C-310/99

3. Employers who take people on via training and work experience contracts benefit from the following reductions in social security contributions during the period of the contract: 25% for firms located in areas other than the Mezzo- I — The Italian legislation giorno; 40% for firms in the commercial and tourism sector, with fewer than 15 employees, established in areas other than the Mezzogiorno; and total exemption for 2. The documents before the Court reveal craft firms and firms in areas where the that the training and work experience level of unemployment is above the national average. In order to qualify for these reductions, the employer must not 1 — Original language: Spanish. have reduced staff numbers in the previous 2 — 2000/128/EC: Commission Decision of 11 Mav 1999 12 months, except where he is taking on concerning aid granted by Italy to promote employment (OJ 2000 L 42, p. 1). employees with a different qualification.

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3 — Council Regulation (EEC) No 2081/93 of 20 July 1993 amending Regulation (EEC) No 2052/88 on the tasks of the 4 — Published in GURI No 154 of 4 July 1997. Structural Funds and their effectiveness and on coordination 5 — As the contested Decision was adopted on 11 May 1999, the of their activities between themselves and with the oper- Commission refers throughout it to the articles of the EC ations of the European Investment Bank and the other Treaty under their new numbering, even though the aid existing financial instruments (OJ 1993 L 193, p. 5). scheme being examined applied from November 1995.

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interested third parties, represented by the — the employment of workers experienc- Confederazione generale dell'idustria ita- ing particular difficulties in entering or liana (Confindustria), 6 and the Italian re-entering the labour market. For the authorities. After examining them, the purposes of this Decision, "workers Commission adopted the Decision whose experiencing particular difficulties in annulment is sought by Italy. entering or re-entering the labour mar- ket" shall mean young persons under the age of 25, [university graduates] up to the age of 29 and the long-term unemployed, i.e. out of employment for more than one year.

7. Article 1 of the contested Decision pro- vides:

2. Aid for training and work experience contracts which does not satisfy the con- ' 1 . The aid granted unlawfully by Italy ditions set out in paragraph 1 is incom- since November 1995 for employment patible with the common market.' under the training and work experience contracts provided for in Laws Nos 863/84, 407/90, 169/91 and 451/94 is compatible with the common market and the EEA Agreement provided that it concerns:

9. Generally, the applicant considers that, when comparing the characteristics, nature and aims of the scheme established for Article 3 states: training and work experience contracts with the Guidelines on aid to employment, the Commission has adopted a purely financial viewpoint, without taking into account that those contracts constitute a fundamental means of taking action in the 'Italy shall take all necessary measures to labour market, in order to implement an recover from the recipients the aid which active policy in the field of employment, in does not satisfy the conditions of Articles 1 particular in connection with young per- and 2 and has already been unlawfully sons, who have traditionally been con- paid. sidered to comprise the weak segment of the market.

Repayment shall be made in accordance with the procedures of Italian law. The 10. The Commission maintains that the amounts to be repaid shall bear interest investigation carried out to assess the from the date on which the aid was paid nature of aid and its compatibility with until the date on which it is effectively the common market leaves aside any con- recovered. The interest shall be calculated sideration of its effectiveness. It states that, on the basis of the reference rate used to in this case, its only criterion for determin- calculate the net grant equivalent of ing the nature of the aid within the meaning regional aid.' of the Treaty has been its impact on I - 2296

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competition and on trade between Member ing the measures. That is why the Com- States, and that its compatibility with the mission must ensure that the proliferation common market is determined by appli- of measures to promote employment does cation of the exceptions provided for in not adversely affect the parallel measures Article 87(2) and (3) EC. taken to reduce artificial distortion of competition, under Articles 87 and 88 EC.

13. The Court has consistently held that, as regards the application of Article 87(3) EC, the Commission enjoys a wide discretion, 12. As is expressly stated in Paragraph 3 of the exercise of which involves assessments the Guidelines on aid to employment, of an economic and social nature which published in December 1995, the tax and must be made within a Community con- financial measures which may be adopted text. 9 Since the examination of the com- by the Member States will be called upon to patibility of an aid scheme with the com- play an increasing role in encouraging firms mon market involves a complex economic to hire workers experiencing utmost dif- appraisal, the Court's review of the Com- ficulty in entering the labour market. mission's act is confined to verifying However, it is also stated in Paragraph 3 whether the Commission complied with that, although the objective of the measures the relevant rules of procedure and the is to improve the situation of workers, it obligation to state reasons, whether the must be recognised that firms also benefit facts on which the contested finding was in that they are able to reduce their costs based have been accurately stated and because of the role they play in implement-

9 — Case C-278/95 P Siemens v Commission 11997] ECR I-2507, 8 — Council Decision of 19 January 2001 on Guidelines for paragraph 35; Case C-355/95 P TWD v Commission [1997] Member States' employment policies for the year 2001 ECR I-2549, paragraph 26; and Case C-156/98 Germany v (OJ 2001 L 22, p. 18). Commission [2000] ECR I-6857, paragraph 67.

