicable in the period covered by the contested decisions was established by Commission Decision N o 3855/91 of 27 November 1991, cited above. This was the Fifth Aid Code which, as provided in Article 9 thereof, entered into force on 1 January 1992 and applied until 31 December 1996. Based on the first and second paragraphs of Article 95 of the Treaty, that code was expressly stated to continue the series of earlier codes (see, in particular, Commission Decisions Nos 3484/85/ECSC of 27 November 1985 and 322/89/ECSC of 1 February 1989 establishing Community rules for aid to the steel industry, OJ 1985 L 340, p. 1, and OJ 1989 L 38, p. 8, respectively) by refer- ence to which it may therefore be interpreted. It may be seen from its preamble (see in particular point I of the grounds of Decision N o 3855/91) that it was intended in the first place 'not to deprive the steel industry of aid for research and development or for bringing plants into line with new environmental standards'. In order to reduce production overcapacity and restore balance to the market, it also authorized, under certain conditions, 'social aid to encourage the partial clo- sure of plants or finance the permanent cessation of all ECSC activities by the least competitive enterprises'. Finally, it expressly prohibited operating or investment

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aid, with the exception of 'regional investment aid in certain Member States'. The possibility of such regional aid was available to undertakings established in Greece, Portugal or the former German Democratic Republic.

so In that light, the applicant's view that the Code is binding, exhaustive and defini- tive cannot be upheld. The Code constitutes a binding legal framework only for the types of aid enumerated by it which are compatible with the Treaty. In relation

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thereto, it establishes a comprehensive system intended to ensure uniform treat- ment, in the context of a single procedure, for all aid within the categories which it defines. The Commission is only bound by that system when assessing the com- patibility with the Treaty of aid covered by the Code. It cannot therefore authorize such aid by an individual decision conflicting with the general rules established by that code (see Case 113/77 NTN Toyo Bearing and Others v Council [1979] ECR 1185 (the 'ball bearings case'); Case 118/87 ISO v Council [1979] E C R 1277; Case 119/77 Nippon Seiko and Others v Council and Commission [1979] ECR 1303; Case 120/77 Koyo Seiko and Others v Council and Commission [1979] ECR 1337; Case 121/77 Nachi Fujikoshi and Others v Council [1979] E C R 1363 and Joined Cases 140/82, 146/82, 221/82 and 226/82 Walzstahl-Vereinigung and Thyssen v Commission [1984] ECR 951, and Joined Cases 33/86, 44/86, 110/86, 226/86 and 285/86 Peine-Salzgitter and Hoogovens v Commission [1988] E C R 4309, and CIRFS v Commission, cited above).

53 In those circumstances, the contested decisions cannot be regarded as unjustified derogations from the Fifth Aid Code but constitute measures based, like that code, on the first and second paragraphs of Article 95 of the Treaty.

54 It follows that the plea alleging lack of competence has no basis: the Commission could not in any circumstances, by adopting the Aid Code, relinquish the power conferred on it by Article 95 of the Treaty to adopt individual measures in order to deal with unforeseen situations. Since in this case the Aid Code does not cover the economic situations which prompted it to adopt the contested decisions, the Com- mission was entitled to rely on Article 95 of the Treaty in order to authorize the aid in question, provided that it observed the conditions for the application of that provision.

55 It follows that the decisions at issue are not vitiated by any lack of competence on the part of the Commission to adopt them.

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2. The second plea in Uw: frustration of legitimate expectations

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59 The applicant in fact reasonably expected, at the time of its privatization in 1988, that it would be able to build on its strongly cost-competitive position. It made investments in the reasonable hope that an efficient, low-cost producer would be able to expand profitably and would not be thwarted by less efficient producers benefiting from State subsidies. Similarly, in 1991 it reacted to market forces in the legitimate expectation that they would operate elsewhere in the Community, forc- ing the least efficient producers to withdraw from the market and close plant, thus allowing it and other efficient producers to earn adequate profits and fulfil their shareholders' expectations of a proper return on their investments.

60 British Steel contests the Commission's argument that its legitimate expectation was in any event undermined by the conduct of that institution after 1 January 1992, in so far as several documents from Commission departments, together with the Council's conclusions of 25 February 1993, supported the view that the grant of public aid to certain public undertakings was now inevitable as a result of the seriousness of the crisis afflicting the European steel industry. According to the applicant, even if there was a risk that a political decision might authorize unlawful aid, it was wholly logical to expect the Commission to bear in mind that the Aid Code should be respected without any exception, so as not to give rise to discrimi- nation between the undertakings concerned.

62 According to the Commission, a measure of general application such as the Fifth Aid Code cannot validly give rise to a legitimate expectation. The conditions laid down by each code depend on the economic circumstances of the Community steel industry at the relevant time: the situation changed as time went on and became particularly serious around 1992. It was wholly justified, according to the Commission, to adopt measures intended to deal with the threat to the very future of the steel industry in certain countries. Consequently, the mere existence of an aid code could not give rise to legitimate expectations. Furthermore, there is noth- ing to show that the applicant actually acted in reliance on any legitimate expecta- tion when it closed certain plants. Finally, even if the Aid Code did actually create a legitimate expectation, it would in the Commission's view have been vitiated by the subsequent conduct of the Community institutions. In its correspondence with British Steel, the Commission often emphasized that recourse to Article 95 could not be excluded, even during the period of application of the Aid Code.

