C-288/96

GERMANY V COMMISSION

OPINION OF ADVOCATE GENERAL COSMAS delivered on 11 May 1999 *

Table of contents

I — Introduction I - 8242 II — Legal framework I - 8243 A — Treaty provisions and case-law of the Court on the extent of the Commission's powers I - 8243 B — Guidelines for the examination of State aids in the fisheries and aquaculture sector I - 8245 III — Facts I - 8247 A — The procedure prior to the adoption of contested Commission Decision 96/563/EC I-8247 B — The main points of the Commission decision I - 8250 IV — Pleadings of the parties I - 8253 V — Examination of the pleas in law I - 8253 A — First plea in law: infringement of the rights of the defence I - 8254 B — Second plea in law: incorrect findings of fact I - 8257 (a) The presentation of new material I - 8258 (b) Substance I - 8258 (1) Amount of aid 1-8259 (i) Existence of other financing possibilities I - 8259 (ii) Existence of other sureties I - 8259 (iii) Reduction of production costs I - 8260 (iv) Amount of aid and rate of interest of the loan 1-8261 (v) Market developments I - 8262 (vi) Overall assessment I - 8263 (2) Findings of fact relating to the Guidelines I - 8263 (3) Findings of fact concerning distortion of competition I - 8264 C — Third plea in law: Misapplication of Article 92(1) of the Treaty I-8265 (a) Analysis of the case-law I - 8265

* Original language: Greek.

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ceding the adoption of the decision by the I I — Legal framework Commission, the company was aware of the contents of its competitors' observa- tions and was in a position to express its opinion on them.

A — Treaty provisions and case-law ofthe Court on the extent of the Commission's powers

5. Next, the question arises, on the one hand, as to whether the obligation to state 7. Article 92(1) and (3) provide: reasons may depend upon the fact that certain factual or legal elements are not disputed during the procedure provided for under Article 93(2) of the Treaty. On the other hand, the question arises as to whether the pleas in law and facts relied '1. Save as otherwise provided in this upon by the applicant during that admin- Treaty, any aid granted by a Member State istrative procedure must be identical to or through State resources in any form those relied upon during proceedings whatsoever which distorts or threatens to before the Court. distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.

6. Lastly, the question arises as to whether a presumption exists according to which operating aid (a) is in principle incompa- tible with Article 92(1) of the Treaty; (b) distorts, by its very nature, competition and is an obstacle to intra-Community trade; and (c) cannot in principle be considered compatible with the common market within the meaning of Article 92(3)(c) of the Treaty. If those points are answered in 3. The following may be considered to be the affirmative, the further question arises compatible with the common market: as to whether the Commission can be discharged from the obligation to state reasons when issuing a decision under the procedure laid down in Article 93(2), or whether that obligation can be reduced to a minimum.

8. Article 93(2), first and second subpara- graphs, and (3) provide: 9. The Court has given numerous judg- ments regarding the scope of the powers enjoyed by Community institutions in the framework of the responsibilities laid down '2. If, after giving notice to the parties under the Treaty provisions on competition concerned to submit their comments, the and the review which the Court may Commission finds that aid granted by a undertake where those institutions enjoy State or through State resources is not substantial discretion. compatible with the common market hav- ing regard to Article 92, or that such aid is being misused, it shall decide that the State concerned shall abolish or alter such aid within a period of time to be determined by the Commission. 10. Specifically, the Court's case-law pro- vides numerous examples of judgments concerning the powers of the Commission If the State concerned does not comply with within the framework of Articles 92 and this decision within the prescribed time, the 93(2) and (3) of the Treaty. For example, in Commission or any other interested State its judgment in Matra v Commission, 2the may, in derogation from the provisions of Court stated that 'as regards the applica- Articles 169 and 170, refer the matter to tion of Article 93(3) of the Treaty, the the Court of Justice direct. Commission enjoys a wide discretion, the exercise of which involves assessments of an economic and social nature which must be made within a Community context'. The Court then goes on (in paragraph 25) to point out that in its review of legality, the Court must restrict itself to determining whether the Commission has exceeded the 3. The Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter 2 — Case C-225/91 [1993] ECR I-3203, paragraph 24.

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Consequently the following principles apply:

1.3. State aids may be granted only if they — State aids must not impede the are consistent with the objectives of the application of the rules of the common policy. common fisheries policy. Therefore in no circumstances can aids to the export of or to trade in fishery products within the Community be deemed compatible with the com- mon market;

Aids may not be conservative in their effect: they must serve to promote the rationalisation and efficiency of the production and marketing of fishery — those aspects of the common fish- products in a way which encourages eries policy that cannot be consid- and accelerates the adaptation of the ered to have been thoroughly industry to the new situation it faces at resolved, in particular as regards Community level. structural policy, may still warrant State aids provided such aids com- ply with the objectives of the common rules so as not to jeopar- dise or risk distorting the full effect of these rules; this is why they must, where appropriate, form part of guidance programmes pro- In more practical terms, aids must vided for under Community rules; provide incentives for development and adaptation which cannot be under- taken under normal market circum- stances because of insufficient flexibil- ity in the sector and the limited finan- cial capacity of those employed in it. They must yield lasting improvements — State aids which are granted with- so that the industry can continue to out imposing any obligation on the develop solely on the basis of market part of recipients and which are earnings. Their duration must therefore intended to improve the liquidity be limited to the time needed to achieve situation of their undertakings the the desired improvements and adapta- amount of which depends on the tions. quantity produced or marketed,

18. On 1 March 1994 the Government of the Land of Lower Saxony decided to provide an 80% security for an operating 14. Jadekost specialises in manufacturing loan of DEM 35 000 000 as well as offer- and marketing deep-frozen products (fish ing to cover additional liquidity require-

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ments, assessed at DEM 15 000 000, until 23. In a letter of 2 May 1994 the Land December 1996. In its decision, the Land Finance Ministry informed Jadekost that its Ministry stated that such security was application for a security had been offi- provided subject to the decision of the cially approved, and expressly indicated Land Loans Committee as well as being that the purpose of the security was to subject to approval by the Budget Commit- 'provide security for an operating loan' tee of the Lower Saxony Parliament. ('purpose of use of loan: operating funds').

19. C & L Treuarbeit — Deutsche Revi- sion prepared a business report, dated 29 March 1994, on the management of 24. A number of competitors and associa- Jadekost. The report found that Jadekost's tions in Germany, Denmark, France and planning data were realistic, but at the the United Kingdom provided the Commis- same time assessed the risk for the security sion with information indicating that the as high. Land of Lower Saxony had granted aid to Jadekost in the form of a security for an operating loan.