14. The Court has consistently held that 16. According to the case-law of the Court the statement of reasons required by of First Instance, in the statement of Article 253 EC must be appropriate to the reasons of the decisions which it has to act at issue and must disclose in a clear and adopt to ensure implementation of the rules unequivocal fashion the reasoning followed governing competition, the Commission is by the institution which adopted the meas- not obliged to adopt a position on all the ure in question, in such a way as to enable arguments relied on by the parties con- the persons concerned to ascertain the cerned; it is sufficient for it to set out the reasons for the measure and to enable the Court of Justice to carry out its review. It is also clear from the relevant case-law that it 11 — Case C-350/88 Delacre and Others v Commission [1990] ECR I-395, paragraphs 15 and 16; Case C-466/93 Atlanta Fruchthandelsgesellschaft and Others (II) [ 1 9 9 5 ] ECR I-3799, paragraph 16; Belgium v Commission, cited 10 — Case 138/79 Roquette Frères v Council [1980] ECR 3333, above in footnote 10, paragraph 86; Case C-367/95 P paragraph 25; Joined Cases 142/84 and 156/84 BAT and Commission v Sytraval and Brink's France [1998] Reynolds v Commission [1987] ECR 4 4 8 7 , paragraph 62; ECR I-1719, paragraph 6 3 ; and Joined Cases C-15/98 Case C-174/87 Ricoh v Council [1992] ECR I-1335, and C-105/99 Italy and Sardegna Lines v Commission paragraph 6 8 ; Case C-225/91 Matra v Commission [1993] [2000] ECR I-8855, paragraph 6 5 . ECR I-3203, paragraph 2 5 ; and Case C-56/93 Belgium v 12 — C a s e C-288/96 Germany v Commission [2000] ECR Commission [1996] ECR I-723, paragraph 11. I-8237, paragraph 84.

17. Misuse of powers is one of the pleas most frequently invoked by applicants A — First plea: misuse of powers and seeking the annulment of a measure. How- inadequate statement of reasons as regards ever, it is very difficult to establish its the definition of 'young persons' existence. The Court considers that misuse of powers is the adoption by a Community institution of a measure with the exclusive or main purpose of achieving an end other than that stated or evading a procedure 18. Italy alleges, specifically, that the specifically prescribed by the Treaty for Decision's definition of 'young persons' is dealing with the circumstances of the illogical. Although the statistics provided in case. 15 Misuse of procedure by an Institu- the administrative procedure show that tion which, in order to avoid the particular unemployment, given its specific character- complexity of one procedure, uses another istics among young people in Italy, and which it finds easier, is treated by the Court especially in the Mezzogiorno region, in the same way as misuse of powers, which affects persons in the age group up to 32 provides grounds for the annulment of the years, the Commission decided to include vitiated act. 16 in that category only those aged under 25, or 29 in the case of graduates. However, the Guidelines on aid to employment do 13 — Case T-44/90 La Cinq v Commission [1992] ECR I I I , not establish any limit. This age restriction paragraph 4 1 , and Case T-459/93 Siemens v Commission 19951 ECR II-1675, paragraph 3 1 . introduces an unacceptable rigidity to the 14 — Siemens v Commission, cited in footnote 9 above, paragraph 16. notion of 'young people', which is difficult 15 — C a s e C-84/94 United Kingdom v Council [1996] ECR I-5755, paragraph 69, and Case C-48/96 P Windpark Croothusen v Commission [1998] ECR I-2873, paragraph 52. 17 — C a s e 135/87 Vlachou v Court of Auditors [1988] 16 — Case 148/87 Frydendahl Pedersen v Commission [1988] ECR 2 9 0 1 , paragraph 27; and Case C-107/90 P Hoch- ECR 4 9 9 3 , paragraph 12. baum v Commission [1992] ECR I-157, paragraph 14.