63 The Council also rejects the view that the applicant could have entertained any legitimate expectation, in reliance on the Aid Code, that the aid in question would not be authorized. The idea of legitimate expectations cannot be associated with a measure which may be adapted to take account of changes in the economic situa- tion. Moreover, the applicant contradicts itself in recognizing that the Aid Code could have been amended so as to allow the Commission to adopt the contested decisions under the Code. Since the Aid Code was adopted on the same legal basis as the decisions in question, the Council does not understand why the Commis- sion could not have legitimately adopted the decisions given that the procedures would be the same.

66 Ilva endorses all the arguments put forward by the Commission and the other interveners supporting it. The existence of an aid code cannot legitimately give rise to the expectation that the Commission would authorize no aid measure not cov- ered by that code. The latter is a manifestation of the discretion afforded to the Commission in order to pursue the objectives of the Treaty and reflects the econ- omic conditions prevailing when it was adopted. Furthermore, the applicant has not demonstrated fulfilment of the strict conditions for legitimate expectations to arise. It has not proved that, in its conviction that the Aid Code would not be amended, it placed itself in a situation which could not be changed. In addition, even if the Aid Code could in fact give rise to a legitimate expectation, the appli- cant has failed to produce any evidence that the contested decisions brought about a sudden or unforeseen change in its circumstances and that consequently its legiti- mate expectation was frustrated. The applicant was aware of all the relevant initia- tives taken by the Commission before the adoption of the decisions and of the events which preceded them.

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Findings of the Court

O n the admissibility of the new arguments put forward by SSAB Svenskt Stål based on the EEA Agreement

67 The Swedish undertaking SSAB Svenskt Stål, intervening in support of British Steel, has raised arguments concerning the EEA Agreement. As far as frustration of legitimate expectations is concerned, it refers to the ECSC Aid Code, but in the form in which it was included in Annex XV to the EEA Agreement by Article 5 of Protocol XIV to the same agreement. Those arguments have not been raised by the applicant. Furthermore, the intervener alleges only a breach of the principle of protection of legitimate expectations with respect to itself and not with respect to the applicant.

7i In this case, the point is whether SSAB Svenskt Stål's arguments must be regarded as admissible in the light of the procedural provisions and case-law cited above. In other words, the question to be asked is whether, although falling within the scope of the applicant's submissions (that is to say, the form of order sought by it), those arguments seek to alter the 'framework of the dispute' or whether they leave it untouched in substance.

72 The Court observes that the intervener examines the Aid Code in relation to the EEA Agreement, in support of its view that its own legitimate expectations have been frustrated. That argument cannot be entertained, since, first, it seeks only to establish a breach of the principle of legitimate expectations as regards the inter- vener and not the applicant and, secondly, it relates to the EEA Agreement, thus altering the framework of the dispute as defined by the applicant.

73 It follows that the arguments advanced by SSAB Svenskt Stål in connection with the second plea in law cannot be declared admissible.

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O n the merits of the plea

77 The proper functioning of the common market in steel clearly involves the obvious need for constant adjustments to fluctuations in the economic situation and econ- omic operators cannot claim a vested right to the maintenance of the legal situation

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existing at a given time (see Case 230/78 Eridania v Minister for Agriculture and Forestry [1979] ECR 2749, paragraph 22, and Case T-472/93 Campo Ebro and Others v Council [1995] ECR 11-421, paragraph 52). Moreover, the Court of Jus- tice has also used the term 'prudent and discriminating traders' to emphasize that, in certain circumstances, it is possible to foresee the adoption of specific measures intended to deal with clear crisis situations, with the effect that the principle of the protection of legitimate expectations cannot be relied upon (Case 78/77 Liihrs v Hauptzolhmt Hamburg-Jonas [1978] ECR 169).

78 In that context, the applicant should, on any view, having regard to its very sub- stantial economic importance and its participation on the ECSC Consultative Committee, have realized that an overriding need to adopt effective measures to safeguard the interests of the European steel industry would arise and that recourse to Article 95 of the Treaty might justify the adoption of ad hoc decisions by the Commission, as had already happened on several occasions whilst the Aid Code was in force. In that connection, the Commission rightly refers to Decision 89/218 of 23 December 1988, cited above, and Decision 92/411/ECSC of 31 July 1992 on the granting of aid to steel undertakings by the Danish and Dutch Gov- ernments (OJ 1992 L 223, p. 28), which authorized certain State aid outside the aid code in force at the time of their adoption.

Arguments of the parties

si According to British Steel, a measure cannot be validly adopted on the basis of the first two paragraphs of Article 95 unless it is necessary to attain the objectives set out in the Treaty. In this case, the only objective identified in the preamble to the contested decisions is to provide the Italian and Spanish State-owned steel indus­ tries with a sound and economically viable structure. The grant of State aid to such industries does not contribute to providing them with such a structure in the long term. The aid granted to the undertakings concerned in the past never attained that objective and it is highly improbable that the aid in question will do so in the future. Conversely, such aid prolongs the existence of inefficient production plants and allows excess capacity to be maintained, thus giving rise to a fall in prices and a loss of profitability in the European steel industry as a whole. British Steel refers in that connection to the aid granted in the past to the Italian undertakings Ilva and its predecessor Finsider, and to the Spanish undertaking CSI: notwithstanding the aid authorized by the Commission in 1989 for Ilva and in 1987 for CSI, theň- viability was not restored, as the Commission implicitly recognizes in the pre­ amble to the contested decisions.