20. On 6 April 1994 the Land Loans Committee approved the security.

funds as operating funds. The aid would 31. By letter of 13 April 1995, the German then have complied with the Guidelines. Government stated that those parts of the security which did not have to be attributed exclusively to specific sectors should be regarded as approved aid, since the security in question had been granted in accordance with the General Directives on Securities of the Land of Lower Saxony, which had been 27. On 31 August 1994, a discussion of the approved by the Commission. The Land case took place between representatives of also maintained that, in assessing the the Commission, the Federal Ministry of legality of the aid, a comprehensive Food, Agriculture and Forestry, and the approach should be taken and the loans Lower Saxony Ministries of Economic should not be artificially separated. The Affairs, Technology and Transport and of distinction between investment loans and Agriculture and Forestry. operating loans was arbitrary and assess- ment of the legality of the aid should not be based on it. What should therefore be examined was whether and, if so, how much aid was permissible for the invest- ment in total. Consequently, there was no 28. In a letter of 1 September 1994, the operating aid incompatible with the com- Commission requested further information, mon market, because none of the condi- and the information was provided within tions listed in point 1.3 of the Guidelines the time-limit for a reply, on 13 October applied. and 2 November 1994.

32. In a Notice published in the Official 29. Subsequently, by letter of 20 February Journal of the European Communities 6 1995, the Commission notified the Federal pursuant to Article 93(2) of the EC Treaty, Republic of Germany that it had decided to the Commission informed the other Mem- initiate the procedure laid down in Arti- ber States and interested parties of the cle 93(2) of the Treaty and gave it notice to situation and invited them to submit their submit its comments within one month. comments to the Commission within one month.

38. The amount of aid corresponded in full to the loan. Jadekost thus obtained, with the assistance of the Land of Lower Sax- ony, financing which it would otherwise not have been granted on account of its financial difficulties. In other words, since, B — The main points of the Commission owing to the undertaking's severe financial decision circumstances, no credit institution would have agreed to lend to it without a State guarantee, the entire amount of the loan must be regarded as aid. Moreover, since 35. In section IV of the grounds of the the security was the precondition for grant- contested decision, the Commission out- ing the loan, it contained a clear aid lines why it considers the security granted element which — because of the very high by the Land of Lower Saxony to Jadekost risk of the security 8— corresponded in to be unlawful. full to the loan granted. Although the aid was granted by the Land of Lower Saxony, it was nevertheless to be categorised as aid granted by Germany (paragraphs 5 to 7).

36. Firstly it points out that the financial aid provided in the form of a security by the Land of Lower Saxony must be assessed in the light of Article 92(1) of the Treaty and the Guidelines (first and second para- 39. The aid in question was granted with- graphs). out any obligation being imposed on Jade- kost with regard to its use within the meaning of point 1.3 of the Guidelines (paragraph 9).

37. The subsidy granted to Jadekost was an 7 — The Commission stated (paragraph 7) that the aid deriving operating loan and thus, pursuant to Sec- from such a loan guarantee is generally equal to the difference between the rate of interest on a loan raised on tion 1.3 of the Guidelines, incompatible normal market terms and the actual rate secured by virtue of the guarantee. with the common market within the mean- 8 — According to the report of C & L Treuarbeit of 29 March ing of Article 92(1) of the Treaty. Neither 1994.

41. The aid improved Jadekost's income since it freed the company from costs which it would have had to bear in the normal course of business and the aid could not be classified under any other heading. This aid enabled Jadekost to offer its products at prices kept artificially low for the custo- 43. The Commission could not accept the mers at a specific time. Point 1.3 of the 'comprehensive approach' advocated by Guidelines specifies that this type of oper- Germany, according to which the security ating aid is fundamentally incompatible and the secured loan could not be consid- with the common market, there being no ered separately from the project as a whole, need to examine the other conditions i.e. the investment, and a Latid security of specified in Article 92(1) of the EC Treaty DEM 32 500 000 could very well have in order to establish this (paragraph 11). been granted for the investment costs, which were covered without State subsi- dies, with the result that Jadekost would not have needed the Land security to finance its operating costs. In the Commis- sion's view, when considering the legality of aid, the situation should be judged as it was 42. It was further stated that the Commis- at the time when the decision to grant aid sion considered that the aid granted to the was adopted, which in this case was early Jadekost company did in fact threaten to 1994. It was a fact that the security was distort competition. It benefited a particu- expressly sought, and granted, for an lar company (Jadekost) and reduced the operating loan and not for an investment costs to be borne by that company, which loan. A 'comprehensive approach' should be rejected, since otherwise that could include an ever-increasing number of finan- 9 — As is clear from the report of C & L Treuarbeit of 29 March 1994. cing measures (paragraph 13).

47. In section V of the contested decision the Commission examined whether the exceptions contained in Articles 92(2) and 45. For that purpose the Commission took, 93(3) of the Treaty could apply to the case as a basis, the quantities and turnover in point and came to the conclusion that amounts stated by the German Govern- they were not applicable due to the nature ment in its letter of 1 September 1995 from and objectives of the aid. the sales plan for 1994 — the year in which the aid was granted. Of the total production of 20 000 tonnes, 45% were fish products, a further 45% were meat products and 10% were ready-made dishes. In terms of turnover in the different sectors, 42.3% was accounted for by fish products, 50% by meat products and 7.7% by ready- made dishes. The Commission took turn- over as a proportion of fish products, 48. Article 1 of the contested decision resulting in a percentage of 42.3% (para- reads: graph 14).

'The aid in the form of a security provided by the Land of Lower Saxony for a loan of 46. In calculating the amount to be recov- DEM 10 688 025 granted by Germany in ered, the Commission stated that it had to 1994 to JAKO Jadekost GmbH & Co. KG be taken into account that the security only is illegal, having been granted in breach of covered 80% of the DEM 35 000 000 the rules of procedure laid down in Arti- loan, and the funds provided for the loan cle 93(3) of the EC Treaty. The aid is also secured amounted to only incompatible with the common market DEM 32 000 000, 80% of which was within the meaning of Article 92(1) of the DEM 25 600 000. On the basis of the EC Treaty.'

55. The applicant puts forward four pleas in law in which it complains of: (a) infringement of the rights of the defence; IV — Pleadings of the parties (b) incorrect findings of fact; (c) misappli- cation of Article 92(1) of the Treaty and infringement of the obligation to state reasons pursuant to Article 190 of the EC 52. The application of the Federal Republic Treaty (now Article 253 EC); (d) misappli- of Germany (hereinafter 'the applicant') cation by the Commission of Arti- was lodged at the Registry of the Court of cle 92(3)(c) of the Treaty and infringement Justice on 26 August 1996. of the obligation to state reasons.

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59. Moreover the Court has recognised that this principle requires the Member State in question to be placed in a position 57. The Commission states that, through in which it may effectively make known its inadvertence, the letters from the compet- views on the observations submitted by ing companies were not communicated to interested third parties under Article 93(2) the applicant. Nevertheless, it maintains of the Treaty and on which the Commission that this constitutes an infringement of the proposes to base its decision. The Court has rights of the defence only if the outcome of held that, in so far as the Member State had the procedure might have been different not been afforded the opportunity to com- without the omission. It considers that the ment on such observations, the Commis- observations of the competitors contained sion could not incorporate them in its nothing of relevance to the assessment of decision against that State. 12 the facts in the light of the competition rules that the applicant had not already brought to the attention of the Commission 10 — See, for instance, Case C-32/95 P Commission v Lisrestal and Others [1996] ECR I-5373, paragraph 21. during the various stages of the procedure 11 — See, for instance, Case 40/85 Belgium v Commission in which the Commission had examined the [1986] 2321, paragraph 28. contested aid. 12 — See, for instance, Case C-301/87 France v Commission [Boussac) (cited in footnote 3), paragraph 30.

