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2. Recovery shall be effected in accordance 5. By letter of 24 March 2000, the Com- with the procedures of national law. The mission requested the Spanish Government aid to be recovered shall bear interest from to inform it what measures had been taken the date on which it was made available to to comply with the 1999 decision. By letter the recipient until recovery. Interest shall be of 25 April 2000, the Spanish Government calculated on the basis of the reference rate replied that the Abogacía del Estado had in used for calculating the grant equivalent of the meantime submitted its report and that regional aids. it was still awaiting the reports which it had requested from the Ministry of Economy and Finance and the Council of State.

Article 3 6. By letter of 23 May 2000, the Commis- sion again asked the Spanish Government for clarification regarding the steps which had been taken in the meantime to imple- ment the 1999 decision. In its response of 14 June 2000, the Spanish Government merely requested a new time-limit for Spain shall inform the Commission, within notifying its implementation of the two months following notification of this decision. It justified such a delay on the Decision, of the measures taken to comply ground that the public administration had with it.' recently been restructured. By letter of 22 June 2000, the Commission refused to grant that request. By application of 25 October 2000, received at the Court Registry on 7 December 2000, it brought this action against the Kingdom of Spain.

4. The 1999 decision was notified to the Spanish Government by letter of 2 December 1999. The Spanish Govern- ment acknowledged receipt of the decision by letter of 31 January 2000. In that letter it also informed the Commission that it had entered into consultations with the Aboga- II — Assessment cía del Estado (Spanish legal service) and the Ministry of Economy and Finance in order to secure the repayment of the aid declared incompatible. Finally, it announced its intention of bringing an action for the annulment of the 1999 7. The Commission's arguments in support decision. That action is the subject matter of its application are concise. It submits of the abovementioned Case C-36/00. that although the Spanish Government did

10. Finally, the Commission points out that the Spanish Government had indisputably still taken no implementing measures at the time when the 1999 decision should have been implemented, that is to say, two 8. The Commission is of the opinion that, months after its notification to the Spanish in the light of the Court's case-law on this Government on 2 December 1999. Nor did point, the Spanish Government cannot the Spanish Government implement the plead that it was absolutely impossible for decision within the additional period of it to implement the decision. The reason 20 working days, which the Commission given by the Spanish Government in its had allowed it by letter of 24 March 2000. letter of 25 April 2000, namely that there was legal uncertainty as to the deductibility of the taxes which had been paid on the amounts which the shipyards concerned were required to repay pursuant to the 1999 decision, does not, according to the 11. The Spanish Government puts forward Commission, constitute absolute impossi- two arguments which, in its view, show bility of implementation. There is nothing that the Commission's application should to prevent the recovery of those amounts, be dismissed. after adjustment by the amount of the taxes paid thereon, provided that, in the light of the opinion on the matter yet to be delivered by the Council of State, that adjustment can still be reversed.

12. First, it is of the opinion that the Commission did not allow a reasonable period of time to elapse before coming to the conclusion that Spain had failed to fulfil its obligation to implement the 1999 decision, with all the consequences which flowed from that. It refers in this connec- 9. Nor does the Commission consider the tion to the approach adopted by the Com- restructuring of the public administration a mission towards Italy in the circumstances valid argument for delaying the recovery of which gave rise to the Court's judgments in the aid wrongly paid. Organisational Case C-350/93 Commission v Italy [1995] changes do not as such constitute 'absolute ECR I-699 and Case C-280/95 Commis- impossibility' within the meaning of the sion v Italy [1998] ECR I-259. In those

cases, four and two years respectively had brought, since it had taken all the measures elapsed following notification of the rel- necessary to implement the decision in evant decisions ordering the recovery of accordance with national law. It explains illegally granted aid. this argument by stating that the status of the aid to be recovered was not clear under national law. The Ministry of Economic Affairs and Finance first had to provide advice on the matter. It then had to be established whether it was necessary to recover the overpaid aid by recourse to administrative tribunals or to civil courts. On this point, according to the report of 13. In the present case, by contrast, the the Abogacía del Estado, it was necessary Commission let only a few months elapse to consult the Council of State. The Spanish before bringing infringement proceedings. Government explained this to the Commis- In the Spanish Government's opinion, such sion in its letter of 25 April 2000. The latter inequality of treatment is all the more did not comment on the preference, flagrant since, in contrast to the circum- expressed by the Spanish Government, for stances of Case C-280/95, the Commission following the correct procedures under gave no advance warning whatsoever, national law, but merely granted Spain an during the period for which the aid was extra period of 20 days before bringing guaranteed, that the special fiscal aid, infringement proceedings. which it finds illegal in the 1999 decision, would encounter objections. It was only after the completion of the whole process of granting the aid and of the shipyard restructuring to which it was linked that the Commission made known its objec- tions. The Spanish Government refers in this connection to its arguments in Case C-36/00. It concludes that the Commission brought the present infringement proceed- ings after an unusually and unreasonably short time. The Spanish authorities were not even given time to seek the necessary 15. In assessing the Commission's appli- legal advice on implementing the decision, cation, I shall confine myself exclusively to or to assess the social consequences thereof. the subject-matter thereof, namely the claim that the Spanish Government failed to implement the 1999 decision by not taking, or not taking in time, the measures necessary to recover the aid wrongly paid to the shipyards concerned. I expressly leave aside here the issues connected with the action brought by the Spanish Govern- ment in Case C-36/00 for the annulment of 14. Second, the Spanish Government dis- the 1999 decision. On those matters, I refer putes the claim that it was in breach of its to my Opinion of 11 October 2001 in the obligations at the time the action was abovementioned case.