82 More specifically, the aid authorized by the contested decisions will not enable the viability of Ilva and CSI to be assured, firstly because of the specific economic situation of those two undertakings, which, according to press articles, suffered heavier losses than expected in 1992 and 1993, being forced as a result either to slow down the necessary rationalization or to increase their borrowings, thus com­ promising their future viability. Secondly, the ineffectiveness of such aid is appar­ ent from the general prospects of the Community steel industry, which is charac­ terized by excess production capacity. In those circumstances, the only effect of the aid in question will be to enable the recipients of it to increase their market shares by selling their products at prices below the actual production costs, to the detriment of more efficient undertakings.

86 The contested decisions are intended to provide the undertakings concerned with a sound and economically viable structure by means of restructuring measures based

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on capacity reductions. They thus involve Community aid, in that they pursue objectives that are defined by the Treaty and are compatible with the sound func- tioning of the Community steel market. The Community's policy on aid for the restructuring of the steel industry must also take account of certain objectives of a social nature defined in Article 3(c), (d), (e) and (g) of the Treaty. In order to deal with the crisis, the Commission thus reconciled the requirements of safeguarding continuity of employment and the need to limit intervention and maintain normal conditions of competition.

87 From that standpoint, the criticisms made of the contested decisions in the Cock- erill report are based on a purely theoretical analysis of the economics of the steel industry and an incomplete knowledge of the facts. Moreover, the report fails to acknowledge the complexity and diversity of the aims which the Commission must take into account.

88 The Council endorses the Commission's argument that the applicant should dem- onstrate that an error was committed in assessing the need for the aid in question to be granted, with a view to attainment of the objectives of the Treaty. The appli- cant, it maintains, has failed to produce any evidence to that effect.

9i Ilva contests the use made by British Steel of the economic criteria relied on in the Cockerill report. Many of the applicant's criticisms regarding the content of the contested decisions merely seek to cast doubt on the facts on which the Commis- sion based its assessment. However, the Community judicature is not entitled to substitute its assessment for that of the competent authority but must limit its review to ensuring that there has been no manifest error or misuse of powers, rely- ing on the information available when the contested decisions were adopted. In any event, the applicant's allegations that the aid granted to Ilva does not enable the objectives pursued to be attained have no basis. O n the contrary, that aid made it possible to achieve a higher ratio between the gross operating margin and the turnover of the beneficiary undertaking, well above the European average. That the aid received by Ilva was properly used was officially confirmed in a report drawn up by an independent consultant appointed by the Commission. Ilva's viability was therefore restored as a result of intervention which will help defend the common market in steel from the disastrous consequences of the world crisis affecting the sector. It should also be borne in mind that, having fulfilled the condi- tions imposed by the Commission for authorization of the aid, Ilva fully imple- mented the restructuring plan, and in so doing sold 100% of the capital of Ilva and of Acciai Speciali Terni to private undertakings. As to the argument that Ilva could continue to sell at any price in order to remain in business, the intervener states that the aid authorized by the Commission cannot be used for the purposes of unfair competition and that Article 5(2) of the contested decision relating to it pro- vides for the opening of an investigation pursuant to Article 60 of the ECSC Treaty.

94 According to the second paragraph of Article 34 of the Statute of the Court of Justice, submissions made in an application to intervene are to be limited to sup- porting the submissions of one of the parties. Moreover, pursuant to Article 116(3) of the Rules of Procedure, an intervener must accept the case as he finds it at the time of his intervention.

95 H a v i n g regard t o t h o s e p r o c e d u r a l p r o v i s i o n s , as i n t e r p r e t e d b y t h e j u d g m e n t s cited in p a r a g r a p h 70 above, the q u e s t i o n t o b e asked is w h e t h e r SSAB Svenskt Stål's a r g u m e n t s , a l t h o u g h falling w i t h i n t h e s c o p e of t h e applicant's s u b m i s s i o n s (that is to say, the form of order sought by it), seek to alter the framework of the dispute or whether, on the contrary, they leave it untouched in substance and may therefore be regarded as admissible.

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96 In this case the intervener alleges infringement of Article 97 et seq. of the EEA Agreement. The Court considers that, if that argument were to be accepted as admissible, the framework of the dispute would be widened in that a new and independent plea in law would be introduced: new because it relates solely to the decision-making procedure established by Article 97 of the EEA Agreement and was not raised by the applicant at any stage of the written procedure; and inde- pendent because it has no connection with the infringement of Article 95 of the Treaty and the fundamental principles referred to by the applicant. SSAB Svenskt Stål is in fact seeking to introduce a new plea alleging infringement of procedural rules relating to the EEA Agreement, whereas the present proceedings are con- cerned solely with the legal context of the ECSC Treaty.

