C-197/99

IV — The contested judgment I - 8469

V — The appeal I- 8472

A — Pleas relating to the SNCI loans and the Belfin loans I - 8473

1. First plea: infringement of the obligation to state reasons I- 8473

(a) The appellant's arguments I - 8473

(b) Assessment I - 8474

B — Pleas relating specifically to the SNCI loans I - 8482

1. First plea: infringement of the principle of legal certainty I - 8483

(a) The appellant's arguments I - 8483

(b) Assessment I - 8483

2. Second plea: infringement of the obligation to state reasons I - 8488

1 — Original language: French.

1. In 1996 the Belgian authorities adopted 2. Several actions for annulment were a series of financial measures to assist the brought against that decision before the steel undertaking Forges de Clabecq SA Court of First Instance of the European (hereinafter 'Forges de C l a b e c q ' ) . By Communities. 3The Kingdom of Belgium is decision of 18 December 1996, 2the Com- mission declared that the measures at issue constituted State aid incompatible with the common market and ordered the repay- 3 — A total of four actions were brought before the Court. T h e first was brought by the Fédération générale des travailleurs ment of the aid unlawfully paid. de Belgique, Centrale professionnelle des métallurgistes d u Brabant (CMB), and by the Syndicat des employés tech- niciens et cadres du Brabant-wallon (SETCA). It w a s removed from the register by Order of the President of the Court of First Instance in Case T-2/97 CMB and SETCA v Commission (1997), not published in the European Court Repons, after the applicants discontinued the proceedings. The second action, brought by two union officials from Forges de Clabecq, was declared inadmissible (Case T-4/97 D'Orazio and Hublau v Commission [1997] ECR II-1505). The third action was brought by the Walloon Region before the Court of Justice which declared that it had n o jurisdiction and referred the matter to the Court of First Instance (Order of 21 March 1997 in Case C-95/97 Région wallonne v Commission [1997] ECR I-1787). By order of 29 September 1997, the Court of First Instance subsequently declared the action inadmissible (Case T-70/97 Région wallonne v Commission [1997] ECR II-1513). Finally, the fourth action was brought by Forges de Clabecq, supported by the Kingdom of Belgium, the Walloon Region and the Société wallonne pour la sidérurgie SA (SWS). It "was dismissed by the judgment of the Court of First Instance 2 — Decision 97/271/ECSC, ECSC steel — Forges de Clabecq which is the subject of this appeal. (OJ 1997 L 106, p. 30, hereinafter 'the contested decision').

6. Under Article 1(1) of the Code, 'aid to the steel industry... financed by Member States, or their regional or local authorities or through State resources..., may be deemed Community aid and therefore 'In all cases not provided for in this Treaty compatible with the orderly functioning of where it becomes apparent that a decision the common market only if it satisfies the or recommendation of the Commission is provisions of Articles 2 to 5.' 6 necessary to attain, within the common market in coal and steel and in accordance with Article 5, one of the objectives of the J — OJ 1991 L 362, p. 57 (hereinafter 'the Code' or 'the Aid Code'). 6 — Articles 2 to 5 of the Code provide that aid for research and development, aid to protect the environment, aid granted 4 — Case T-37/97 Forges de Clabecq v Commission [1999] ECR for closure and certain regional aid may be deemed II-859 (hereinafter 'the contested judgment'). compatible with the common market.

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BELGIUM v COMMISSION

7. At procedural level, Article 6(2) of the 10. During the first half of the 1980s SNCI Code provides that the Commission shall granted four loans to Forges de Clabecq. 7 be informed, in sufficient time, of any plans The initial loan was in the amount of BEF for transfers of State resources, by Member 1 500 million and consisted of two success- States, regional or local authorities or other ive instalments: the first instalment of BEF bodies to steel undertakings. Under 820 million and the second of BEF 680 Article 6(4) the Member State concerned million. The second loan was for BEF 850 may put the planned measures into effect million. The third loan was in the amount only with the approval of the Commission. of BEF 1 500 million and the fourth, granted in 1985, was for BEF 650 million.

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13. On 5 July 1996, the Commission wrote Belgium to assist Forges de Clabecq 13 to the Belgian authorities to ask whether constituted State aid incompatible with they had adopted measures other than the common market. those notified. It also observed that the notification contained no information as to the conditions applicable to the reschedul- ing of the debts of Forges de Clabecq.

17. As regards the rescheduling of the undertaking's debts, the Commission found that the SNCI and Belfin loans were covered by a State guarantee. It declared that those guarantees constituted State aid which should have been notified under 14. The Belgian authorities replied to the Article 6(2) of the Code. The Commission Commission by letter dated 23 July 1996, also stated that the extension of the State appending to their letter several documents guarantee for a further three-year period recording an agreement in principle increased the aid element involved in the between SNCI and Belfin to postpone guarantee. It concluded that '[t]he guaran- repayment of the loans by three years. tees in respect of the loans granted by Belfin and SNCI and their extension to the post- poned due dates constitute State aid' and that 'the aid [is] illegal since it was granted without the Commission's prior authori- sation'. 14

15. By a communication under Article 6(4) of the Aid Code, published on 11 October 1996, 12 the Commission put the Belgian Government on notice and requested it, together with any other interested party, to 18. Consequently, the Commission submit its observations. The Kingdom of required the Belgian authorities to abolish Belgium replied to that formal notice by all the financial aid measures and demand letter of 23 October 1996. repayment of the illegal aid already paid.