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61. I would point out that, in Case of them. C-301/87 (Boussac), 14 the Court noted that the observations in question, which were lodged with the Court at its request, did not contain any information in addition to that which the Commission already possessed and of which the French Govern- ment was aware. Under those circum- 64. First, in regard to the observations of stances, the fact that the French Govern- Jadekost's competitors, which the Commis- ment did not have an opportunity to sion took into consideration before pub- comment on those observations was not lishing its Notice, it is clear from the case- likely to influence the outcome of the file that the applicant was aware of their administrative procedure. The Court contents 15 and that it was in a position to accordingly rejected that complaint. comment upon the Commission's com- plaints. 16 As can also be inferred from the Commission's letters to the German Gov- ernment, 17 as well as from those of the latter to the Commission, 18 the German Government's representatives were aware of the legal and factual context in which the

In dure, and was thus in a position to that facsimile, the applicant was requested to provide comment upon any complaints based upon various information regarding the competitive practices of Jadekost in the area of pricing and in regard to its such facts. production costs. 16 — The Commission contends that the details contained in the letters of the competing companies were discussed with the applicant during meetings held on 31 August 1994 and 13 — Ibid., paragraph 3 1 . See also Case 259/85 France v 28 November 1995. Commission [1987] 4393, paragraph 13. 17 — See also the letters of 30 June 1994 and 20 February 1995 14 — In thaï case, France had applied for the annulment of a which have been submitted as annexes B1 and B6 to the Commission decision regarding aid granted by the French Commission's defence. Government to a producer of textiles, clothing and paper 18 — Letters of 2 November 1994 and 13 April 1995 submitted products, Boussac Saint Frères. as annexes B5 and B7 to the Commission's defence.

65. It is clear from Commission Notice 95/ and stated that Jadekost had marketed its C 201/106, published on 5 August 1995 products at below production-cost prices pursuant to Article 93(2), addressed to the and had thus caused its competitors to other Member States and other interested suffer significant losses. They maintained parties, that the Commission provided that it was because of the security granted details of the legal and factual framework by the Land that Jadekost managed to within which it placed the infringement of obtain the loan. Furthermore, it is equally Community law committed by the Federal clear from a letter of 1 September 1995 Republic of Germany through aid granted from Nordsee GmbH to the Government of in the form of a security by the Land of the Land of Lower Saxony, which refers to Lower Saxony to Jadekost. 19 two previous letters that had been sent to the Land authorities on 19 August 1994 and 23 September 1994, that Nordsee GmbH had complained to the Lower Saxony Finance Ministry of Jadekost's ruinous competition towards its competi- tors. 22 Thus Nordsee GmbH expressed its doubts as to the legality of the aid and claimed that Jadekost had used the finan-

The result had been, according to Nordstern, 24 that Jadekost was brought to the brink of insolvency (konkursreif) as early as the 67. Specifically, I would point out that the beginning of 1994. 25 In addition Nord- companies Pickenpack Tiefkühlgesellschaft stern informed the Commission of devel- GmbH & Co. KG and Hussmann & Hahn opments on the market and the handling of GmbH & Co. set out, in a joint letter of the case by the Lower Saxony Landtag. 31 August 1995, 21 with reference to pre- vious letters they had submitted, inter alia, their view in regard to the legality of the aid 22 — This letter is submitted as annex B15 to the Commission's defence. 23 — This letter is submitted as annex B16 to the Commission's defence.

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68. In conclusion, I consider that the details established the facts with only partial contained in the aforementioned letters accuracy and failed to make a number of had, essentially, been brought to the atten- essential findings. tion of the applicant by means of the earlier letters of the Commission or during meet- ings and that the applicant was therefore in a position, prior to the adoption of the contested decision, to comment on them. In 71. In particular, the applicant considers, in any event, any claim to the contrary by the regard to the submission of certain new applicant would, in the light of the detailed evidence, the presentation of new findings and protracted discussions which took or the raising of new objections in the place between the Commission and the application, that is to say, after the conclu- German authorities during the various sion of the administrative procedure, that stages of the procedure, be very hard to the point in time at which the decision was justify. 26 Furthermore, I am of the opinion adopted is only of importance where the that the applicant, in its reply, has failed to preceding administrative procedure was demonstrate, in a sufficiently convincing conducted lawfully. In other words, where manner, when it learned of the information the original procedure was carried out in an contained in the letters written after pub- irregular manner, the applicant cannot be lication of the Commission Notice, that, required to comply with a strict rule that had it not been for such an irregularity, the the pleas relied upon in the application outcome of the procedure might have been should correspond to those relied upon in different. the administrative procedure.

Court, because a Member State is not latter had requested the Member State to obliged either to present a comprehensive do so. 29 and definitive evaluation of the facts or to provide legal arguments at the stage of the administrative procedure before the Com- mission. Moreover, Community law does not contain any express rules on the exclusion of objections. 76. Consequently, I am of the view that any new facts which the applicant has put before the Court and which it failed to draw to the attention of the Commission, despite being requested to do so during the administrative procedure, may not be taken into consideration, even where what are involved are facts that are adduced in a (a) The presentation of new material complementary capacity and whose impor- tance was not recognised by the applicant until after the contested decision had been adopted. That is because, in order for the Court to be able to review the legality of 74. According to the settled case-law of the the contested decision, it is necessary for Court, 27 the legality of a decision concern- the arguments raised in the administrative ing aid is to be assessed in the light of the procedure to correspond to the pleas in law information available to the Commission contained in the application. when the decision was adopted. As pointed out by Advocate General Darmon, 2 8 review by the Court is confined to the legality of the decision. The Court cannot reopen the examination of the proposed aid in the light of material not put forward at the stage of the procedure which led to the contested decision. (b) Substance

79. The applicant maintains that the Com- mission failed adequately to ascertain whe- ther there were other financing possibilities for Jadekost, which it had not ruled out (ii) Existence of other sureties during the administrative procedure.

83. The applicant maintains that the Com- mission, when determining the amount of aid, failed to take into account the exis- 80. As can be seen from the case-file, the tence of significant sureties in favour of Commission took all the steps provided for Jadekost's creditor banks. 30 under Article 93(2) in order to marshall the information necessary to assess the security at issue, accorded by the Land in order to guarantee the bank loan obtained by Jade- kost. 84. I am not convinced by this argument. As the Commission has pointed out, it is clear from the documents submitted by the

81. The applicant first raised the issue as to 30 — In particular — in section III, paragraph 6, fourth sen- tence of its Decision, the Commission states that 'Since the Commission's failure actively to ascer- only very limited securities were available in the start-up tain whether there were other financing phase, Jadekost took steps to obtain a security from the Land for the operating loans granted to it by its bank, the possibilities in its application to the Court Bayerische Hypotheken- und Wechselbank AG.'