Commission, for the purpose of such implementation, considers in its discretion whether aid intended to accompany the restructuring measures is compatible with the fundamental principles of the Treaty.

too In this case, it is not disputed that, at the beginning of the 1990s, the European steel industry was beset with a sudden and serious crisis through the combined effect of several factors such as the international economic recession, loss of tradi- tional export outlets, a steep increase in competition from steel industries in devel- oping countries and the rapid growth of Community imports of steel products from the member countries of the Organization of Petroleum Exporting Countries (OPEC). It is against the background of that crisis that, in this case, it should be considered whether the aid in question was necessary, as required by the first and second paragraphs of Article 95 of the Treaty, with a view to attaining the funda- mental objectives of the Treaty.

101 The contested decisions clearly indicate, in point IV of their grounds, that their purpose is to reorganize the steel industry in the Member State concerned. According to the decision concerning aid for CSI, 'providing the Spanish public integrated steel industry with a sound and economically viable structure contrib- utes towards the objectives of the ECSC Treaty, in particular Articles 2 and 3'. In Decision 94/259/ECSC concerning aid to be granted to Ilva, the Commission expresses the same idea in slightly different words. It states: 'providing the Italian steel industry with a sound and economically viable structure contributes to achieving the objectives laid down in the ECSC Treaty'.

ios Against that background, it must be borne in mind first of all that, in view of the diversity of the objectives determined by the Treaty, the Commission's role con- sists, according to settled case-law, in ensuring that those various objectives are reconciled at all times, exercising the discretion available to it in order to meet the requirements of the common interest (see Case 9/56 Meroni v High Authority [1958] ECR 133, Part B, grounds 3-5, Case 8/57 Aciéries Belges v High Authority [1958] ECR 245, Part B, ground 3, and Joined Cases 351/85 and 360/85 Fabrique de Fer de Charleroi and Diliinger Hüttenwerke v Commission [1987] E C R 3639, paragraph 15). In particular, in Joined Cases 154/78, 205/78, 206/78, 226/78, 227/78, 228/78, 263/78, 264/78, 31/79, 39/79, 83/79 and 85/79 Valsabbia and Oth- ers v Commission [1980] ECR 907, paragraph 55, the Court of Justice held c[i]f the need for a compromise between the various objectives is imperative in a normal market situation, it must be accepted a fortiori in the state of crisis justifying the adoption of exceptional measures which derogate from the normal rules governing the working of the common market in steel and which clearly entail non- compliance with certain objectives laid down by Article 3, if only that objective (contained in paragraph (c)) which requires that the establishment of the lowest prices be ensured'.

loe In this case, the Court finds that the contested decisions reconcile various objec- tives of the Treaty, with a view to safeguarding important interests.

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ios In those circumstances the contested decisions, by seeking to resolve those diffi- culties by reorganizing the steel undertakings benefiting from the aid in question, are incontestably designed to safeguard 'continuity of employment' and to avoid provoking 'fundamental and persistent disturbances in the economies of the Mem- ber States', as required by the second paragraph of Article 2 of the Treaty. More- over, they pursue the objectives embodied in Article 3 concerning, inter alia, 'maintenance of conditions which will encourage undertakings to expand and improve their production potential' (paragraph (d)) and the promotion of 'orderly expansion and modernization of production, and the improvement of quality, with no protection against competing industries' (paragraph (g)). They are designed to rationalize the European steel industry, in particular through definitive closure of obsolete or uncompetitive plant (for example Bagnoli in Italy, Aviles, Gijón, Viz- caya and Ansio in Spain) and the irreversible reduction of production capacity for certain products (for example at Taranto, in Italy) with a view to dealing with excess capacity (see Article 2 of the contested decisions). They, together with the other four individual decisions mentioned above, authorizing State aid and adopted on the same day, thus form part of a comprehensive programme for restructuring the steel industry on an enduring basis and reduction of production capacity in the Community (see paragraphs 4 to 6 above). Accordingly, it must be

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112 With regard to State aid, the Court of Justice has consistently held that 'the Com- mission has a discretion the exercise of which involves economic and social assess- ments which must be made in a Community context' (Case 730/79 Philip Morris v Commission [1980] E C R 2671, paragraph 24, Matra v Commission, cited above,

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and Joined Cases T-244/93 and T-486/93 TWD v Commission [1995] ECR 11-2265).

in As far as the present plea in law is concerned, involving as it does a complex econ- omic and technical assessment, the Court's review must, according to settled case- law, therefore be limited to verifying that the facts are materially accurate and that there has been no manifest error of assessment (see Case T-17/93 Matra Hachette v Commission [1994] ECR 11-595, paragraph 104, and Case T-9/93 Schöller v Commission [1995] ECR 11-1611, paragraph 140, and Case T-266/94 Skibsværfts- foreningen and Others v Commission [1996] ECR 11-1399, paragraph 170).