20. By application lodged at the Court of 23. By its first plea, the Kingdom of First Instance on 25 February 1997, Forges Belgium claimed that the contested decision de Clabecq brought an action for annul- was not sufficiently reasoned in the light of ment of the contested decision. The King- Article 15 of the ECSC Treaty. 17 It dom of Belgium intervened in support of stated 18 that the Commission criticised the forms of order sought by the appli- the 'SNCI and Belfin loans' without stating cant. 15 which precise loans it was referring to. The Belgian Government considered that, in the absence of those precise details, it was impossible to understand the operative part of the contested decision, which states that 21. The Belgian Government developed a 'Belgium is... required to abolish the aid specific line of argument to dispute the measures referred to... and demand that the Commission's assessment that '[t]he [State] illegal aid already paid be reimbursed.' guarantees in respect of the loans granted by Belfin and SNCI and their extension to the postponed due dates constitute... illegal State aid'. 16

24. The Court rejected this first plea on the ground that:

22. The Kingdom of Belgium put forward four pleas supporting the claim for annul- ment, alleging (1) infringement of the obligation to state reasons, (2) infringement '110 ... The Belgian Government cannot of the Commission's decisions of claim that it is unable to ascertain 16 December 1982 and 31 July 1985, (3)

17 — The first paragraph of Article 15 of the ECSC Treaty 15 — Order of the Court of First Instance of 31 October 1997 in provides that '[d]ecisions, recommendations and opinions Case T-37/97 Forges de Clabecq v Commission, not of the Commission shall state the reasons on which they published in the European Court Reports. are based and shall refer to any opinions which are 16 — Point V of the contested decision, entitled 'Rescheduling of required to be obtained'. debts', final paragraph. 18 — Paragraph 104 of the contested judgment.

The Kingdom of Belgium emphasised that the State guarantees criticised by the con- '97 It is settled case-law that the principle tested decision related to the second instal- of legal certainty aims to ensure that ment, in the amount of BEF 680 million, of situations and legal relationships gov- the first SNCI loan, and to the fourth SNCI erned by Community law remain fore- loan, for BEF 650 million. seeable.... To that end, it is essential that the Community institutions observe the principle that they may not alter measures which they have adopted and which affect the legal and factual situation of persons, so that It pointed out that the State guarantee they may amend those acts only in attaching to the first SNCI loan — includ- accordance with the rules on compet- ing the second instalment of BEF 680 ence and procedure.... million — had been expressly authorised by Commission decision of 16 December 1982 (hereinafter 'the 1982 decision'). Similarly, the State guarantee attaching to the fourth SNCI loan of BEF 650 million had been authorised by decision of 31 July 98 However, breach of that principle 1985 (hereinafter 'the 1985 decision'). cannot effectively be pleaded if the person whose legal and substantive position was affected by the decision in question did not observe the con- ditions laid down in it....

The Belgian Government considered that, in those circumstances, the Commission 99 In the present case it is clear that in 19 — Paragraphs 84 to 86 of the contested judgment. 1996 none of the State guarantees of

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BELGIUM v COMMISSION

The Kingdom of Belgium pointed out that, in the contested decision, the Commission had considered that the extension, for a further three-year period, of the State guarantees attaching to the SNCI and 100 These modifications were not notified Belfin loans constituted illegal aid on the to the Commission and cannot be ground that it had been granted without the regarded as compatible with the con- Commission's prior authorisation. It sub- ditions to which the 1982 and 1985 mitted that that assessment was incorrect authorisations were subject. In the since the extension in question had been 1982 decision the Commission had duly notified to the Commission on 25 June stated to the Belgian Government that 1996 and had never been implemented, in authorisation of the measure notified accordance with Article 6(2) and (4) of the was to be the applicant's final chance Code. of seeking solutions for its problems in financial assistance from the State. That condition was clearly disregarded by the modifications subsequently made by the Belgian authorities to the measure authorised. In the 1985 decision the Commission stated that 28. The Court of First Instance did not give the aid authorised was to be put in a ruling on this plea. place by 31 December 1985; that precluded the substantial modifications made subsequently in the applicant's 20 — Statement in intervention (paragraphs 30 to 32).

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OPINION OF MR LÉGER — CASE C-197/99 P

29. By its fourth plea, 21 the Kingdom of loan] to extend its guarantee to cover Belgium claimed that the Commission had that deferral". The fact that State committed a manifest error of assessment guarantees constitute aid may also no by concluding that the Belfin loans were longer effectively be denied.' covered by a State guarantee. It pointed out that only borrowings by Belfin from banks were covered by such a guarantee and not loans by Belfin to undertakings.

22 — Case C-197/99 P Belgium v Commission, not published in 21 — Paragraphs 51 and 52 of the contested judgment. the European Court Reports.

I - 8472

BELGIUM v COMMISSION

A — Pleas relating to the SNCI loans and about. Such identification is however the Belfin loans necessary, since several loans were granted to Forges de Clabecq, as the Court recalled....

1. First plea: infringement of the obligation to state reasons

5 Since the [contested] decision is insuf- ficiently reasoned, the appellant has deduced that the loans concerned are, (a) The appellant's arguments as regards the SNCI loans, the second instalment in the amount of BEF 680 million of the first investment loan of BEF 1 500 million and the last invest- 34. In its first plea for annulment, the ment loan of BEF 650 million. As Kingdom of Belgium criticises paragraphs regards the Belfin loans, the appellant 70 and 110 of the contested judgment. It believes that the reference is to two puts forward the following arguments: 2 3 loans, one for BEF 300 million and the other for BEF 200 million.

36. Firstly, the Belgian Government refers 40. On the other hand, the second plea to the absence or inadequacy of the refers to the substantive legality of the grounds of the contested judgment. It contested judgment. It is based on the claims that 'the contested judgment is existence of an error in law and seeks a vitiated by an absence of grounds' 24 on declaration that the Court of First Instance the ground that 'the Court... did not misinterpreted the scope of the Commis- identify the SNCI and Belfin loans referred sion's obligation to state reasons. 30 In to by the Commission'. 25 those circumstances, the Kingdom of Bel- gium claims that the Court committed an error in law in that it held that the reason- ing of the contested decision in respect of the identification of the SNCI and Belfin 37. Secondly, the Belgium Government loans complied with the requirements of also criticises the Court's finding that the Article 15 of the ECSC Treaty. contested decision is sufficiently reasoned. It states that '[a]dequate grounds are not given in the judgment for the Court's finding that the Commission had identified those loans sufficiently'. 26 41. Since it is impossible to determine precisely the aim of the plea raised by the Kingdom of Belgium, I shall consider in turn the two hypotheses stated below.