19. The Commission maintains that, even though the Guidelines on aid to employ- 21. I do not agree, however, that these ment do not establish any age limit, both reasons may provide justification for a the Community measures and those imple- Member State, however high its unemploy- mented by the Member States generally for ment rate, to decide unilaterally that the benefit of young people are directed at workers of up to 32 years old, in general, persons aged under 25. Therefore, the and up to 35 or even 45 in some areas, 18 fixing of a variable, arbitrary limit depend- who experience particular difficulty in ing on the characteristics of each national entering or re-entering the labour market, labour market would lack objectivity and must be classed as 'young people' and be would have no logical connection with entitled to benefit from aid to employment. those measures. The C o m m i s s i o n also s t a t e s , in Paragraph 78 of the Decision, that, although unemployment is highest in southern Italy, it cannot be said that the percentage of jobseekers is higher in the 25 to 34 age group than in the 15 to 24 age group. In Paragraph 81, the Commission refers to a Report on the situation of young persons, submitted by the Italian auth- orities, which shows that '65% of unem- ployed persons in the 15 to 24 age group 20. I agree with Italy that the Guidelines on stated that they had been seeking employ- aid to employment do not specify who is ment for over a year (long-term unem- included in the category of 'young persons' for the purposes of examining the com- patibility of an aid scheme with the com- 18 — The Commission points out, in its rejoinder, that, in mon market. I also agree that it may be a exercise of the power conferred on them by domestic law, positive sign that the term has been given a some regions have raised the age limit in order that workers may have access to tne training and work general meaning, since the age limit which experience contracts. It has been fixed at 35 years of age in Lazio, 38 in Calabria, 40 in Campania, Abruzzo and defines 'young persons' varies according to Sardinia, and 45 in Basilicata, Molise, Apulia and Sicily.

ployed); that figure rose to 68% for the 25 most of the Member States concerned to 34 age group. 19 On the basis of that young people under the age of 25. 21 The information, the Commission therefore same criterion appears in Paragraph 76 of concludes that the trend should be exam- the Decision. Furthermore, as stated in ined from the standpoint of structural Paragraph 85, after considering the infor- unemployment and not in terms of the mation supplied by the Italian authorities raising of the age limit for the definition of and by Confindustria concerning the age at "young persons'". which university degrees are gained in Italy (26.8 as against a European average of 25.7), the Commission maintained that, solely as regards university graduates, the statistics and the institutional factors relat- ing to the length of studies justified extend- ing the definition of 'young persons' to 22. We must not lose sight of the fact that include the 25 to 29 age group. the Commission has to examine the com- patibility of an aid scheme in a Community context. This means that any exception to the fundamental incompatibility estab- lished by Article 87(1) EC must be formu- lated, interpreted and applied as uniformly and regularly as possible, because that is the only way to ensure consistency and equality of treatment in the implementation 24. In my view, the Commission has set out of the rules governing State aid. very thoroughly the criteria which led it to fix at 25 years or, in the case of university graduates, 29 years, the age limit for defin- ing 'young persons'; therefore, the state- ment of reasons for the contested Decision is not inadequate. 23. In the interests of that uniformity, and in the absence of a definition of 'young persons' in the Guidelines on aid to employment, 20 the Commission, from the time the Article 88(2) procedure was initi- ated, bore in mind that the measures adopted to assist young people both at Community level and those introduced in 25. As regards whether there is misuse of powers, Italy has not established that the 19 — Secondo rapporto sulla condizione giovanile, for 1997, Commission, in setting those age limits, Istituto Nazionale di Statistica (ISTAT). was pursuing different aims from those it 20 — Nor in the rest of the Community regulations, as far as I was required to pursue in the examination have been able to ascertain. In fact, I have found only one similar age limit, in Commission Regulation (EC) of State aid. No 68/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to training aid (OJ 2001 L 10, p. 20), Article 2(g) of which defines as 'disadvantaged worker', amongst others, 'any young person under 25 who has not previously obtained his first 21 — It also cites, in support of that limit, the International regular paid employment.' Labour Office's Report on employment and the young.