114 In this case, in support of its view that the aid granted to CSI and Ilva is 'not necessary', the applicant insists in particular that, in view of past experience and of the excess production capacity in the steel industry, any attempt to restore the viability of the undertakings in question in this case by means of State aid will inevitably fail, with serious repercussions for the general balance of the common market.

us As regards the applicant's arguments concerning the alleged unforeseen losses suf- fered by Ilva and CSI in 1992 and 1993, and the prevailing excess production capacity in the steel industry, they too are without any foundation. The applicant fails to take into account the precautions taken by the Commission in the con- tested decisions with a view to ensuring the viability of Ilva and CSI, in particular by resolving the problem of those undertakings' debts (see point II of the grounds of the contested decisions), whilst at the same time limiting the financial restruc- turing measures to the amounts strictly necessary, so as not to 'affect the condi- tions of trade in the Community steel industry to an extent which is incompatible with the common interest' (point VI of the grounds of the contested decisions). In that respect, the Court finds that the Commission, in order not to provide the beneficiary undertakings with an undue advantage over other undertakings in the sector, took care in the contested decisions in particular to ensure that the under- takings concerned did not at the outset have their net financial charges reduced below 3.5% of annual turnover (3.2% in the case of AST, Acciai Speciali Terni) which, according to the Commission, which has not been contradicted on that point by the applicant, represents the present average for Community steel under- takings. More generally, Article 2 of the contested decisions imposes certain condi- tions intended to ensure that the financing aid is limited to what is strictly neces- sary. In view of those considerations, the applicant's argument designed to show

no As regards Ilva's situation, chapter 2 of the Commission's communication to the Council and to the ECSC Consultative Committee of 15 December 1993 (SEC(93) 2089 final) requesting the assent of the Council and the opinion of the Consulta- tive Committee under Article 95 of the Treaty contains an analytical description of the prospects of the undertakings' (ILP and AST) achieving viability as a result of privatization of the Ilva group (points 2.5 and 2.6), as accepted by the Council, and

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121 Finally, as regards the applicant's argument that the Commission had other means available involving less distortion than the aid in question, with a view to restoring the viability of the undertakings concerned, which shows in its view that the aid was not necessary, the Court considers that, even if the alternative solutions were envisageable and applicable in practice, which has not been established, the exist- ence of such options does not in itself suffice to vitiate the contested decisions, since the course adopted by the Commission evinces no manifest error of assess- ment or misuse of power. It is not for the Court to examine the appropriateness of the choice made by the Commission since to do so might involve substituting its own assessment of the facts for that made by the Commission.

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122 It follows that the applicant has put forward no convincing argument to suggest that the contested decisions were not adopted in accordance with the conditions laid down by the first and second paragraphs of Article 95 of the Treaty, particu- larly as regards the need to authorize the aid in question in order to attain the objectives of the Treaty.

123 It follows that the contested decisions are not rendered unlawful by any infringe- ment of the first and second paragraphs of Article 95 of the Treaty.

The alleged breach of the principles of proportionality and non-discrimination

125 The contested decisions also, in the applicant's view, contravene the principle of proportionality, as defined by the Court of Justice. The means employed by the Commission were not consonant with the importance of the objectives pursued and were not necessary for their attainment. Moreover, according to the applicant, the discriminatory element in the contested decisions is not only an independent ground for their annulment but also an important element showing that the con- tested decisions infringe the principle of proportionality, since they impose on undertakings in the same situation as the applicant a competitive disadvantage which is wholly disproportionate to the Commission's declared aim, thereby jeop- ardizing the equilibrium of the market.

128 The Kingdom of Spain also concedes that the Commission may not authorize aid involving manifest discrimination between the public and private sectors. That was not done in this case. The undertakings involved, namely British Steel and CSI, are not in comparable situations, the latter being obliged, in consideration of the aid authorized, to reduce its capacity whereas the former is not engaged in any new restructuring effort. As regards the alleged breach of the principle of proportional- ity, the applicant has not proved any imbalance whatsoever between the means used by the Commission and the aims pursued. Authorization of the aid in ques- tion forms part of the Community's strategy to deal with the crisis in the steel industry.

129 Ilva states that the Commission had informed the Community undertakings of the restructuring plan which it proposed implementing, and asked each of them to par- ticipate in the general effort to reduce capacity so as to achieve genuine reorganiza- tion of the European steel industry. The Commission thus did not favour Ilva at the expense of its competitors but authorized aid in return for fulfilment of spe- cific commitments. There is thus no question of any breach of the principle of non-discrimination, since different situations were assessed differently.

Findings of the Court

no The Court considers it appropriate to examine the complaint concerning breach of the principle of proportionality before the complaint alleging breach of the principle of non-discrimination.

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134 Moreover, according to settled case-law, the Commission enjoys in this area a 'wide discretion ... reflecting the political responsibilities' which it exercises (see Case C-8/89 lardi [1990] ECR 1-2515, paragraph 11). Consequently, only if a decision adopted by the Commission is 'manifestly inappropriate' or dispropor- tionate having regard to the objective pursued will the legality of that decision be

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affected (see Case 179/84 Bozzetti v Invernizzi [1985] ECR 2301 and Case 265/87 Schräder [1989] ECR 2237, paragraph 22).

ns In this case, it must be emphasized at the outset that the aid in question contrib- utes to the attainment of certain objectives of the Treaty by restoring the viability of the beneficiary undertakings and was necessary for that purpose, as held earlier (see paragraphs 98 to 123 above). In the light of the case-law cited above, and con- trary to the applicant's assertions, that aid is not therefore inappropriate having regard to the economic and social objectives pursued through such restoration of viability. However, for the contested decisions to be regarded as in conformity with the principle of proportionality, in a market characterized by excess produc- tion capacity, the question must also be considered whether they require the ben- eficiary undertakings to make appropriate closures and reductions of capacity as a counterpart to the aid authorized.