38. The Kingdom of Belgium thereby con- fuses two different pleas for annulment. 27 28 — Hereinafter 'the ECSC Statute'. 29 — As regards the obligation to state reasons under Article 33 of the EC Statute of the Court of Justice, see, in particular, the judgment in Case C-153/96 P De Rijk v Commission [19971 ECR I-2901, paragraphs 35 to 38. 24 — Point 6 of the Appeal. 25 — Ibid., point 4. 30 — S e e Case C-166/95 P Commission v Daffix [1997] ECR I-983, paragraphs 27 to 38; Case C-188/9Ć P Commission 26 — Ibid., point 6. v V 11997] ECR I-6561, paragraphs 26 to 30, and Joined 2 7 — See, by analogy, Case C-367/95 P Commission v Sytraval Cases C-76/98 P and C-77/98 P Ajinomoto and Nutras- and Brink's france [1998] ECR I-1719, paragraphs 65 to weet v Council and Commission [2001] ECR I-3223, 72. paragraphs 48 to 5 1 .

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O P I N I O N O F MR LÉGER — CASE C-197/99 P

47. It is evident that the contested judg- could not legitimately consider that the ment does make it possible to identify the contested decision was sufficiently rea- SNCI and Belfin loans covered by the soned as regards the identification of the contested decision. The Court of First SNCI and Belfin loans. Instance held that the Commission had criticised the State guarantees attaching to the four SNCI loans 32 and the guarantees attaching to the two Belfin loans — namely, the loan for BEF 300 million 33 and the loan for BEF 200 million. 34 50. It should be pointed out that the extent of the obligation to state reasons is a question of law reviewable by the Court of Justice on appeal. 35 A plea alleging failure to take account of the scope of that obligation is admissible even if it means 48. In the circumstances, I consider that the that the Court of Justice must of necessity Court of First Instance satisfied its obli- take into consideration the facts on which gation to state reasons under Articles 30 the Court of First Instance relied in reach- and 46 of the ECSC Statute. The first plea, ing its conclusion. 36 inasmuch as it alleges infringement of those provisions, should therefore be rejected.

51. As regards the statement of reasons required by Article 190 of the EC Treaty (now Article 253 EC), the Court of Justice has laid down the following principles. 37 (ii) Second hypothesis: the plea alleges an error in law

concerned to ascertain the reasons for the 55. However, unlike the Belgian Govern- measure and to enable the competent court ment, I do not believe that that circum- to carry out its review. The statement of stance renders the statement of reasons for reasons must be appraised in relation, in the contested decision defective. particular, to the content of the measure and the interest which the addressees or other persons concerned by the measure may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, 56. According to the case-law cited above, since the question whether the statement of the statement of reasons for a measure must reasons meets the requirements of be assessed with regard to its context and Article 190 of the Treaty must be assessed to all the rules governing the matter in with regard not only to its wording but also question. Thus, in the context of State aid, to its context and to all the legal rules the Court of Justice has held that it was governing the matter in question. necessary to take into account possible previous decisions of the Commission and the content of the Commission's communi- cation initiating the investigation pro- cedure. 39

58. The decision to initiate an investigation therefore identifies the loans at issue as being two SNCI loans — a loan of 60. It follows that, placed in its context and BEF 6 8 0 m i l l i o n and a loan of read in the light of the decision to initiate BEF 650 million — and also the Belfin an investigation, the contested decision loans — one of them a loan for BEF makes it possible to identify the SNCI and 200 million. Belfin loans referred to. The Commission criticised the State guarantees attaching to the second instalment of the first SNCI loan (BEF 680 million), to the fourth SNCI loan (BEF 650 million) and to the two Belfin loans (BEF 300 million and BEF 200 million). 59. In so doing, the Commission used the information given in the documents which the Belgian authorities had annexed to their letter of 23 July 1996. 41 Amongst those documents were a letter addressed on 25 June 1996 by Belfin to Forges de Clabecq, 42 a supplementary agreement concluded on 3 May 1996 by Belfin and 61. Furthermore, the arguments presented Forges de Clabecq 4 3 and a letter addressed by the Kingdom of Belgium confirm that on 23 May 1996 by the Belgian Ministry of the contested decision was sufficiently Finance to the SNCI. 44 reasoned on that point. In fact, it is appar- ent from the appeal 45 that the Belgian authorities correctly identified the loans referred to by the Commission.

The first document stated that Belfin had granted two loans to Forges de Clabecq. The second document showed the amount of one of those loans, namely BEF 200 million. The third document stated 62. In those circumstances, the Court of First Instance did not err in law by holding that the statement of reasons for the con- 41 — Annex 11 to the application lodged by Forges de Clabecq tested decision met the requirements of in Case T-37/97. Article 15 of the ECSC Treaty. The first 42 — Annex 12 to the aforementioned letter of 23 July 1996.

63. By its second plea for annulment, the 64. It is not disputed that the Court of First Kingdom of Belgium claims that the state- Instance did not adjudicate on the plea ment of grounds of the contested judgment raised by the Kingdom of Belgium at first is defective. instance. The question is therefore whether the Court was required to reply to that argument. 46 — However, the foregoing considerations reveal that the contested judgment contains an error in law which was not raised by the Kingdom of Belgium. I have established that, according to the Court of First Instance, the Commission had criticised the State guarantees attaching to all the SNCI and Belfin loans. Yet we have seen that the contested decision had a more limited scope, referring only to the State guarantees attaching to the second instalment of the first SNCI loan, to the fourth SNCI loan and to the two 65. The Court of Justice has rarely taken Belfin loans. The Court of First Instance therefore committed a manifest error in identifying the SNCI and the opportunity to define the content of the Belfin loans covered by the contested decision. That error requirement that the Court of First Instance is likely to cause practical difficulties when the contested decision is implemented. Although the Commission shall state reasons. An examination of the requires the Belgian authorities to recover only the amount of aid contained in the four aforementioned guarantees, relevant judgments shows that it prefers to paragraph 110 of the contested judgment may lead to the determine, on a case by case basis, whether repayment of the aid relating to all the guarantees. From the point of view of legal characterisation, the error the Court of First Instance has stated made by the Court of First Instance constitutes an infringement of Article 33 of the ECSC Treaty. The Court, adequate reasons for the conclusion it has by substituting its own reasoning for that of the Commis- reached. However, certain principles may sion, distorted the content of the contested decision. It thereby exceeded the limits of its competence under be extracted from current case-law. Article 33 of the ECSC Treaty in respect of its review of the legality of the Commission's decisions (see, in support of this, Case C-164/98 P DIR International Film and Others v Commission [2000] ECR I-447, paragraphs 38 to 49). Since this is a plea concerning the competence of the author of the contested measure, the Court of Justice could, of its own motion, raise and penalise the error made by the Court of First Instance (see, by analogy, Case 19/58 Germany v High Authority [1960] ECR 225; and Case C-210/98 P Sakgitter v Commission [2000] ECR I-5843, 66. It may be considered that the grounds paragraph 56). However, since I am going to suggest that the Court of Justice set aside the contested judgment on of a judgment must disclose in a clear and other grounds (see point 64 et seq. of this Opinion), I do unequivocal fashion the reasoning followed not need to expand my arguments on this point. by the Court of First Instance, in such a