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31 — As the Commission also notes, the applicant stated, in its letter of 19 July 1994 (annex B2 to the Commission's 88. On this point I think it suffices to point defence), that 'to guarantee operational funding the banks required an 80% security to De provided by the Land of out, in agreement with the Commission, Lower Saxony for a credit of DEM 35 000 000.' that the granting of a security resulted in a 32 — The Commission submitted this letter as annex B 9 to its defence. reduction of the company's costs, and that 33 — According to section 1.3 of the aforementioned General that finding by the Commission is not Directives on Securities, referred to by the Commission in manifestly wrong. That is because, without point 46 of its defence, an application for a security requires the approval of the Budget Committee of the (Lower Saxony) Landtag if there is any departure from the the loan for which the security was pro- Guidelines. vided, the recipient company would not

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34 — The point was repeated at the hearing, in reliance on the relevant Commission Notice (Commission Notice on the de minnus rule for State aid (96/C 68/06) OJ 1996 C 68, 35 — Case C-301/87 France v Commission (cited in footnote 3), p. 9), that, where significant sureties exist, the aid cannot paragraph 39. be equal to 100% of the amount for which the aid was 36 — Capital contributions, loans at reduced rates of interest granted. and reductions in social security charges.

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37 — The Commission Notice (96/C 68/06), relied upon by the applicant, takes merely the form of guidelines whose 93. In the Commission's view, the appli- essential characteristic consists in clarifying the Commis- sion's policy in different sectors (in regard to the meaning cant's information shows that Jadekost of guidelines, particularly under French law, see Prokopios could only have made a negligible profit. Pavlopoulos, 'La directive en droit administratif', Paris LGDJ, 1978 (in the 'Bibliothèque de Droit Public' series, volume 128, XX, 268 pages), passim, Jean Boulouis, 'Sur une catégorie nouvelle d'actes juridiques: les "directives" in "Recueil d'Études en hommage à Charles Eisenmann", Paris, Cujas publishers, 1977, p. 191; and Pierre Delvolé, "La notion de directive" in AJDA 1974, p. 459)'. Further- more, I am of the opinion that one cannot infer from the Notice that the Commission's findings and assessment are manifestly wrong inasmuch as the risk to the guarantor was, as I have already pointed out, considered to be very high due to the financial situation of Jadekost. I would point out that, according to the Notice in question, 94. In my opinion, the Commission's the cash grant equivalent for loan guarantees in a given assessment corresponds to that in the year can he either (1) calculated in the same way, as the cash grant equivalent of a soft loan, once the premiums business report of C & L Deutsche Revi- paid have been deducted, the interest subsidy representing the difference between the reference interest rate and the sion, which concluded that, in the light of rate obtained owing to the State guarantee, or (2) taken to the reduction in its financial capacity, the be the difference between (a) the outstanding sum guar- anteed, multiplied by the risk factor (the probability of very unpredictable development of the default) and (b) any premium paid, i.e. (guaranteed sum x Nordfrost group and market developments, risk) — premium. In the present case, the security granted corresponded to the risk for the security was very high. That 80% of the DEM 35 000 000 loan accorded to Jadekost. was confirmed by the fact that on After deduction of application and surety fees, the net subsidy equivalent corresponds to 98.7% of 31 March 1995 insolvency proceedings DEM 25 600 000, which was the amount of the security. were opened against Jadekost. Further- If one applies the net subsidy equivalent of 98.7%, one obtains the sum of DEM 25 267 200 to which the more, the information contained in the securities correspond. Of that amount, DEM 10 688 025 (equivalent to 42.3%) represented fish products. business report of C & L Deutsche Revi-

97. From the above it follows, in my opinion, that there has been no error, and (vi) Overall assessment certainly no material error, on the part of the Commission in regard to establishing the facts because it failed to carry out an overall assessment of the investment plan to be put into effect by Jadekost, but rather focused its analysis solely on the part of the 95. The applicant contends that there was a plan relating to Jadekost's liquidity require- connection between the additional liquidity ments, in view of which the aid was requirements of Jadekost and the global granted. investment plan. As a result, the security given by the Land could be used to finance remaining investments so that Jadekost's own funds could be employed to cover its liquidity requirements. The applicant points out that it was purely for reasons of simplification that it decided to use it as (2) Findings of fact relating to the Guide- Operating aid'; it does not claim that the lines security was granted as an investment credit rather than an operating credit. The applicant argues that the decisive factor in an overall assessment is, however, the fact 98. The second part of the applicant's that the total amount of the aid granted to second plea concerns the findings of fact Jadekost does not exceed the ceiling in regard to the Guidelines for the fisheries approved for carrying out the aid project. 38 — The Commission submits a letter dated 22 July 1994 addressed to it (anties B2 to its defence). 3 9 — I n that application, submitted as annex B19 to the Commission's defence, the proposed use of the loan is described as 'Betriebsmittelkredit fur das Umlaufvermö- gen·. 40 — Reproduced verbatim in section III, paragraph 6, m fine, of the contested decision. 41 — That decision has been submitted as annex B2 to the 96. The Commission points out that, until Commission's defence. The Commission contends that this can also be inferred from the decision of 2 May 1994 to 13 April 1995, the applicant had itself approve the security.

sector. In particular, the applicant contends 100. By the third part of the second plea, that the Commission did not take account the applicant contends that the Commis- of the fact that the security in question was sion's findings relating either to the fact granted on condition that Jadekost com- that the aid distorted competition or that plied with the financing plan drawn up by its grant meant that Jadekost's costs were Jadekost on 23 March 1994, as up-dated reduced, are inadequate. on 18 October 1994, which provided for use of the funds; compliance with the plan was to be monitored by the Land of Lower Saxony. That plan corresponds to that presented in the findings of the business reports for the years 1994 and 1995. Furthermore the applicant states that the contested decision contains no findings in regard to the quantities produced or in 101. In regard to the definition of the regard to the units or factors of production. market, the applicant contends that mere reference to the market in 'deep-frozen fish products' and 'fish fingers, fish fillets and "gourmet" fish fillets' does not constitute an adequate finding of the facts. Further- more, the Commission failed to make findings as to the European market, in 99. Nevertheless, as the Commission has particular with respect to the production pointed out, the financing plan was taken figures for deep-frozen fish products in into consideration by the contested deci- other Member States. It cites statistics on sion. 42 Furthermore, the contested decision such figures which clearly indicate that the contained an alternative application of the production of such products by Jadekost criteria set out under point 1.3 of the represents only a small share of overall Guidelines, so that the Commission was production in the common market. under no obligation to examine whether the security was in any way linked to quantities produced and so forth. Conse- quently, the applicant's contention that in this case there is no finding of fact by the Commission relating to the application of the Guidelines is unfounded. 102. As the Commission nevertheless points out, the contested decision contains an express reference to the fact that there is competition on the market for deep-frozen fish products as well as on that for fish fingers, fish fillets and 'gourmet' fish fillets. The Commission further submits that there (3) Findings of fact concerning distortion of is clearly competition in Germany and in competition the Community, as stated in the contested decision (section I, paragraph 1). That can also be inferred from the correspondence 42 — Sections III, paragraph 8, and IV, paragraph 9, of the contested decision. with the national authorities produced by