29. I cannot agree with Italy on this point, for two reasons. First, in order to judge 27. In Italy's view, the statement made by Paragraphs 91 and 92 of the Decision, it is the Commission in Paragraph 91 of the necessary to keep in mind some of the Decision is unfounded. It ought to have earlier paragraphs, to be specific, Para- proved, on objective evidence, that solely in graphs 76 to 90, which contain the infor- the case of the aid to help workers with mation and reasoning on which the Com- particular difficulties in entering or re- mission relies. entering the labour market — namely, young people under 25, graduates up to the age of 29 and the long-term unem- ployed (out of work for more than a year) — or in the case of the aid allocated to job creation, does total aid not exceed the amount needed to promote employ- ment. Second, in order to evaluate aid to employ- ment, the Commission is required to follow the criteria laid down in Chapter IV of the Guidelines for application of the deroga- tions established in Article 87(2) and (3) EC. In accordance with that rule, the 28. The Commission points out that, after Commission encourages aid to promote concluding that the training and work job creation. The fact that, in addition, experience contracts were in the nature of vocational training is provided for the aid, in that they distorted competition by worker, will contribute significantly to a strengthening the financial position and favourable assessment. However, in any opportunities of the recipient firms with event, the fourth indent of Paragraph 21 of respect to competitors who did not receive the Guidelines requires the Commission to the aid, it found that aid was compatible ensure that the level of aid does not exceed with the common market only if it were the amount needed to promote the creation intended for workers who had not yet of new jobs.

33. The Italian Government alleges that the Commission's reasoning in respect of the quantification of impermissible aid is illogi- cal and that there are no clear criteria for assessing the methods of promoting and supporting employment, since, unless it is concerned with one of the restrictively defined sets of circumstances, it refuses to describe the training and work experience contracts as a measure intended to create new jobs. However, in Paragraph 86 of the Decision, it is conceded that the condition attached to employment on training and work experience contracts, that a firm must 31. The Commission has adhered to the retain in employment at least 60% of Guidelines on aid to employment when workers whose training and work experi- assessing the compatibility of the Italian aid ence contracts expired in the preceding 24 scheme with the common market and has months, 22is a further incentive to firms to not, therefore, infringed the law. The maintain the jobs for longer. They are a statement of reasons in the Decision is not particularly effective series of advantages, inadequate, since the reasons for the state- because they prevent firms from abusing ment made in Paragraph 92 in respect of the system by systematically providing compatible aid are given in Paragraphs 86 employment under fixed-term contracts to 91. Nor has Italy adduced any evidence to show that, when the Commission deter- mined the circumstances in which the 22 — All the language versions of the Decision which I have used, including the copy notified to the Italian authorities amount of the aid is proportionate to job at the appropriate time, which has been enclosed with the creation, it was pursuing aims other than application, give this percentage as 50%. In its application, the Italian Republic states that the percentage is 60%. I those it was required to pursue when have also ascertained that this is the percentage established by Article 16(11) of Decree-Law No 299 of 16 May 1994, examining State aid. published in GURI No 116 of 20 May 1994.

Following these criteria, the Commission 34. The Commission states that the dis- took the view, in Paragraphs 93 to 96, that puted recruitment constitutes aid for main- aid for employment, where it is not taining employment when there is no intended to be for the benefit of persons creation of new jobs in the recipient firm under 25, graduates under 29 or persons for workers who have not yet found their who have been without employment for first job or who have lost the job they had, more than one year, or for the creation of or when the persons taken on are not new jobs, is aid to maintain jobs, which is workers experiencing particular difficulty treated as similar to operating aid. In this in entering or re-entering the labour mar- connection, the Commission argues that, ket. That aid to maintaining employment is although the aid is granted to firms to not restricted to the areas eligible for enable them to take on workers under exemption under Article 87(3)(a) refers, training and work experience contracts, not since it applies to the country as a whole to prevent them from dismissing workers, and is neither degressive nor limited in the fact is that the aid is not subject to the time. requirement that new jobs are created but only that there are no redundancies.

35. I am unable to agree with the applicant. In fact, the Guidelines on aid to employ- ment distinguish between aid to maintain 36. However, such aid can be authorised jobs, which is given to a firm to persuade it only if, under Article 87(2)(b) EC, it is not to lay off its workers and is calculated intended to make good the damage caused on the basis of the total number of by natural disasters or exceptional occur- employees at the time it is granted, and rences. Under certain conditions, aid to aid to provide a job for those who have maintain jobs may be authorised in regions never had one or who have lost the job they q u a l i f y i n g for e x e m p t i o n u n d e r

D — Fourth plea: infringement of the law, misuse of powers and inadequate statement of reasons in relation to the measures under Article 15 of Law No 196/97

41. Here too, I disagree with the view of the Italian Government, for several reasons. First, the Commission has not infringed the 39. Under this provision, firms in Objective law by considering that only conversions of 1 areas which convert training and work fixed-term contracts into open-ended