69. In the light of those principles, I think that the Court of First Instance was required to adjudicate on the plea raised by the Kingdom of Belgium in the present case. 67. In Connolly v Commission, 48 however, the Court of Justice imposed limits on that obligation to reply to the pleas raised. It held that the grounds of a judgment must be assessed in the light of the circumstances of the case 49 and that the Court of First Instance is not obliged to respond in detail to every single argument advanced by the applicant. 50 In accordance with the 70. Firstly, the appellant's argument was Opinion delivered by Advocate General sufficiently clear and precise within the Ruiz-Jarabo Colomer, 5 1 the Court of Jus- meaning of the rule in Connolly v Com- tice held that the Court of First Instance mission. 5 4 The Belgian Government claims was not required to respond to arguments that the extension, for a further period of which were not 'sufficiently clear and three years, of the State guarantees attach- precise' and 'adequately supported by evi- ing to the SNCI and Belfin loans did not dence'. 5 2 constitute illegal aid because it had been notified to the Commission under Article 6(2) of the Aid Code. 55 Fur- 4 7 — See, in support of this, the judgments in Case C-259/96 P thermore, the argument was 'adequately Council v De Nil and Impens [ 1 9 9 8 ] E C R I-2915, paragraphs 32 to 34, and in Case C-449/98 P IECC v supported by evidence' since the file con- Commission [2001] ECR I-3875, paragraph 70, and the orders in Case C-149/95 P(R) Commission v Atlantic tained the notification made by the Belgian Container Line and Others [1995] ECR I-2165, paragraph authorities to the Commission on 25 June 5 8 , Case C-268/96 P(R) SCK and FNK v Commission [1996] ECR I-4971, paragraph 52, and Case C-159/98 1996. 56 P(R) Netherlands Antilles v Council [1998] ECR I-4147, paragraph 70. 48 — Case C-274/99 P Connolly v Commission [2001] ECR I-1611. 53 — See, by analogy, the judgment in Sytraval and Brink's 49 — Ibid., paragraph 120. France, cited above, paragraph 64. 50 — Ibid., paragraph 121. 54 — Cited above. 51 — Opinion in Connolly v Commission, cited above, point 6 1 . 55 — Statement in intervention, points 32 and 4 5 . 52 — Judgment in Connolly v Commission, cited above, para- 56 — Annex 3 to the application lodged by Forges de Clabecq in graph 1 2 1 . Case T-37/97.

Also, the national court may, irrespective of the content of the Commission's final 73. Individuals may therefore rely, before decision, declare illegal the measure estab- national courts, on breach of the prohib- lishing the aid as well as the measures ition contained in Article 6(4) of the Code. giving effect to the aid. 60 It follows that the According to the case-law, 58 those courts validity of all the measures relating to the are required to ensure that all the inferences implementation of the aid may be affected. of such a breach are drawn in accordance That consequence poses particular prob- with national law. lems in the case of aid granted in the form of a State guarantee since, in that situation, the illegality of the aid is likely to have 57 — In respect of the prohibition contained in Article 93(3) of repercussions on the legal relations between the EC Treaty (now Article 88(3) EC), see the judgments in Case 6/64 Costa [1964] ECR 585 and in Case 120/73 the State and the lending body. The Com- Lorenz [1973] ECR 1471, paragraph 8. In respect of the mission considers, furthermore, that the prohibition contained in the current Aid Code for the Coal Industry [Commission Decision No 3632/93/ECSC of 28 December 1993 establishing Community rules for State aid to the coal industry (OJ 1993 L 329, p. 12)], see the judgment in Case C-390/98 Banks [2001] ECR I-6117, 59 — Fédération national du commerce extérieur des produits paragraphs 69 and 70. alimentaires and Syndicat national des négociants et 58 — Case C-354/90 Fédération national du commerce extérieur transformateurs de saumon, paragraphs 12 and 13, and des produits alimentaires and Syndicat national des SFEI and Others, paragraphs 40 and 43. négociants et transformateurs de saumon [1991] ECR 60 — Fédération national du commerce extérieur des produits I-5505, paragraph 12, Case C-39/94 SFEI and Others alimentaires and Syndicat national des négociants et [1996] ECR I-3547, paragraph 40, and Banks, cited above, transformateurs de saumon, paragraph 12, and SFEI and paragraph 73. Others, paragraph 40.