43 — I would point out that the Court stated in Case 32/82 Intermills v Commission (1984] ECR 3809, paragraph 32: '... the granting of aid ... cannot he regarded as being automatically contrary to the provisions of the Treaty. Thus, irrespective of the form in which aid is granted... it is the Commission's task to examine whether it is contrary to Article 92(1) and. if so, to assess whether there is any 105. Before examining the applicant's sub- possibility of its being exempt under Article 92(3), giving the grounds on which its decision is based accordingly.' missions, I would like briefly to deal with 44 — Sec Christian Gavalda and Gilbert Farléani, Droit des the definition of distortion of competition affaires de l'Union Européenne, Paris, Litec, 2nd edition, 988, p 394 ff., paragraph 737. within the meaning of Article 92( 1 ) of the 45 — See Bellamy and Child, Common Market Law of Compe- Treaty. tition, 4th edition, 1993, p. 911, No 18-004.

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111. As I explained in Joined Cases C-329/93, C-62/95 and C-63/95 Germany and Others v Commission, 51 that case-law confirms the idea expressed by Advocate General Capotorti in his Opinion in Philip Morris Holland. 52 There the Advocate General expressed the view (point 4) that 'the distortion of competition should be a 109. In another judgment concerning aid consistent and necessary consequence of granted by the French Republic, the Court the benefit given to certain undertakings or held that 'the proposed aid would enable the production of certain goods by means the undertaking benefiting from it to reduce of the State aid. That construction is their investment costs, thereby strengthen- confirmed by logical rules of the economy. ing their position as against that of other undertakings competing with them in the Community'. 48 That condition can also be 49 — Thus, according to Case 102/87 France v Commission [1988] ECR 4067, paragraph 19, aid to an undertaking may be such as to affect trade between the Member States and distort competition where that undertaking competes with products coming from other Member States, even if it does not itself export its products. Such a situation may 46 — Case 173/73 Italy v Commission [1974] ECR 709; and exist even if there is no overcapacity in the sector at issue. Case 730/79 Philip Morris Holland v Commission [1980] 50 — Case C-142/87 Belgium v Commission [1990] ECR 1-959, ECR 2671. paragraph 35. 47— Paragraph 11 of Case 730/79 Philip Morris Holland v 51 — Point 49 of my Opinion in those cases, in which judgment Commission (cited in footnote 46). was delivered on 24 October 1996 [1996] ECR I-5151. 48 — Case 259/85 France v Commission, cited in footnote 13, 52 — Cited in footnote 46. paragraph 24.

112. On the question whether trade between Member States has been affected, the Court has ruled that, when State financial aid strengthens the position of an undertaking compared with other undertakings competing in intra-Commu- nity trade, the latter must be regarded as affected by that aid. 53 The Court upheld that case-law in Case 142/87 Belgium v Commission, stating that 'the relatively small amount of aid or the relatively small 114. From the above-cited judgments it size of the undertaking which receives it follows that, once an undertaking in receipt does not as such exclude the possibility that of aid operates in a market in which i n t r a - C o m m u n i t y trade might be producers from different Member States affected'.54 are actually in competition with one another, the Commission can reasonably conclude that the requirement of an adverse effect on trade between Member States is satisfied. According to the Court, a situa- tion of that kind can arise even when there is no overcapacity in the sector concerned. It follows that it is only in respect of products in which there is no cross-frontier trade on account of very high transport 113. That case-law was further developed costs or other particular circumstances that by the Court in Case C-303/88 Italy v it is still possible to conceive of aid which Commission,55 in which it ruled that 'aid does not satisfy the requirement of an effect may be such as to affect trade between the on trade. 56

53 — Paragraph 11 of Case 730/79 Philip Minns Holland, cited in footnote 46. 56 — See also point 19 of the Opinion of Advocate General Van Gerven delivered on 1 October 1990 in Case C-303/88 54 — Paragraph 43 of the judgment, cited above in footnote 3. Italy v Commission, in which judgment was delivered on 55 —Judgment cited above in footnote 3 (paragraph 27). 2 March 1991 (cited above in footnote 3).

116. In particular, the applicant puts for- ward a series of arguments: (a) the Com- mission may lay down in a binding and 118. The Court has already examined, in general manner the elements constituting Case C-311/94 IJssel-Vliet, 57the question an infringement of Article 92(1) of the of the value of rules formulated by the Treaty on the basis of the Guidelines Commission in guidelines — those of (section IV, paragraphs 3, 4 and 11, of the 1988 in the fisheries sector. 58 That case contested decision); (b) the contested deci- concerned the rejection by the Netherlands sion expressly and specifically states that Minister for Economic Affairs of an appli- the incompatibility with point 1.3 of the cation made by IJssel-Vliet Combinatie BV Guidelines renders examination of the for a subsidy for the construction of a other conditions specified in Article 92(1) fishing vessel. of the Treaty unnecessary (section IV, paragraph 11, of the contested decision); (c) the Commission exceeded its powers in 57 —Case C-311/94 IJssel-Vliet Combinatie v Minister van specifying in an abstract and binding man- Economische Zaken [1996] ECR I-5023, paragraphs 36 to 44, see also points 34 to 52 of the Opinion of Advocate ner how the elements contained in Arti- General Lenz. cle 92(1) of the Treaty are to be inter- 58 — These are the Guidelines for the examination of State aids in the fisheries sector (88/C 313/09) (OJ 1988 C 313, preted; and (d) the Guidelines can be of p. 21).

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120. The Court further pointed out in agreed to, were binding on the Commission IJssel-Vliet (paragraph 38), that 'the Guide- and the Member States. lines, which are not the first to have been applicable in the sector under considera- tion, are an updating of previous guidelines and thus fall within the framework of regular, periodic review of the fisheries sector'. It then went on to state (paragraph 122. In IJssel-Vliet the Court stated further 39) that although the Commission retained (paragraph 43) that 'the Commission control, that review was carried out in approved the amendments to the national cooperation with the Member States.