approved, so that a major contribution is made to the structural adjustment required in the sector'. Furthermore, in point VI of the grounds of that decision, it is stated that '[i]t is not only necessary to ensure ... that the aid approved enables the company to return to viability by the end of 1996 ... the aid must also be kept to the amount strictly necessary. In that context, it must also be ensured that the company does not, as a result of the financial restructuring measures, obtain an unfair advantage over other companies in the sector'. In points V and VI of the grounds of Decision 94/259 concerning Ilva, the Commission states that '[s]o as to limit the impact on competition to the minimum, it is important that the Italian public steel sector should make a crucial contribution to the structural adjustment still necessary in that sector, through capacity reductions carried out in return for the aid' and that '[t]he granting of operating aid must be limited to what is strictly necessary'. The grounds of the two contested decisions thus contain a justification for the criteria used to determine the reductions of capacity to be effected. In the case of Ilva, the reductions of capacity total 1.7 million tonnes per year in Taranto through the demolition of reheating furnaces and complete closure of the Bagnoli plant. The decision concerning CSI imposes capacity reductions of the order of 2.3 million tonnes of pig iron at Aviles and Vizcaya, 1.423 million tonnes of crude steel at Gijón and Vizcaya, and 2.3 million tonnes of hot-rolled coil at Ansio. Moreover, Article 1(3) of the two decisions states that '[t]he aid shall not be used for the purpose of unfair competition practices', and if it is the Commission may require suspension of payments of aid or the recovery of aid already paid, without preju- dice to any penalties it might impose (Article 6(1) of the decisions).

142 According to settled case-law, discrimination arises where like cases are treated dif- ferently, so that some traders are subjected to disadvantages and others are not, and such difference in treatment is not justified by the existence of substantial objective differences (Case 250/83 Finsider v Commission [1985] ECR 131, para- graph 8). With respect to aid to the steel industry in particular, the Court of Justice has held that there is unequal treatment and therefore discrimination where a decision authorizing aid gives rise 'to different advantages for steel undertakings placed in the same situation or to identical advantages for steel undertakings placed in appreciably different situations' {Germany v Commission, cited above, para- graph 36).

143 The question of discrimination regarding aid as between the public and private sec- tors under the Treaty was examined in the judgment in Falck v Commission, cited above. After emphasizing that the responsibility for granting aid falls primarily upon the government concerned, the Court of Justice clarified the role of the Commission in the following terms: '[i]t is true ... that although any aid measure is likely to favour one undertaking in relation to another, the Commission cannot approve aid the grant of which may result in manifest discrimination between pub- lic and private sectors. In such a case the grant of aid would involve distortion of competition to an extent contrary to the common interest' (paragraph 27).

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144 In this case, to determine whether the contested decisions are discriminatory it is necessary to verify whether they involve distortions of competition to an extent contrary to the common interest.

147 Moreover, it must be borne in mind that, as already held (see paragraphs 131 to 139 above), the advantages afforded to the undertakings to which the aid in ques- tion was granted are proportionate to the objectives pursued, as a result in particu- lar of the counterpart obligations imposed on those undertakings (plant closures and reduction of production capacity). Furthermore, the distortions of compe- tition resulting from the contested decisions are limited to what is strictly neces- sary (see paragraph 118 above) and are justified by the very aim of the decisions — restoration of a sound and profitable structure for the beneficiary undertakings — which has been held to be compatible with the Treaty (see paragraphs 103 to 108 above). Finally, Article 1(3) of the decision states '[t]he aid shall not be used for the purpose of unfair competition practices'. Pursuant to Article 6(1) of the contested decisions, if any of those obligations is not observed, the Commission may require the suspension of payment or recovery of the aid in question (see paragraph 137 above).

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148 In those circumstances, the Court finds that the Commission acted in the common interest, appraising the various interests involved and ensuring that important interests were safeguarded, whilst at the same time avoiding unfavourable conse- quences for other economic operators to the extent to which the very subject- matter and the purpose of the contested decisions allowed.

The alleged inadequacy of the statement of reasons

Arguments of the parties

152 According to British Steel, supported by SSAB Svenskt Stål, the Commission failed to fulfil the obligation laid down by Article 15 of the Treaty to state the reasons on which its decisions are based. According to settled case-law, even though the obligation to state reasons depends on the nature of the act in question and the context in which it was adopted, the conditions laid down by Article 15 are not fulfilled where a contested decision merely states that the prerequisites for applying the relevant provisions are satisfied (see, to that effect, Case 185/85 Usi- ner v Commission [1986] ECR 2079, paragraph 21).

153 The statements of the reasons for the contested decisions are virtually identical to those of each of the decisions adopted by the Commission on the same date autho- rizing aid for steel undertakings. In particular, the Commission does not explain either why the aid in question enabled CSI and Ilva to be provided with a sound and economically viable structure or how the objectives of the Treaty will thereby be attained. Finally, it does not specify which objectives set out in Articles 2 and 3 of the Treaty it sought to pursue.

154 The applicant understands that the Commission did obtain a report from an out- side expert, the firm W. S. Atkins, before adopting the contested decisions. Since the contested decisions hardly refer to that report and to the conclusions to be drawn from it, they do not state the reasons on which they are based with suffi- cient particularity to enable the parties to protect their rights and to enable the Court to conduct an effective judicial review.

