Case T-25/07

Iride SpA and Iride Energia SpA

v

Commission of the European Communities

(State aid – Energy sector – Compensation for irrecoverable costs – Decision declaring aid compatible with the common market – Obligation for the recipient undertaking first to repay earlier aid declared unlawful – State resources – Advantage – Duty to state reasons)

Summary of the Judgment

1.      State aid – Definition – Aid from State resources

(Art. 87(1) EC)

2.      State aid – Definition – Assessment under the normal market conditions criterion

(Art. 87(1) EC; European Parliament and Council Directive 96/92)

3.      Acts of the institutions – Statement of reasons – Obligation – Scope – Commission decision on State aid

(Arts 87(1) EC and 253 EC)

4.      State aid – Prohibition – Exceptions – Commission discretion – Commission decision making the authorisation of payment of aid conditional on prior repayment by the undertaking concerned of unlawful aid received earlier

(Arts 87(3) EC and 88(2) EC)

5.      State aid – Administrative procedure – Compatibility of the aid with the common market – Burden of proof on the party granting aid and on the potential recipient of aid

(Arts 87(3) EC and 88(2) EC)

1.      Only advantages granted directly or indirectly through State resources are to be treated as aid within the meaning of Article 87(1) EC. The distinction made in that provision between ‘aid granted by a Member State’ and aid granted ‘through State resources’ does not signify that all advantages granted by a Member State – whether financed through State resources or not – constitute aid, but is intended merely to bring within that definition both advantages which are granted directly by the State and those granted by a public or private body designated or established by the State. In addition, Article 87(1) EC covers all the financial means by which the public authorities may actually support undertakings, irrespective of whether or not those means are permanent assets of the public sector. Consequently, even though the sums involved in the measure at issue are not held permanently by the public authorities, the fact that they remain constantly under public control, and therefore available to the competent national authorities, is sufficient for them to be categorised as State resources.

In that regard, concerning compensation granted to energy distributors or producers from a special account administered by a public body and funded by the revenue from the application of a specified component of the electricity tariff, charged to all final customers, the sums redistributed to the recipient must be categorised as State resources, not only because they are under constant State control, but also because they are State property before being redistributed to the recipient.

(see paras 23, 25, 27-28)

2.      In order to determine whether a State measure constitutes State aid, it is necessary to establish whether the recipient undertaking receives an economic advantage which it would not have obtained under normal market conditions. With regard to the question whether, in the context of liberalisation of the market in electricity production, legislative changes are among the developments which are only to be expected by economic operators in normal market conditions, it must be held that in a democratic State, as in a market economy, the legislative framework can be changed at any time. Given the general orientation of European Community economic policy towards the opening-up of national markets and the favouring of trade between Member States, that is all the more so where the former legislative framework provided for the partitioning of a market along national and/or regional lines, so that monopoly situations arose. It follows that the opening-up of a previously partitioned market cannot be regarded as anomalous in relation to normal market conditions. The alteration of the legislative framework in the electricity sector which occurred as a result of Directive 96/92 concerning common rules for the internal market in electricity is therefore part of normal market conditions.

(see paras 46, 48, 50-51)

3.      The statement of reasons for a measure must be appropriate to that measure and must disclose clearly the reasoning followed by the institution which adopted it, in such a way as to enable the persons concerned to understand the basis for it and the court to review the justification for it, without being required to go into all the relevant facts and points of law, since the question of compliance with Article 253 EC is assessed by taking the wording of that measure into account as much as its legal and factual context.

Concerning a State aid decision, in which the Commission restricts itself to stating only that ‘the measure under assessment should be considered State aid’, the Commission complies with its obligation to state reasons where the legal and factual context of that decision includes, apart from the decision to initiate the State aid assessment procedure, a decision concerning similar measures, to which express reference is made in the decision to initiate the procedure and in that decision and which itself contains a detailed statement of the reasons for which the Commission considered that the measures which were the subject of that decision constituted State aid.

(see paras 66-67, 70-71)

4.      With regard to the assessment of the compatibility of aid with the common market under Article 87(3) EC, the Commission enjoys a wide discretion, the exercise of which involves assessments of an economic and social nature which must be made within a Community context. Where the Commission examines the compatibility of State aid with the common market, it must take all the relevant factors into account, including, where relevant, the circumstances already considered in a prior decision and the obligations which that decision may have imposed on a Member State. Therefore, the Commission does not exceed the limits of its discretion when, in the case of aid which a Member State proposes to grant to an undertaking, it takes a decision declaring that aid to be compatible with the common market, but subject to the condition of prior repayment by the undertaking of unlawful aid received earlier, by reason of the cumulative effect of the aid in question. The only addressees of Commission decisions in the State aid field are the Member States concerned. Consequently, when the Commission takes all the relevant factors into account, it examines only the obligations which such a decision imposes on the Member State concerned, not obligations which that decision might entail for the recipient undertaking.

With regard to a State aid scheme, the lack of precise information from the Commission, as regards the undertakings which benefit from an unlawful scheme and the precise sums they have received, does not affect the validity of an order for recovery or constitute an obstacle to its execution since, on the one hand, the Member State concerned is the entity best placed to obtain that information and, on the other hand, the Commission is entitled, in the absence of cooperation from the Member State concerned, to take a decision on the basis of the information available to it.

(see paras 82-83, 85, 89)

5.      Since the decision to initiate the procedure provided for in Article 88(2) EC contains an adequate preliminary analysis by the Commission, setting out the reasons for its doubts regarding the compatibility of the aid in question with the common market, it is for the Member State concerned and the potential recipient of the aid to adduce evidence to show that the aid is compatible with the common market and, if necessary, to plead specific circumstances relating to recovery of aid already paid, should the Commission require its repayment.

The obligation on the Member State, and on the undertaking that is the potential recipient of new aid, to provide the Commission with information to show that the aid is compatible with the common market, also entails the need to show that there is no cumulative effect of the new aid and earlier unlawful aid that was incompatible with the common market and that has not been repaid. In that regard, the criterion that there must be no cumulative effect of the new aid under consideration and earlier unlawful and incompatible aid that has not been repaid falls within the scope of the general examination of the compatibility of aid which the Commission must undertake, and is therefore merely one of the factors to be taken into consideration by the Commission when it applies Article 87(3) EC.

(see paras 101, 103-104)