Cases T-29/10 and T-33/10

Kingdom of the Netherlands and ING Groep NV

v

European Commission

(State aid — Financial sector — Aid designed to remedy a serious disturbance in the economy of a Member State — Capital injection with repayment or share conversion options conferred on the aid recipient — Amendment to the repayment terms during the administrative procedure — Decision declaring the aid compatible with the common market — Concept of State aid — Advantage — Private investor test — Necessary and proportionate relationship between the amount of aid and the extent of measures intended to ensure compatibility of the aid)

Summary of the Judgment

1.      State aid — Concept — Assessment according to the private investor test

(Art. 87(1) EC)

2.      State aid — Concept — Legal nature — Interpretation on the basis of objective factors — Judicial review — Scope

(Art. 87(1) EC)

3.      Union law — Interpretation — Acts of the institutions — Statement of reasons — To be taken into consideration

1.      In order to determine an ‘advantage’ within the meaning of Article 87(1) EC in the case of a capital injection, it must be assessed whether, in similar circumstances, a private investor of a dimension comparable to that of a public authority could have been prevailed upon to make capital contributions of the same size, having regard in particular to the information available and foreseeable developments at the date of those contributions. In order to examine whether or not the State has adopted the conduct of a prudent investor operating in a market economy, it is necessary to place oneself in the context of the period during which the financial support measures were taken and to refrain from any assessment based on a later situation.

Such principles apply on the assumption that, having decided to subscribe to capital issued by an undertaking subject to certain repayment terms, the State agrees to amend those terms. In such circumstances, State aid may have been granted both on the making of the capital contribution and on the amendment to the repayment terms.

As regards the Commission’s analysis of the economic rationality of the behaviour of the State, the Commission cannot evade its obligation to assess the economic rationality of the amendment to the repayment terms in the light of the private investor principle solely on the ground that the capital injection subject to repayment already itself constitutes State aid. It is only after such an assessment, an assessment which presupposed in particular a comparison of the initial repayment terms with the amended terms, that the Commission is in a position to conclude whether an additional advantage within the meaning of Article 87(1) EC has been granted.

For the purposes of that examination, the Commission was bound to take into account all the relevant information and, in particular, that concerning the initial repayment terms and the amended terms. In that context, an approach, which limits itself to finding that the amendment to the capital injection repayment terms constituted State aid without first examining whether the amendment conferred an advantage to which a private investor placed in the same situation as the State would not have agreed, cannot suffice for the classification as aid pursuant to Article 87(1) EC. Such an approach cannot completely disregard both the option — and not the right — of the State to be repaid on the basis of the initial terms, and the economic rationality which may explain the amendment that was made.

Consequently, the Commission misinterpreted the concept of aid by not assessing whether, by accepting the amendment to the repayment terms, the State acted as a private investor would have done in a similar situation, inter alia because the State could have been repaid early and because when the amendment occurred it obtained a greater certainty of being repaid in a satisfactory manner taking the existing market conditions into account.

(see paras 97-99, 110-111, 118, 125)

2.      The concept of State aid is a legal concept which must be interpreted on the basis of objective factors. For that reason, the European Union judicature must in principle, having regard both to the specific features of the case before them and to the technical or complex nature of the Commission’s assessments, carry out a comprehensive review as to whether a measure falls within the scope of Article 87(1) EC. However, judicial review is limited with regard to whether a measure comes within the scope of Article 87(1) EC, where the appraisals by the Commission are technical or complex in nature. It is however for the Court to decide whether that is the case.

The question whether the amendment to the capital injection repayment terms constitutes State aid, in so far as it grants an advantage to the recipient, is thus subject, in principle, to comprehensive review by the Court. Assuming however that the Court were to take the view that the identification of the aid called for a complex economic assessment by the Commission, in particular regarding the question whether, by accepting the amendment to the repayment terms, the State acted as a prudent private investor of a comparable dimension would be likely to have acted, such a question is subject to limited review.

Thus, to assess the lawfulness of a Commission decision concerning State aid, it is necessary to take into account the information at the Commission’s disposal or available to it on the date on which it adopted that decision. In that regard, if it should prove to be the case that the Commission’s assessment is contradicted or placed in doubt by information of which it was unaware during the administrative procedure, it must be established whether such information could have been known to and taken into consideration by it at the appropriate time and, if that were the case, whether that information should as a matter of course have been considered by the Commission, at least as relevant data in order to apply the private investor test.

(see paras 100-101, 105-106)

3.      The operative part of an act is indissociably linked to the statement of reasons for it, so that, when it has to be interpreted, account must be taken of the reasons which led to its adoption. Although only the operative part of a decision is capable of producing legal effects, the fact remains that the assessments made in the grounds of a decision can be subject to judicial review by the judicature of the European Union to the extent that, as grounds of a measure adversely affecting the interests of those concerned, they constitute the essential basis for the operative part of that measure or if those grounds are likely to alter the substance of what was decided in the operative part.

Consequently if, in a decision concerning State aid, the Commission unlawfully classifies a measure under assessment as aid, that illegality inevitably affects the finding of compatibility of the aid in the light of which a certain level of commitments was fixed with regard to the minimum aid amount calculated.

(see paras 146, 156, 160)