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contracts which observe the requirement to clusion, the Commission was pursuing aims increase the number of jobs in the firm other than those which corresponded to it comply with the stipulations laid down in in respect of State aid under the Treaty. the Guidelines. Although the conversion is of great advantage to the worker and to the stability of employment in general, the fact is that the provision extends by one year the advantages already enjoyed by the employer during the two-year term of the contract, and acquiring those additional benefits is not conditional on creating a 42. For the reasons stated, the plea is new job. unfounded and must be rejected.

employment are granted only in areas with In the case of Italy, it was only necessary to severe underemployment. 23 consider whether it was possible to apply the exemption provided in Article 87(3)(a), which establishes that aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment may be declared compatible. According to the case-law of the Court of Justice, the use of the words 'abnormally' and 'serious' in 44. The Commission reiterates that the aid the exemption contained in Article 87(3)(a) examined in the Decision is incompatible shows that it concerns only areas where the with the common market, since it was not economic situation is extremely unfavour- restricted to the areas exempted under able in relation to the Community as a Article 87(3)(a) EC but applied to the whole. 24 country as a whole, it was neither progress- ively reduced nor limited in time, and it did not comply with the requirements laid down in the Guidelines on aid to employ- ment.

It is stated in Paragraph 3.5 of the Guide- lines on national regional aid 25that these conditions are fulfilled if the region, being a geographical unit at level II of the Nomen- clature of Statistical Territorial Units, has a per capita gross domestic product, meas- ured in purchasing power standards, of less 45. I do not agree with the Italian Govern- than 75.0% of the Community average. ment that the Commission has misapplied Furthermore, Paragraph 4.17 of the Guide- Article 87 EC. The circumstances in which lines establishes that operating aid must be aid to maintain employment may be auth- both limited in time and progressively orised are stated, in full detail, in reduced. Paragraph 22 of the Guidelines on aid to employment, and are those referred to in Article 87(2)(b) and (3)(a) EC.

age, it is clear that it was not restricted to not aid, within the meaning of Article 87(1) areas which may benefit from the exemp- EC, but a general measure. However, the tion in Article 87(3)(a). Nor was it limited laws adopted after 1990 varied the reduc- in time or progressively reduced. tions according to the location of the recipient firm and the sector to which it belonged. This meant that some firms received greater reductions than those granted to their competitors. These selec- tive reductions, whether the selectivity 46. I think that, in the light of the argu- operates at individual, regional or sectoral ments put forward in Paragraphs 93 to 96 level, constitute, for the differential part of of the contested Decision, the statement of the reduction, State aid within the meaning reasons provided by the Commission in of Article 87(1) EC, which distorts compe- relation to its assessment of the compati- tition and may affect trade between bility with the common market of the aid to Member States. maintain employment granted under Italian law, is adequate.

47. I consider, therefore that this plea also should be rejected as unfounded. The Commission adds that this aid distorts competition in so far as it strengthens the financial position and opportunities of the recipient firms in relation to competitors who do not receive the aid, and affects intra-Community trade where the recipient firms export some of their products to F — Sixth plea: infringement of Article 87 other Member States; equally, even where EC and inadequate statement of reasons in such firms do not export their goods, relation to the effect of the aid deemed national production is favoured because incompatible on trade within the Commu- firms established in other Member States nity and on competition have less chance of exporting their products to the Italian market.

ures under examination are normally pro- parties should express their views on two hibited under Article 87(1) of the EC questions: (1) whether the reduction in Treaty and Article 62(1) of the EEA Agree- social security contributions granted to ment and may be deemed compatible with firms outside the production sector affects the common market only if they qualify for trade between the Member States within one of the derogations provided for by the meaning of Article 87(1) EC; and (2) those instruments; and (2) the aid scheme whether, in this connection, adequate rea- should have been notified to the Commis- sons were stated in the contested Decision. sion at the draft stage in accordance with Article 88(3). In the absence of such notification, the aid is unlawful under Community law, and may be considered compatible with the common market only if it qualifies for exemption under the Treaty. 52. The representative of the Italian Gov- ernment pointed out that the contested Decision does not examine the real and specific effect of the aid on trade between Member States. In his view, the reduction in social security contributions granted to small firms, situated in southern Italy, which are service-providers, distribution 50. The Italian Government acknowledges or craft companies, has no effect on that that this is so but considers that, in the light trade. He added that it would be very of the special features of the Italian scheme unfair for those companies, which took on of aid to employment, the Commission workers under training and work experi- should have given some justification, even ence contracts, believing the reduction in if only a few words, for the effect on trade contributions to be lawful, to be asked now and the mere possibility of a distortion of to repay to the State the amount of the competition; these are circumstances which reduction. are not clear, if it is considered that there are factors such as the limited nature of the aid once some of the compatible com- ponents have been eliminated, and such as the fact that the part deemed incompatible is intended for small and medium-sized firms with fewer than 15 workers, craft firms or firms situated in areas of recession. 53. The Commission stated that the Court of Justice has consistently held that, in the case of an aid programme, the Commission may confine itself to examining the char- acteristics of the programme in question in order to determine whether, by reason of the amounts or high percentages of aid, the nature of the investments for which aid is granted or other terms of the programme, it 51. The Court of Justice requested that, at gives an appreciable advantage to recipi- the hearing held on 4 April 2001, the ents in relation to their competitors and is