157 The Council considers that, in the case of Ilva and CSI, the aid authorized by the Commission was clearly of a Community character and formed part of the restructuring programme for the steel industry proposed by the Commission and accepted by the Council. Moreover, British Steel was closely involved in the pro- cedure leading to the adoption of the contested decisions, and could not therefore claim that it was not fully aware of the reasons which prompted their adoption.

iss According to the Kingdom of Spain, a Community institution is not required to give details of all relevant factual and legal aspects. The statement of the reasons for a decision must take account of its context and all the legal rules governing the matter in question (see Case C-213/87 Gemeente Amsterdam and VIA v Commis- sion [1990] ECR 1-221). In this case, the statements of the reasons for the contested decisions are more than adequate, since the Commission deals point by point with each of the conditions justifying the adoption of the measures concerned, and also with the legal basis and the monitoring measures required.

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Findings of the Court

159 The fourth indent of the second paragraph of Article 5 of the Treaty provides that the Community is to 'publish the reasons for its actions'. The first paragraph of Article 15 states '[d]ecisions, recommendations and opinions of the Commission shall state the reasons on which they are based and shall refer to any opinions which were required to be obtained'. It is clear from those provisions, and from the general principles of the Treaty, that the Commission has an obligation to state reasons when adopting general or individual decisions, whatever the legal basis chosen for that purpose.

162 As regards, first, the viability of the undertakings to which the aid was granted, the Court finds that the contested decisions clearly indicate the means by which such viability must, in the Commission's view, be restored, where they list, in particular in point II of their grounds, the various aspects of the restructuring programme supported by the aid in question. In the case of CSI, the decision relating to it expressly indicates that the plan comprises essentially a series of industrial, social and financial restructuring measures which it describes concisely. It also refers, for example, to the principal measures intended to restabilize the financial organiza- tion of the undertaking, the closure of the least competitive plants and a reduction of 42% in the workforce. In the case of Ilva, it is expressly indicated in the state- ment of reasons for the decision concerning the aid granted to it that the means used to restore the viability of the undertaking will be privatization of the group, that being the essential aim of the aid in question, and a new reorganization pro- gramme, involving in particular the splitting of its core business into two new companies in the manner outlined in the decision.

163 Moreover, the Commission states in the contested decisions (point III of the grounds) that, in assessing the viability of the respective restructuring plans, it applied the same criteria as those imposed by it during the previous restructuring of the Community steel industry. Those criteria could not therefore be unknown to those active in the market, the applicant in particular. Moreover, the applicant had itself benefited from the grant of State aid to facilitate its privatization, accord- ing to the assertions of the intervener Ilva, which have not been disputed. In those circumstances, by specifying the main elements of the abovementioned restructur- ing plans, the contested decisions sufficiently indicated the reasons for which the aid in question would, in the Commission's view, enable CSI and Ilva to be pro- vided with a sound and viable structure.

165 Moreover, the statements of the reasons for the contested decisions, as far as the viability of the beneficiary undertakings is concerned, are substantially supple- mented and developed by the documents in the file. As regards CSI's situation, the Commission produced the full text of its communication to the Council of 5 November 1992 (doc. SEC(92)1916 final) concerning the restructuring of CSI fol- lowing notification of a plan for the reorganization of that undertaking by the Spanish Government. That document contains a detailed analysis of the conditions for the viability of the new company resulting from the takeover by CSI of AHV (Altos Hornos de Vizcaya) and Ensidesa (see paragraph 119 above). Moreover, a version of the Atkins report concerning CSI, with confidential information removed, was supplied by the Commission with its supplementary answer, dated 30 June 1995, to the questions put to it by the Court. That version illustrates in great detail the expert's working method and the options taken into consideration in working out a reliable basis for CSI to become viable again.

166 As regards Ilva's situation (Decision 94/259), the Commission also produced the full text of its communication of 15 December 1993 to the Council (doc. SEC(93)2089 final) in which it requested the Council's assent under the first paragraph of Article 95 of the Treaty. That communication reproduces in part the content of an earlier communication of 10 November 1993 (doc. SEC(93)1745 final). It contains a detailed analysis of the conditions for the viability of the

us Moreover, the lack of foundation for the complaints just examined is further con- firmed by the fact that it is not disputed that the applicant was closely involved in the procedure preparatory to the adoption of the decisions, which detracts from the necessity of an extremely detailed statement of reasons concerning the facts on which the contested decisions were based (see Case 13/72 Netherhnds v Commis- sion [1973] E C R 2 7 ) .

169 It follows from all the foregoing considerations that the contested decisions are not rendered unlawful by any inadequacy of their statements of reasons.

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The alleged absence of a contentious procedure

Arguments of the parties

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regarding time-limits, which may of course vary depending on the urgency and importance of the decision to be adopted by the Commission.