75. It follows that the plea put forward by the Kingdom of Belgium at first instance B — Fleas relating specifically to the SNCI loans

61 — Commission Notice 2000/C 71/07 on the application of Articles 87 and 88 of the EC Treaty to State aia in the form of guarantees (OJ 2000 C 72 p. 14, points 6.4 and 6.5). 62 — Joined Cases C-46/93 and C-48/93 Brasserie du pêcheur and Factortame [1996] ECR I-1029, paragraph 51. 63 — See, in support of this, Keppenne, J-P., Guide des aides 77. In the light of the conclusions I have d'État en droit communautaire, Bruylant, Brussels, 1999, point 408. reached, an examination of the other pleas 64 — See also, in support of this, Waelbroeck, M., and Frignani, for annulment is not warranted. If, as I A., Commentaire J. Megret, Le droit de la CE, volume 4, Concurrence, éditions de l'université de Bruxelles, Brussels believe, the contested judgment should be 1997, 2nd ed., point 319. set aside on the ground that the Court of 65 — See the Opinion of Advocate General Tesauro in Case C-142/87 Belgium v Commission, known as 'the Tube- First Instance failed to fulfil its obligation meuse case' [1990] ECR I-959, I-985. to state reasons, the other pleas put for- 66 — See the Opinion of Advocate General Jacobs in SFEI and Others, cited above, point 77. Advocate General Jacobs ward by the Kingdom of Belgium are cites the example of competitors who have lost profits and market shares as a result of the immediate payment of the irrelevant. It is therefore in the alternative aid. that I shall continue with my examination.

79. In its first plea, the appellant criticises (b) Assessment the Court of First Instance for holding that the Belgian authorities could not rely on the decisions of 1982 and 1985. 67 It maintains that the Court's reasoning contains a 82. In paragraphs 97 to 101 of the con- double error in law. tested judgment, the Court held that the Belgian authorities could not rely on the decisions of 1982 and 1985 on the ground that, by making significant modifications to the detailed rules for repayment of the 80. Firstly, the Court made an erroneous SNCI loans, they had infringed the con- characterisation in law of the facts. It held ditions for approval laid down by those that the 1982 decision made authorisation decisions. of the State guarantee attaching to the first SNCI loan conditional on Forges de Cla- becq not receiving any subsequent financial support from the Belgian State. However, that detail does not appear amongst the conditions imposed by the Commission for 83. I consider that the contested judgment approval of the guarantee in question. That contains an error in law on that point. In error of characterisation was in breach of my view, the Court did not establish that the contested decision was not sufficiently reasoned under Article 15 of the ECSC 67 — Paragraphs 97 to 101 of the contested judgment. Treaty.

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84. It is apparent from settled case-law that 86. It is not in dispute that the Commission a plea alleging infringement of an institu- altered that assessment in the contested tion's obligation to state the reasons for a decision. It held that: measure constitutes a matter of public interest which must be raised by the C o m m u n i t y judicature of its own motion. 68 If the Court of First Instance does not raise that plea of its own motion, although the contested decision does not 'The provision of a State guarantee in meet the requirements to state reasons, it respect of a loan normally constitutes State commits an error in law which must be aid, which should have been notified to the penalised by the Court of Justice. 69 Commission and should not have been put into effect without the latter's approval These rules were not complied with in the case of the loans granted to Forges de Clabecq....

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BELGIUM v COMMISSION

88. In the circumstances, I consider that the informed the Commission of their decision Court of First Instance erred in law by to extend the guarantee to the whole of the omitting to raise of its own motion the plea loan. 7 5That notification also covered alleging infringement of the obligation to other measures planned by the Belgian state reasons. Furthermore, by stating the State to help the steel sector. reasons why, in its view, the Belgian auth- orities could not rely on the decisions of 1982 and 1985, the Court substituted its own reasoning for that of the Commission. It therefore also exceeded the limits of its competence under Article 33 of the ECSC Treaty in respect of the review of the 91. By a communication of 11 October legality of measures adopted by the Com- 1982, adopted pursuant to Article 8(3) of mission. 73 For these various reasons, I Decision No 2320/81/ECSC, 76 the Com- therefore suggest that the Court of Justice mission decided to initiate the investigation should set aside the contested judgment. procedure and to give the parties concerned notice to submit their observations. 7 7

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guarantee (BEF 1 500 million for the first under Article 8(3) as soon as it receives the stage of the investment programme and observations of the interested parties in BEF 485 million for operational aid). connection with the said procedure. For However, such authorisation is subject to that purpose it will take account of the the following conditions: opposing views put forward which have enabled it to adopt this decision.

78 — This was a 7% reduction in interest over five years on an amount of BEF 783 million, tax assistance such as exemption from real property deduction for three years and the opportunity to make repayments before the due The Commission will decide as to the date, as well as the State guarantee which was to attach to part of the second loan for BEF 850 million (see the 1982 guarantees still subject to the procedure decision, p. 2).

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BELGIUM v COMMISSION

Secondly, the Belgian authorities are laid down for approval. 80 As that was not required to limit to BEF 820 million the the case, the Commission's remark can State guarantee attaching to the third SNCI constitute only a simple warning, express- loan for BEF 1 500 million. Thirdly, Forges ing negative feelings with regard to any de Clabecq cannot use the aid to cover the further intervention by the Belgian auth- losses arising from non-compliance with orities in favour of Forges de Clabecq. the Commission's provisions relating to prices. It must also fulfil its obligations regarding production quotas.

96. The documents in the case confirm that the matter in question could not be a condition for the approval of the State guarantee. Indeed, by the 1985 decision, the Commission authorised the Bel- gian Government to grant new aid of BEF 2 253 million to Forges de Clabecq, BEF 650 million of which was the State 94. It is clear from this that, contrary to guarantee on the fourth SNCI loan. It is what the Court of First Instance held, the hard to believe that the 1982 decision Commission did not lay down any con- contained a provision prohibiting any sub- dition to the effect that 'authorisation of sequent aid from the Belgian State when, the measure notified was to be [Forges de three years later, the Commission itself Clabecq's] final chance of seeking solutions approved new aid in favour of Forges de for its problems in financial assistance from Clabecq. 81 the State'. 79

1. First plea: distortion of the clear sense of the evidence

98. Without it being necessary to examine the other arguments put forward by the appellant, I therefore propose that the Court of Justice set aside the contested judgment. (a) Belfin's arguments

101. In its first plea, Belfin criticises the Court for having held that the State guar- antee related to the loans which it had 2. Second plea: infringement of the obli- granted to Forges de Clabecq. gation to state reasons

99. By its second plea, the Kingdom of 102. In paragraph 70 of the contested Belgium claims that the statement of judgment, the Court held that 'the Belgian grounds of the contested judgment is inad- Government's argument that there was no equate. In the light of the foregoing con- State guarantee for the Belfin loans is siderations, an examination of this plea is refuted by a letter of 25 June 1996 now devoid of purpose. addressed by Belfin to [Forges de Clabecq]... , stating that the agreement of principle with a deferral of three years in the timetable for repayment of the principal sum of the loans granted to [Forges de Clabecq] by Belfin was subject to the condition that "the State agree (public C — Pleas relating specifically to the Bel- loan) to extend its guarantee to cover that fin loans deferral".'