54. I still cannot agree with the Italian Government. The effect of the aid on trade 56. For these reasons, I believe that this 26 — Germany v Commission, cited in footnote 24 above, plea is unfounded and should be rejected paragraph 18. also. 27 — Judgments in Case C-142/87 Belgium v Commission ('Tubemeuse') [1990] ECR I-959, paragraph 43; Joined Cases C-278/92, C-279/92 and C-280/92 Spain v Com- mission [1994] ECR I-4103, paragraphs 40 to 42; and Germany v Commission, cited in footnote 9 above, 28 — Case C-301/87 France v Commission [1990] ECR I-307, paragraph 32. paragraph 33.

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5 8 . The Commission explains that Article 87 EC is not applicable to measures covered by the de minimis rule, according There are three conditions for application to which the total amount of the measures of the rule: (1) the total maximum amount adopted in favour of firms which have must not exceed EUR 100 000 over a concluded training and work experience three-year period; (2) that amount will contracts or have converted them into include all public assistance considered to open-ended contracts may not exceed be de minimis aid, and the recipient must EUR 100 000 within a three-year period. be able to obtain other aid under schemes The de minimis rule cannot justify the other approved by the Commission; and (3) that measures. amount must apply to aid of all kinds, irrespective of the form it takes or the objective pursued, with the exception of export aid.

29 — OJ 1996 C 68, p. 9. The Commission has recently adopted 59. The Italian Government misinterprets Regulation (EC) No 69/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to de the rule. In its Notice on the de minimis minimis aid, OJ 2001 L 10, p. 30.

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H — Eighth plea: in the alternative, inad- equate statement of reasons as regards the necessity, or at least the appropriateness of, effecting recovery of the aid declared incompatible

63. The Commission states that, pursuant to its Notice of 24 November 1983, 30 where aid which is incompatible with the common market has been granted unlaw- 62. The applicant considers that there are fully, it always requires the Member State circumstances which justify foregoing the return of the unpaid social security con- tributions. It argues, first, that the aid 30 — OJ 1983 C 318, p. 3.

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to seek repayment from the recipients, in ful. Consequently, such recovery cannot be order to restore the situation prevailing regarded as disproportionate to the objec- before the aid which has distorted compe- tives of the Treaty in regard to State aid. 33 tition and affected trade was granted.

33 — Belgium v Commission, cited in footnote 27 above, 31 — Case 310/85 Deufil v Commission [1987] ECR 901, paragraph 66. paragraph 24. 34 — Spain v Commission, cited in footnote 27 above, 32 —Case 70/72 Commission v Germany [1973] ECR 813, paragraph 78, and Case C-75/97 Belgium v Commission paragraph 13. [1999] ECR I-3671, paragraph 82.

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valid objection to recovery of the aid proposals for suitable amendments to the because, in its Notice of 1983, the Com- decision in question. In such cases, the mission informed potential recipients of Commission and the Member State must, State aid that aid granted unlawfully was by virtue of the rule in Article 10 EC, unreliable, since they might be asked to which imposes on each of them a duty of return it. genuine cooperation, work together in good faith with a view to overcoming the difficulties whilst fully observing the Treaty provisions and, in particular, the provisions on aid. 36

Furthermore, under Article 14(1) of Regu- lation (EC) No 659/99, 35 where negative decisions are taken in cases of unlawful aid, the Commission is to decide that the 69. I consider, therefore, that this plea too Member State concerned shall take all is unfounded and should be rejected. necessary measures to recover the aid from the beneficiary. The Commission is not to require recovery of the aid if this would be contrary to a general principle of Commu- nity law.

V — Costs

(2) order the applicant to pay the costs.

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