172 The Commission, supported by the Council and the Italian Republic, states that the obligation to open a contentious procedure of the kind provided for by Article 6(4) of the Aid Code is not provided for in the first paragraph of Article 95 of the Treaty. Recourse to Article 6 of the Aid Code would be simply inappropriate in this case; the Commission might open the procedure to establish whether the pay- ments in question did actually constitute aid. However, in this case, it was clear from the outset that the proposed restructuring plans constituted aid incompatible with the Code. In any event, the Commission considers that Article 95 conferred on the applicant greater procedural rights than would have been afforded to it under Article 6. The applicant in fact had a longer period to make representations, both directly and through the ECSC Consultative Committee. As regards Article 6, it merely obliged the Commission to seek the views of the Member States before taking a decision on the compatibility of proposed State aids; by contrast, the adoption of the decisions in question under Article 95 required the unanimous assent of the Council, which provides much greater protection. Moreover, the existence of one procedure for authorizing aid which confers a formal role on interested parties, and another procedure which does not, is not so strange as the applicant suggests. The first subparagraph of Article 93(2) of the EC Treaty pro- vides for a procedure involving interested parties, whereas the third subparagraph of Article 93(2) provides for a procedure whereby the Member States, acting unanimously, may derogate from Article 92 in authorizing aid where this is justi- fied by exceptional circumstances. The latter procedure expressly excludes the for- mal involvement of interested parties.

176 Without its being necessary to consider whether any general principle of Commu- nity law confers on interested parties the right to be heard in a decision-making procedure regarding State aid, it must be pointed out that, in the procedure for the adoption of the contested decisions under the first paragraph of Article 95 of the ECSC Treaty, providing for consultation of the ECSC Consultative Committee, the applicant in any event had an opportunity to make its position known within that committee. Pursuant to Article 18 of the ECSC Treaty, the ECSC Consulta- tive Committee consists of members representing producers, workers, consumers and dealers. It is not disputed that British Steel, as a producer, was represented on the Committee, in that Mr Evans, a member of the Committee, was at the material

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time a Director (International Affairs) of British Steel, as he stated in his letter of 4 March 1997 in response to a question asked at the hearing by the President of the Court of First Instance. At the 310th meeting of that Committee on 12 November 1993 the matter of aid for Ilva and CSI was discussed at length (see the extracts from the minutes appended as Annex 3 to the Commission's observations), and the applicant's representative was present and gave his views on the measures pro- posed by the Commission. The revised communication concerning Ilva was dis- cussed, in the same circumstances, at the Committee meeting of 16 and 17 Decem- ber 1993.

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The alleged failure to adhere to the terms of the Council's assent

Arguments of the parties

iso British Steel states that, pursuant to the first paragraph of Article 95 of the Treaty, a decision may be taken by the Commission only with the unanimous assent of the Council. It is essential that the text of the decision adopted by the Commission be identical in every material respect to that approved by the Council. The Commis- sion has no discretion to take a decision under Article 95 of the Treaty in a form differing from that of the text approved by the Council.

isi In the case of Decision 94/259, that principle was infringed. The Commission requested the Council to assent to a proposal to authorize aid to Ilva on the express condition that the capacity reduction of 1.2 million tonnes per year at Taranto should take place irreversibly no later than 30 June 1994 and the Council assented to those proposals on that express condition. However, the operative part of the contested decision contains no condition requiring the reduction to be made before that date. The time-scale is mentioned only in the preamble to the decision and is not therefore binding. The Commission's decision thus differs in a signifi- cant respect from the text unanimously approved by the Council.

Findings of the Court

ies The Court finds that British Steel's complaint relates only to the formal legality of Decision 94/259 concerning Ilva. The applicant considers that decision to have been adopted in breach of the Council's assent, prescribed in mandatory terms by

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the first paragraph of Article 95 of the Treaty, because the time-limit of 30 June 1994 for fulfilment by Ilva of its obligation to reduce its production capacity at Taranto appears in the Commission communication of 15 December 1993 (para- graph 24), on which the Council's opinion of 22 December 1993 was based, but does not appear in the operative part of the contested decision, but only in the preamble (point II, eighth paragraph).

186 It is not disputed that the date of 30 June 1994 appeared in the programme for reorganization and privatization of the Ilva group endorsed by IRI in September 1993 and notified by the Italian Government to the Commission by letter of 13 December 1993 (see point II of the grounds of the relevant decision). N o r is it disputed that that date appeared in paragraph 24 of the communication from the Commission to the Council of 15 December 1993 on which the Council's assent was based, and does not appear in the operative part of Decision 94/259 but only in the preamble (point II).

190 The Council itself has stated that 'the wording of Article 95(1) does not impose an obligation on the Council to give its assent to the formal act' which the Commis- sion proposes to adopt and that 'the decisions adopted by the Commission were indeed consistent with what had been agreed by it'.

191 The Court concludes from this that the Council's assent related to the substance of the Commission's proposal, leaving the Commission a degree of latitude regarding the precise form that the final decision should take. The operative part of the con- tested decision (Articles 1(1), 4(1) and 6) emphasizes the absolute need to comply with the restructuring programme described in point II of the grounds of the decision, which expressly mentions the date 30 June 1994. In those circumstances, it cannot validly be claimed that the contested decision departs in any essential respect from what was approved by the Council.

192 It follows that Decision 94/259 is not rendered unlawful by any failure to adhere to the terms of the Council's assent.

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193 It follows from all the foregoing that the application for annulment must be dis- missed.

O n those grounds,

T H E C O U R T O F FIRST INSTANCE (First Chamber, Extended Composition)

hereby:

1. Dismisses the application;

2. Orders the applicant to pay the costs of the defendant and of the intervener Ilva Laminati Piani SpA;

3. Orders the Council, the Kingdom of Spain, the Italian Republic, SSAB Svenskt Stål AB and Det Danske Stålvalseværk A/S to bear their own costs.