. . When it did so, the Netherlands Govern- 59 — See also Case C-135/9.1 Spain v Commission, paragraph ment was applying the national aid scheme, which must 24. In the IJssel-Vliet judgment the Court stated (para- therefore be deemed to have been covered by that graph 37) that: '[t]he Guidelines are based on Article 93(1) confirmation.' of the Treaty and are thus one element of that obligation of regular, periodic cooperation from which neither the 63 — Furthermore, in Case C-313/90 CIRFS and Others v Commission nor a Member State can release itself. They Commission [1993] LCR I-I 125, paragraph 35, the Court also — at least as regards relations between the Commis- recognised as binding a 'discipline' which was of the same sion and the Netherlands — conform strictly to the spirit legal nature as the Guidelines and whose rules had been of regular, periodic cooperation envisaged by the said approved by the Member States. The said 'discipline' Treaty article between the Commission and the Member constituted rules for the Member States in regard to States.' granting aid in a certain sector (the synthetic fibre industry), winch the Commission had presented in a 60 — In the case of the Netherlands Government, by letters of Notice on its policy in this area and which the Member 30 March and 6 May 1988. States had agreed to; see also paragraph 42 of the 61 — By letter of 30 November 1988. judgment m IJssel-Vliet, cited in footnote 58.

127. The Commission maintains that it is clear from the contested decision that the facts were examined in order to ascertain 124. As a result of the above it follows, in whether the elements contained in Arti- my opinion, that the Guidelines are binding cle 92(1) of the Treaty were present, and on the Commission and on the applicant. that all the undisputed findings concerning Thus the German public authorities are the legal characterisation of the aid, even required to apply them when deciding on during the administrative procedure, refer- applications from an undertaking for aid, red to that article.

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132. First, the applicant considers that it paid a risk-based premium which offset the aid-like character of the security and which the Commission failed to either assess or (2) Legal characterisation of the facts put a value on. It then went on to reiterate that the Commission had failed to take into consideration, in assessing the amount of aid, the existence of substantial sureties guaranteeing the loan and whose value should have been assessed as at the time 130. In the second part of its third plea in they were established rather than when the law, the applicant submits that, although loan was called in, which resulted in their the security granted by the Land of Lower being undervalued. That is because the Saxony has elements of aid within the existence of sureties reduces the risk to meaning of Article 92(1), the contested decision is nonetheless wrong. The appli- cant splits this part of the plea into two 64 — The applicant disagrees with the Commission's view that limbs and contends that the contested Jadekost could not have ohtained any loan without the security. It considers that the Commission pursued two decision is wrong as regards the way the separate approaches in a manner which was confused (lacking in clarity) and contradictory. First, the Commis- amount of aid was determined and as sion evaluates the undertaking's price advantage and then regards the assessment of whether compe- it determines whether and to what extent the undertaking could have obtained alternative financing with its existing tition was distorted. sureties.

66 — Case T-459/93 [1995] ECR II-1675. 67 — The applicant further maintains that: (c) the Commission's argument that the security resulted in a 100% reduction in 134. In the second limb of the second part production costs is incorrect; (d) the Commission wrongly of its third plea in law, the applicant considered that the granting of the security by the Land of Lower Saxony distorted competition in so far as Jadekost was able to sell its products at prices that were artificially lower than the usual market prices. With its small roduction quantities, Jadekosťs entry onto the market 65 — The applicant draws a distinction between the question of principle, that is to say whether the existence of sureties is Ead not had any effect on the constant downward trend in prices for deep-frozen fish products which had begun long of relevance for determining the amount of aid on the one before. Moreover, because Jadekost's production represent hand and, on the other, the question of the value of the a minimal share of the European market, no distortion of existing sureties in the present case. That is because competition could have been perceptible. Germany's share ultimately, the advantage obtained by the debtor whereon of overall production in the Member States is, according to security is given is less than that obtained by the the applicant, less than 24% and Jadekost has only a 1.5% beneficiary of a subsidy. share of the European market.

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138. In addition, the case-law gives a broad interpretation to the notion of distortion of 141. To begin with, according to the judg- competition. Competition is distorted ment in Siemens v Commission, 72 operat- where a State measure artificially brings ing aid consists of 'a typical general oper- about a change in certain factors of an ating cost that a company must bear in its

68 — Those matters are regulated bv Council Regulation lEEO 70 — Case 173/7.3 //,;/)• v Commission and Case 730/79 Philip N o 3759/92 of 17 December 1992 on the common Morris v Commission (both cited in footnote 46). organisation of the market m fishery and aquaculture 71 — Section IV', paragraphs 11 and 13, of the contested decision products (OJ 1992 L 388, p. 1). m the English text; section IV, paragraphs 12, 13 and 14, 69 — Tlie Commission submits that that can also he inferred of the contested decision in the German text, which is the from the fact that the contested decision mentions only authentic version. information that was provided by a number of competitors 72 — Case C-278/95 P Siemens v Commission 119971 and associations in Member States. ECRI-2J07, paragraph 18.

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144. It follows from the above judgments of the Court and the text of the Guidelines, which, as I have pointed out, are binding 143. The Guidelines define operating aid upon the Commission and the Member (in section 1.3, fourth paragraph, third States, that operating aid, by its very nature, distorts competition, subject to Article 92(2) of the Treaty, as stated in 73 — The Court of Justice therefore upheld the Court of First footnote 2 to point 1.3 of the Guidelines. Instance's reasoning on this point; it had ruled in Pursuant to Article 92(2) of the Treaty, 'the paragraph 77 of its judgment in Case T-459/93 Siemens v Commission [1995] ECR II-1675, that the purpose of following shall be compatible with the both the aid towards the advertising campaigns and the common market: (a) aid having a social market surveys and the aid for the purchase of equipment to be leased 'was the marketing of Siemens' products'. It character, granted to individual consumers, then went on to state: 'Since marketing is a normal, everyday commercial activity, those aids constitute oper- provided that such aid is granted without ating aids which, first, do not promote the "development" discrimination related to the origin of the of any economic sector and, second, provide the applicant with artificial financial support such as to distort competi- tion in the long term and to affect trade to an extent products concerned; (b) aid to make good contrary to the common interest'. the damage caused by natural disasters or 74 — See also Case C-86/89 Italy v Commission [1990] ECR exceptional occurrences; (c) aid granted to I-3891, paragraph 18, and Case C-301/87 Boussac, cited in footnote 3, paragraph 49. the economy of certain areas of the Federal 75 — In the Boussac judgment, cited in footnote 3 (paragraph Republic of Germany affected by the 54), the Court accepted that the financial assistance given by the French Government to Boussac was designed to division of Germany'.76 prolong artificially the activity of the undertaking despite the fact that it was in a state of insolvency and that it could not be expected that the undertaking would be in a position to survive on its own in the immediate future. Nor had the measures in question been intended to modernise 76 — The provision furthermore provides that such aid is the undertaking in order to restore the competitiveness compatible with the common market in so far as it is enjoyed years previously. For those reasons the Court came required in order to compensate for the economic dis- to the conclusion (paragraph 57) that the aid in question advantages caused by that division. Following the reuni- could not qualify under the exemptions set out in fication of the two Germanys, that latter provision is of Article 92(3) of the Treaty. only historical significance.