100. The Kingdom of Belgium puts for- ward two pleas for annulment in respect of the Belfin loans. The first plea alleges 103. According to Belfin, the letter of distortion of the evidence brought before 25 June 1996 does not in any way establish

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(b) Assessment 83 — Judgments in Case C-136/92 P Commission v Brazzelli Lualdi and Others [1994] ECR I-1981, paragraph 49, and VBA v Florimex and Others, cited above, paragraph 139; orders in Case C-59/96 P Koelman v Commission [1997] ECR I-4809, paragraph 33, and Case C-55/97 P AIUFASS and AKT v Commission [1997] ECR I-5383, paragraph 24. 84 — Judgments in Case C-8/95 P New Holland Ford v Commission [19981 ECR I-3175, paragraph 72, a n d VBA v Florimex and Others, cited above, paragraph 139, 105. Under Article 32d of the ECSC and order in Case C-341/98 P Proderec v Commission [2000], not published in the European Court Reports, Treaty, which is identical to Article 168A paragraph 27. of the EC Treaty (now Article 225 EC), the 85 — See, in particular, the judgments in Commission v Brazzelli Lualdi and Others, cited above, paragraph 66; Case appeal must be limited to questions of law. C-401/96 P Somaco v Commission [1998] ECR I-2587, An appeal may therefore rely only on paragraph 54, and Case C-185/95 P Baustahlgewebe Commission [1998] ECR I-8417, paragraph 2 4 . v

grounds relating to the infringement of 86 — Judgments in Hilti v Commission, cited above, paragraph rules of law, to the exclusion of any 42; Case C-362/95 P Blackspur DIY and Others v Council and Commission [1997] ECR I-4775, paragraph 29; New appraisal of the facts. 82 Holland Ford v Commission, cited above, paragraph 2 6 ; Baustahlgewebe v Commission, cited above, paragraph 2 4 ; Case C-257/98 P Lucaccioni v Commission [1999] ECR I-5251, paragraphs 45 to 47; and orders in AIUFASS and AKT v Commission, cited above, paragraph 25; Case 82 — See, in particular, Case C-283/90 P Vidrányi v Commission C-140/96 P Dimitriadis v Court of Auditors [1997] ECR [1991] ECR I-4339, paragraph 12 and Case C-53/92 P I-5635, paragraph 35, and Proderec v Commission, cited Hilti v Commission [1994] ECR I-667, paragraph 10. above, paragraph 28.

111. I, for my part, consider that all of this evidence shows, contrary to the finding of the Court of First Instance, that the Belgian State guarantee covered the borrowings 113. The Belfin Shareholders' Agreement made by Belfin, and not the loans made explains and expands the provisions estab- to Forges de Clabecq. lished by the Royal Decree of 29 June 1981. Article 8 stipulates that 'Belfin will have the task of undertaking to pay, mainly 87 — Statement in intervention, points 34 to 37. through borrowings, up to three successive 88 — Ibid, points 16, 18, 35, 36, 37, 38 and 39. instalments of 10 000 million Belgian 89 — Moniteur belge of 10 July 1981 (Annex 17 to the statement francs each.... It will lend those amounts in intervention). to the borrowers [who are] designated... the 90 — Annex 18 to the statement in intervention. 91 — Annex 18 to the statement in intervention. final beneficiaries'.

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OPINION OF MR LÉGER — CASE C-197/99 P

116. Unlike the Court of First Instance, I omy. In order to do this, Belfin borrows do not think that the abovementioned letter money from financial institutions and, in contradicts the other evidence adduced by turn, lends those sums to beneficiary under- the appellant. takings. Under Belgian law, the State guarantee is granted automatically to cover the borrowings made by Belfin.

117. Admittedly, taken out of context, that letter may lead to the conclusion that the State guarantee related to the Belfin loans. The introductory paragraph and point 4 of the letter use terms which seem to give that impression. Since the introductory para- It follows that borrowings made in order to graph refers to a 'deferral' of the repayment provide the financing correspond to the of the loans granted to Forges de Clabecq, loans granted by Belfin. Supplementary point 4, by making that deferral subject to Agreement No 3 to the Belfin Shareholders' the condition that the State extend its Agreement, signed on 25 April 1994, states guarantee to the 'deferred due dates', that, when Belfin is invited to 'extend a allows the assumption that the State guar- loan', it is, at the same time, 'authorised... antee attaches to the loans granted by to make a borrowing, with the guarantee of Belfin. the Belgian state,' for the same amount.

120. In those circumstances, I consider that amounts borrowed by Belfin was always the Court of First Instance could not take counter-guaranteed by the final benefici- the letter of 25 June 1996 as the sole basis aries of the loans. Indeed, under Article 11 for its conclusion that the State guarantee of the Belfin Shareholders' Agreement, the related to the Belfin loans. By basing its beneficiaries are required to contribute to a conclusion on that document, when three 'Guarantee Fund' established at Belfin. other documents contradicted that inter- Furthermore, under Article 10 of the Agree- pretation, the Court distorted the other ment, actions by the State against Belfin on evidence submitted to it by the Belgian the ground of calls against the guarantee Government. I therefore propose that the for the amounts borrowed are set against Court of Justice, on this fourth ground, the amounts constituting the 'Guarantee should set aside the contested judgment. Fund'. In those circumstances, the appel- lant considered that, even if the Belfin loans were covered by guarantee, that guarantee was a private guarantee and did not con- stitute State aid.