17. According to the settled case-law of the Court of Justice and the Court of First Instance, the intention in imposing the obligation to recover illegally granted aid is to restore the situation which existed before the illegally granted aid was paid. Put in more economic terms, that means rectifying the distortion of the conditions of competition brought about by the illegal intervention of the authorities. That con- cern also underlies the strict requirements which the Court attaches to the duty of compliance incumbent on Member States 19. Examined in the light of that criterion, with regard to the recovery of wrongly the Spanish Government's first ground of granted aid. The only ground of defence defence, namely that in this case, in accepted by the Court is the absolute comparison with the approach adopted by impossibility of implementing the decision it in other cases, the Commission acted properly. 3 with unusual and unreasonable speed in bringing infringement proceedings, cannot be accepted. By its very nature, such a 3 — Case 52/84 Commission v Belgium [1986] ECR 89, para- defence cannot establish that timely imple- graph 14, Case 94/87 Commission v Germany [1989] ECR 175, paragraph 8, Case C-183/91 Commission v Greece mentation of the 1999 decision was abso- [1993] ECR I-3131, paragraph 10, and Case C-280/95 Commission v Italy, cited in point 12 of this Opinion, lutely impossible. For that reason alone it paragraph 13. must be rejected. I - 6702

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21. Finally, the Spanish Government also 24. The Court has systematically rejected brings forward in support of that ground of reliance on alleged absolute impossibility defence arguments based on the Commis- where the Member State concerned merely sion's acts or omissions in its monitoring of informed the Commission of the political the implementation of the restructuring of and legal difficulties involved in imple- the Spanish publicly-owned shipyards and menting the decision, without first taking the public financing thereof. Those argu- any specific steps, of whatever nature, ments were put forward in Case C-36/00 in vis-à-vis the undertakings concerned, to order to contest the validity of the 1999 recover the aid, and without putting for- decision. In this case, where the issue is ward to the Commission any suggestions as to how the problems which have arisen might be resolved. Consequently, any plea 4 — This principle was formulated as early as 1976 in Case of absolute impossibility of timely imple- 52/75 Commission v Italy [1976] ECR 227, then reiterated mentation cannot be based on a mere inter alia in Case 325/82 Commission v Germany [1984] ECR 777. assumption that problems exist. On the

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5 — See point 13 of the Opinion in the case cited above in 30. I observe for the sake of completeness point 12 of this Opinion. that it is not apparent from the documents I - 6704

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before the Court that the Spanish Govern- sion, to reach an acceptable solution for the ment took any further steps to implement elimination as such of the competitive the decision before the Commission advantage which the shipyards concerned brought the present proceedings by appli- still enjoy as a result of the aid declared cation of 25 October 2000. The defence illegal. lodged by the Spanish Government consists of a list of the legal problems and com- plications which implementation of the decision would entail under Spanish law. However, it does not mention any judicial 31. In its application, the Commission also or extrajudicial steps which it took vis-à-vis applies for Spain to be ordered to pay the the undertakings concerned. Nor does it costs. Since the Commission's action is well show that the Spanish Government made founded, that application should be any attempt after June 2000, in consul- granted, in accordance with Article 69 of tation and cooperation with the Commis- the Rules of Procedure.

I I I— Conclusion

32. For the reasons set out above, I propose that the Court should:

(1) declare that, by not taking within the prescribed time the measures necessary to implement the Commission Decision 2000/131 of 26 October 1999 declaring certain aid measures in favour of the group of Spanish publicly- owned shipyards illegal and incompatible with the common market, the Kingdom of Spain has failed to fulfil its obligations under the fourth paragraph of Article 249 EC and Articles 2 and 3 of that decision;