148. However, apart from how the Mem- ber State or the Commission characterise the aid granted, the existence of a pre- 146. In particular, the last sentence of sumption does not mean that there is no point 1.3 of the Guidelines provides that need to examine, on a case-by-case basis, the Commission will examine such aid, that whether an aid has been granted and is to say operational aid, on a case-by-case whether particular aid is indeed operating basis, but only 'where ... [it is] directly aid, that is to say, whether the Commission linked to a restructuring plan considered to has wrongly characterised the facts in law. be compatible with the common market'. If aid has been correctly characterised as As Advocate General Jacobs pointed out in operating aid, then the presumption comes his Opinion in Case C-301/87 (Boussac), 77 into play, that is to say, the aid in question accepting the definition put forward by the is incompatible with the common market Commission, the concept of restructuring because it is capable of distorting competi- can be understood to mean the fundamen- tion, in view of the manner in which it was tal reorganisation of an undertaking with a granted and its consequences for the mar- view to maintaining or restoring its com- ket and intra-Community trade. petitiveness and involving fundamental changes to the labour force, the means and the process of production, production capacity and other aspects of the under- taking's activities. 149. In the light of the above considera- tions, it can be concluded that the aid granted by the applicant to Jadekost by way of a security for a bank loan consti- tutes operating aid, since it was aimed at freeing the undertaking from costs that it would have to bear in the course of its 147. The existence of a presumption is of normal activities. 78Furthermore, it was importance for apportioning the burden of not provided that the grant of the aid proof. The result is that the Commission

153. In particular, in the area of State aid, according to settled case-law, the statement of reasons may not merely restate the conditions set out in Article 92(1) and the (i) Case-law of the Court Commission is therefore required to go into

79 — See, for instance Case C-353/92 Greece v Council [1994] ECR I-3411, paragraph 19; Joined Cases C-63/90 and C-67/90 Portugal and Spain v Council [1992] ECR I-5073, paragraph 16; and Case C-466/93 Atlanta Fruchtbandels- gesellschaft and Others v Bundesamt für Ernährung und 151. I would first point out that, pursuant Forstwirtschaft [1995] ECR I-3799, paragraph 16. to Article 190 of the Treaty, the legal acts 80 —Joined Cases 296/82 and 318/82 Netherlands and Leeu- warder Papierwarenfabriek v Commission [1985] ECR of Community institutions must state the 809, paragraph 19.

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154. Consequently the conclusion that may takings, trade flows between Member be drawn from the above analysis is that States in the products concerned and the undertaking's exports. 84 81 — T h e case-law cited in the examination of submissions concerning distortion of competition and the effect on Community trade, leads to the conclusion that aid must be presumed to be capable of distorting competition and to affect intra-Commumry trade (in this context see Jacques Biancarelli, Le contrôle de la Cour de Justice des Com- munautés en matière d'aides publiques, L'actualité juridi- que — Droit administratif, 1993 (p. 412 to 436) p. 412 particularly p. 422, and Claude Blumann, 'Régime des aides d'État: jurisprudence récente de la Cour de Justice' 1989 to 1992, Revue du Marché Commun et de l'Union Européens No. 361, 1992 (p. 721 to 739), p. 721, 726.

competition'. In its judgment in Leeuwarder Papierwar- context of the Article 93(2) procedure, or cnfabnek, cited in footnote 80, the Court annulled a Commission Decision which contained no statement of whether a brief statement of reasons with- reasons with regard to its assessment that the aid at issue out details is sufficient. affected trade between Member States and distorted or threatened to distort competition by favouring certain undertakings or products. As the Court observed 'The preamble recalls the concern expressed by the Govern- ments of two Member States and by two trade associations in the relevant industry with regard to the distortion or competition resulting from the measure taken by the

decision. In this case it has failed to do so since the contested decision does not contain the slightest informa- mission 85 provides arguments for resolving tion concerning the situation of the relevant market, the place of Leeuwarder (the recipient of aid) in that market, the pattern of trade between Member States in the products in question or the undertaking's exports' (para- 83 — Joined Cases 62/87 and 72/87 Exécutif Régional Wallon graph 24 of the judgment i n Leeuwarder Papierwarenfab- and Glaverbel v Commission [1988] ECR 1573, paragraph

82 — See Joined Cases 296/82 and 318/82 Leeuwarder Papier- 84 — See Joined Cases C-329/93, C-62/95 and C-63/95 Ger- warenfabriek, cited in footnote 80, paragraph 19 ff., and many and Others v Commission, cited in footnote 5 1 , Germany and Others v Commission, cited in footnote 5 1 , paragraph 53. paragraph 52. 85 — Joined Cases C-356/90 and C-180/91 [1993] ECR I-2323.

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(ii) Examination of the applicant's argu- 86 — Commission Decision 90/627/EEC of 4 July 1990 on loans ments granted by the Belgian authorities to two shipowners for the purchase of a 34 000 m 3LPG ship and two refrigerator ships (OJ 1990 L 338, p. 21) and Commission Decision 91/375/EEC of 13 March 1991 concerning credits granted by the Belgian authorities to various shipowners for the building ornine vessels (OJ 1991 L 203, p. 105). 158. The applicant maintains that both the 87 — Council Directive 87/167/EEC of 26 January 1987 on aid to shipbuilding (OJ 1987 L 69, p. 55). addressee of a decision and its competitors 88 — The Court first stated (paragraph 30): 'the Council, in have a legitimate interest in a detailed accordance with the rationale of Article 92(3), first noted that aid to shipbuilding was incompatible with the statement of reasons in order to be able to common market and then took into account a series of understand and verify the Commission's economic and social requirements which caused it to make use of its power under the Treaty to consider such aid decision. It therefore follows that neither nevertheless compatible with the common market, provi- ded that it complied with the criteria for derogation the addressee's participation in the proce- contained in the Directive (87/167)'. dure leading to the adoption of this deci- 89 — The Court also explained, in paragraph 31, that that ceiling constituted what the Council regarded as the sion, nor the possibility for the Member balance between the conflicting requirements of respect State who was a party to the procedure to for the rules of the common market and the maintenance of a sufficient level of activity in European shipyards and present its observations, nor the fact that also the survival of an efficient and competitive European shipbuilding industry. the Member State had participated in the

consultations that took place prior to the market. That is very important as regards issuing of the Guidelines in the fisheries the extent of the Commission's obligation sector, nor the reference to 'undisputed to state reasons because it can confine itself facts' justify a statement of reasons which is to a succinct statement of reasons without restricted to the bare minimum. Further- harming the contested Decision. more the applicant considers that the contested decision should be annulled on the ground of a defective statement of reasons, because it confines itself to for- mulating presumptions and suppositions instead of establishing the facts which constitute fulfilment of the conditions con- tained in Article 92(1) of the Treaty.90

Nor does it missing. I also consider that a detailed contain any contradiction which would presentation of that information which, as justify its annulment. stated above, is covered by the presumption in question, was not necessary, not because the applicant participated in the procedure which led to the adoption of the contested decision,91 but rather because, in applica- 160. I have come to this conclusion after tion of the presumption, the aid granted, examining, on the one hand, the Guidelines being operating aid, is, by its very nature, and, on the other, the pleas concerning incompatible with the common market. distortion of competition and the effect on intra-Community trade.