2. Second plea: infringement of Articles 30 and 46 of the ECSC Statute

123. However, in paragraph 70 of the contested judgment, the Court of First Instance merely stated that '[t]he fact that State guarantees constitute State aid may (a) Arguments of the parties also no longer effectively be denied'. The appellant and the intervener consider that that assessment is not sufficiently reasoned.

121. In the second plea, the Kingdom of Belgium and Belfin claim that the grounds of the contested judgment are inadequate.

125. I stated that the grounds of a judg- 128. The Court has also held 96 that the ment must disclose in a clear and unequivo- expression aid '... necessarily implies cal fashion the reasoning followed by the advantages granted directly or indirectly Court of First Instance, in such a way as to through State resources or constituting an enable the persons concerned to ascertain additional charge for the State or for bodies the reasons for the decisions taken and to designated or established by the State for enable the Court of Justice to carry out its that purpose'. 97 It is apparent that not all review. However, the grounds of a judg- the advantages granted by a State necess- ment must be assessed in the light of the arily constitute State aid. Only advantages circumstances of the case. The Court of granted directly or indirectly through State First Instance is not obliged to respond to resources are to be regarded as 'aid' within arguments which are not 'sufficiently clear the meaning of Article 4(c) of the ECSC and precise' or are clearly of secondary Treaty. importance.

129. In the present case, the Court of First Instance did not state the specific reasons why the State guarantees on the borrowings made by Belfin were advantages granted 126. In the present case, I consider that directly or indirectly through State paragraph 70 of the contested judgment resources. It merely stated, in general does not fulfil these requirements for stat- terms, that the fact that State guarantees ing reasons. constituted State aid may not be denied.

131. In those circumstances, I consider that the Court of First Instance failed to fulfil its V I I— The substance of the case obligation to state reasons. On this fifth ground, I therefore propose that the Court set aside the contested judgment.

134. The Kingdom of Belgium seeks the annulment of the contested decision in so far as it refers to '[t]he State guarantees in respect of the Belfin and SNCI loans and their extension to the postponed due dates'. 100 VI — Transfer of the case following annulment

135. In support of its claims, it raises four 132. The first paragraph of Article 54 of pleas for annulment. Those pleas allege: (1) the ECSC Statute provides that, if the infringement of the obligation to state appeal is well founded, the Court of Justice reasons; (2) infringement of the decisions shall quash the decision of the Court of of 1982 and 1985; (3) infringement of First Instance. In that event, it may itself Article 6 of the Aid Code, and (4) manifest give final judgment in the matter, where the error of assessment and infringement of Article 4(c) of the ECSC Treaty.

99 — The Commission's response, points 76 and 77, and the Commission's observations on Belfin's statement in inter- 100 — Point V of the contested decision, under the heading vention, points 34 to 41. 'Rescheduling of debts', fourth paragraph.

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OPINION OF MR LÉGER — CASE C-197/99 P

102 — Ibid, points 23 to 29. 101 — Statement in intervention, point 21. 103 — See points 85 to 87 of this Opinion.

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notification from the Belgian authorities of 145. In actual fact, the reasons why the 31 May 1985 104 and authorised them to Commission went back on its previous constitute a guarantee in respect of the decisions were revealed at the appeal stage. fourth SNCI loan for BEF 650 million. In its response, 107 the Commission claimed that the Belgian authorities could not rely on the decisions of 1982 and 1985 on the ground that they had made significant modifications to the rules for repayment of the SNCI loans. It is clear that such an 142. It is not in dispute that, in the explanation — even if it were founded — contested decision, the Commission altered is too late and cannot properly 'remedy' the that assessment. It held that: 'The provision lack of a statement of reasons for the of a State guarantee in respect of a loan contested decision. I therefore propose that normally constitutes State aid, which the Court of Justice annul that decision for should have been notified to the Commis- failure to state reasons. sion and should not have been put into effect without the latter's approval.... These rules were not complied with in the case of the loans granted to Forges de Clabecq'. 105

3. Third plea: infringement of Article 6 of information available to the Commission the Aid Code when the decision was adopted. 110 The Court of Justice has held that a Member State, in order to contest the legality of a decision concerning State aid, may not rely on evidence which it has not brought to the Commission's attention in the course of the administrative procedure. 1 11This is clearly 147. In the light of the conclusions I have the situation where the State has refused to reached, an examination of the other pleas respond to an express request for infor- for annulment is not warranted. If, as I mation from the Commission. 112 believe, the contested decision should be annulled on the ground that the Commis- sion infringed Article 15 of the ECSC Treaty, the other pleas put forward by the Kingdom of Belgium are irrelevant. It is therefore in the alternative that I shall continue with my examination.

110 — Case 234/84 Belgium v Commission [1986] ECR 2263, patagraph 16; Case C-241/94 France v Commission [1996] ECR I-4551, paragraph 3 3 , and Case C-288/96 Germany v Commission [2000] ECR I-8237, paragraph 34. 111 — Joined Cases C-278/92 to C-280/92 Spain v Commission [1994] ECR I-4103, paragraph 3 1 . 112 — France v Commission, cited above, paragraphs 36 and 37. 149. On that point, I should reiterate that 113 — C a s e T-67/94 Ladbroke Racing v Commission [1998] the legality of a decision concerning State ECR II-1, paragraph 189 and the references cited. aid is to be assessed in the light of the 114 — See, to that effect, Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty, OJ 1999 L 83, p. 1, sixth recital of the preamble. 115 — Case C-364/90 Italy v Commission [1993] ECR I-2097, 109 — Statement in intervention, points 32 and 4 5 . paragraph 20.

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stage cannot subsequently charge the Com- A first series of documents 118 recorded the mission with having made a manifest error agreement between SNCI and Belfin to of assessment or having given insufficient defer for a period of three years the due reasons for its decision. 116 dates of the loans that they had granted to Forges de Clabecq. They showed that the agreement of the financial institutions was subject to the condition that the Belgian authorities agreed to maintain and extend the State guarantee to the deferred due dates. However, none of those documents supported the conclusion that the Belgian 151. The same principles apply to steel aid authorities had already extended the guar- since Article 86 of the ECSC Treaty antees in question. imposes on Member States a duty to cooperate in good faith comparable to that established by Article 5 of the EC Treaty.