Sec also obtaining alternative financing despite the fact the Com- Joined Cases C-329/93, C-62/95 and C-63/95 Germany mission had acknowledged the possibility of a risk- ami Others v Commission, cited above in footnote 51, adjusted premium. paragraph 31.

163. Consequently, in view also of the presumption laid down that operating aid is incompatible with the common market, I consider that the Commission was not in D —· Fourth plea in law: Misapplication of breach of its obligations under Article 190 Article 92(3) (c) of the Treaty of the Treaty and that its statement of reasons is sufficient. I would repeat, how- ever, that the possibility of a summary statement of reasons concerns only those 166. In its fourth and last plea in law, the facts that are covered by the presumption, applicant maintains that, even if the condi- that is to say, distortion of competition and tions set out in Article 92(1) of the Treaty effect on intra-Community trade, and does were fulfilled, the Commission should have not concern other issues, such as the considered the contested aid to be compa- existence of aid and particularly the exis- tible with the common market pursuant to tence of operating aid, in respect of which Article 92(3)(c) of the Treaty. The state- the Commission is required to give a ment of reasons on that point does not meet comprehensive and sufficient statement of the requirements laid down in Article 190 reasons for its decision. of the Treaty that it be both comprehensive and sufficient.

164. It follows that, in cases of operating aid, the Commission can confine itself to providing a summary statement of reasons, 167. The applicant divides this plea in law without entering into detail, for a decision into two parts. It first claims that the Commission failed to recognise the impor- tance of the Guidelines in the fisheries 92 — I would point out that the absence of information on those sector in exercising its powers of assess- points led the Court, in Joined Cases C-329/93, C-62/95 ment. Correct application would have led and C-63/95 Germany and Others v Commission (cited above in footnote 51) to conclude that the Commission's statement of reasons in that case was insufficient (para- to a different result. Secondly it claims that graphs 53 and 54). the Commission incorrectly concluded that

169. It can be seen from section V of the contested decision that the Commission 171. Even if Jadekost operated in an area examined, in a proper manner, whether in which aid to facilitate development the contested aid could be allowed on the could be obtained, the second sentence of basis of Article 92(3)(c). Since the Com- point 1.6 of the Guidelines provides that mission enjoys a wide discretion, the the components of regional aid schemes assessment which it made is not, in my relating to the fisheries sector will be examined on the basis of the Guidelines. In other words, the Guidelines contain the 93 — In support of its submissions, the applicant states as follows: (a) Jadekost carried on its business in an area that principles of coordination which the Com- could have benefited from aid to facilitate development as mission will apply to regional aid schemes it is an area with a low per capita income and high unemployment; (b) in the light of the applicant's view in in force or to be established in the regions respect of an overall approach to/assessment of the aid granted, the conditions for facilitating the development of of the Community. That means that the certain economic areas as set out in Article 92(3)(c) of the Commission's discretion is exercised in Treaty were satisfied in the case of Jadekost. The security was intended to provide financing for a new undertaking, accordance with the principles which it rather than to maintain a company that had been in operation for a long time; (c) the granting of the security in laid down itself, in cooperation with the favour of Jadekost did not adversely affect trading Member States, in the Guidelines. The conditions to an extent contrary to the common interest. 94 — Cited above in footnote 46. See also paragraph 49 of Case applicant's arguments to the contrary must C-301/87 Boussac, cited above in footnote 3. therefore be rejected as unfounded.

175. I consider that it is more likely that the conditions set out in point 1.3, as follows from the objective of that text, 98 173. Since what is involved is operating need only be fulfilled alternatively. Apart aid, I would point out that such aid cannot from the fact that other language ver- in any circumstances, according to the sions 99 require only that the conditions settled case-law of the Court, 95 be consid- laid down be fulfilled alternatively, that ered compatible with the common market conclusion follows from a teleological pursuant to Article 92(3)(c), inasmuch as, by its very nature, it threatens adversely to affect trading conditions to a degree con- 97 — The 1994 German text contains the abbreviation 'bzw.', trary to the common interest. In addition, i.e. 'beziehungsweise' which corresponds to the disjunctive

The Court has already had occasion to address the issue of linguistic divergence in the rendering of conditions or the phrasing of legislation of the Community institutions. In Case 29/69 Stauder v City of Ulm [1969] ECR 419, for instance, it 174. The applicant further claims that, stated; 'When a single decision is addressed to all the Member States the necessity for uniform application and although the Commission referred to the accordingly for the uniform interpretation makes it impossible to consider one version of the text in isolation 1992 Guidelines, it nevertheless applied but requires that it be interpreted on the basis of both the those of 1994, 96 as is apparent from the real intention of its author and the aim he seeks to achieve, in light in particular of the versions in all four languages' text of the contested decision. It submits (paragraph 3). See Case 19/67 Bestuur der Sociale Verze- keringsbank v van der Vecht [1967] ECR 345.

Such an sion and Case C-301/87 Boussac. approach would be incompatible with the requirement for the uniform application of Community law'. 96 — OJ 1994 C 368, p. 12.

interpretation of the contested provision. sidered compatible with the common mar- Otherwise it would be very rare for all the ket. Those criteria are set out in point 2.3 alternative conditions provided for to be of the Guidelines, concerning aid to pro- fulfilled and the result would be that only cessing and marketing in the fisheries in a few instances could it be considered sector. that such aid was incompatible with the common market because it distorted (or threatened to distort) competition. That would jeopardise the attainment of the objectives of the common fisheries policy 178. In particular, as can be seen from the and, more generally, the proper functioning documents before the Court, the aid of the common market and maintenance of granted to Jadekost was not aid to invest- the system of free and undistorted compe- ment (point 2.3.3 of the Guidelines) or aid tition in the fisheries sector. relating to product quality (point 2.3.4 of the Guidelines). Although a financing plan existed in order to demonstrate that the loan for which the security was granted was to be used for the operation of the 176. In view of the above, I am of the undertaking, that cannot be regarded as an opinion that, despite the fact that the undertaking on the part of the recipient to contested decision referred to the text use the aid, within the meaning of (point 1.3) of the 1994 Guidelines rather point 1.3, in conjunction with point 2.3, than, as should have been the case, the of the Guidelines. That is because, as I have 1992 version, nevertheless this does not already pointed out, the loan for which the entail the nullity of the decision because the security was granted was used to cover content of both versions is essentially the general operating costs which Jadekost had same. to bear in the course of its normal activities. Consequently the Commission's finding that the contested aid was not compatible with the common market is not manifestly wrong. 177. The last point which I would like to stress is the fact that the granting of a security, in other words, the granting of aid to Jadekost, was not accompanied by any specific obligations as to its use, in accor- 179. As a consequence, I would propose dance with the criteria on the basis of that the fourth plea in law be rejected in its which different categories of aid are con- entirety.

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