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had signed a supplementary agreement to authorities never denied that the extension the loan agreement between Belfin and of the guarantees in question had already Forges de Clabecq 121 allowing the due taken place before the notification of dates to be deferred to 16 December 1996. 25 June 1996.

156. It follows that, in the light of the information communicated by the Belgian authorities in the course of the adminis- 154. On the basis of that information, the trative procedure, the Commission could Commission considered that the Belgian rightly consider that the extension of the authorities had already extended the guar- State guarantees had been carried out antees in question at the time of the without its prior authorisation. notification of 25 June ,1996. It therefore took that fact into account in its decision to initiate the investigative procedure, stating that 'the renegotiation of the long-term debts (due dates deferred for three years and lowering of interest rates) [had] already taken place'. 122 157. In those circumstances, the Commis- sion did not commit any manifest error of assessment by describing the contested measure as illegal aid. The third plea raised by the Kingdom of Belgium should there- fore be rejected.

160. However, the same conclusion cannot be transposed to the assessment made by the Commission in the contested decision. In the alternative, the Belgian Government considers that the Commission infringed Article 4(c) of the ECSC Treaty by holding that the guarantees in question constituted State aid. It states that the State guarantee for the amounts borrowed by Belfin is always counter-guaranteed by the final beneficiaries of the loans. Indeed, under 161. I have established that the legality of a Article 11 of the Belfin shareholders' agree- decision concerning State aid is to be ment, the beneficiaries are required to assessed in the light of the information contribute to a 'Guarantee Fund' estab- available to the Commission when the lished at Belfin. Furthermore, under decision was adopted. 127 I have also Article 10 of the agreement, actions by stated 128 that the obligation to cooperate, the State against Belfin on the ground of imposed by Article 86 of the ECSC Treaty, calls against the guarantee for the amounts requires Member States to provide the borrowed, are set against the amounts Commission with all information required constituting the 'Guarantee Fund'. There- to enable it to assess whether the aid in fore, even if the Belfin loans were covered

126 — See points 109 to 120 of this Opinion. 124 — Statement in intervention, points 34 to 35. 127 — Point 149 of this Opinion. 125 — Annex 21 to the statement in intervention. 128 — Point 150 of this Opinion.

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question exists and is compatible. A ment is concerned, the principle of defer- Member State which does not fulfil its duty ring repayment of the sums... for three of cooperation during the administrative years is justifiable, if it forms part of a stage cannot subsequently charge the Com- general restructuring scheme, which will mission with having made a manifest error give the undertaking a chance of survival. of assessment. That applies to the Belfin loans, as well as to the [SNCI] loans covered by State guarantee.' 130

4. Agreement of the State (public loan) to As regards the deferral for a three-year extend its guarantee to the deferred due period of the due dates of the long-term dates.' loans... , Belfin has already taken a decision in principle. As for the State's position, the Government... takes the view that deferral is justified... on condition that all the elements of the restructuring scheme are put in place... . As soon as that is the case, 166. Finally, the letter addressed on 25 June the Government will submit the file for the 1996 by the Ministry of Finance to the approval of the Minister for Finance, with Prime Minister of the Walloon Govern- a favourable opinion.' ment 132 stated:

'Further to our telephone conversation today, I confirm that 167. I think that these various factors, taken out of the context which I have described in these proceedings, may reason- ably have led the Commission to consider that the Belgian State guarantee covered the 1. the due dates of 15/12/95 of the SNCI loans granted by Belfin. loans guaranteed by the State are suspended until 16 December 1996 (cf. copy in Appendix);

2. that also applies to the due date of 9 May 1996 for the Belfin loan (cf. 168. Furthermore, contrary to what the Appendix). Belgian Government claims, the documents in the case do not support the conclusion that the Commission knew of Belfin's intervention mechanism before the notifi- cation of 25 June 1996. Admittedly, the wording of the decision of 29 June 1983 1 3 3 Until 16 December 1996, there is therefore proves that the Commission was called no problem for the State guarantee... . upon to assess the compatibility of in- vestment aid for the steel undertaking

172. Article 122 of the Rules of Procedure provides that, where the appeal is well founded and the Court itself gives final judgment in the case, the Court shall make a decision as to costs. 169. In those circumstances, I consider that, in the light of the information avail- able to it, the Commission did not commit a manifest error of assessment by holding that the Belfin loans were covered by a Belgian State guarantee. 173. Under Article 69(2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs if they have been applied for in the successful partys plead- ings. Under Article 69(3), where each party fails on one or more heads, the Court may order that the costs be shared. Article 69(4) 170. The Kingdom of Belgium's alternative allows the Court to order an intervener to line of argument should be rejected for bear its own costs. similar reasons. It is apparent from the documents submitted to the Court of Jus- tice that at no time during the adminis- trative procedure did the Belgian auth- orities describe the existence and operation of the counter-guarantee mechanism estab- lished by the Belfin Shareholders' Agree- ment. The Kingdom of Belgium cannot 174. In the present case, I have established therefore reasonably accuse the Commis- that almost all the pleas of the appeal were sion of infringing Article 4(c) of the ECSC well founded. On the other hand, only the Treaty by holding that the State guarantees examination of one of the four pleas raised constituted State aid. at first instance revealed grounds for annulling the contested decision. I therefore consider that it is fair to decide that the Commission shall bear, as well as its own costs, the costs incurred by the Kingdom of Belgium and by Belfin in the appeal pro- ceedings. As to the remainder, I see no reason to amend the operative part of the 171. I therefore propose that the Court of contested judgment or to depart from the Justice reject the fourth plea for annulment. Rules of Procedure.

(3) The Commission of the European Communities shall bear, as well as its own costs, the costs incurred by the Kingdom of Belgium and by the Compagnie belge pour le financement de l'industrie SA (Belfin) in connection with the appeal proceedings.

(4) The Kingdom of Belgium shall bear the costs it incurred in the proceedings before the Court of First Instance.

(5) Forges de Clabecq SA, the Walloon Region and the Société wallonne pour la sidérurgie SA (SWS) shall bear their own costs.

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