Case T‑628/20
Ryanair DAC
v
European Commission
Judgment of the General Court (Tenth Chamber, Extended Composition), 19 May 2021
(State aid – Spain – Recapitalisation measures to support undertakings that are systemic and strategic for the Spanish economy in response to the COVID-19 pandemic – Decision not to raise any objections – Temporary Framework for State aid – Measure aimed at remedying a serious disturbance in the economy of a Member State – Measure aimed at the whole of the economy of a Member State – Principle of non-discrimination – Freedom to provide services and freedom of establishment – Proportionality – Criterion requiring that the beneficiaries of the aid are established in Spain – Failure to weigh the beneficial effects of the aid against its adverse effects on trading conditions and the maintenance of undistorted competition – Article 107(3)(b) TFEU – Concept of ‘aid scheme’ – Obligation to state reasons)
1. State aid – Prohibition – Exceptions – Aid capable of being regarded as compatible with the internal market – Aid to remedy serious disturbance in the economy of a Member State – Aid scheme establishing a solvency support fund for undertakings that are strategic for the Spanish economy in response to the COVID-19 pandemic – Financing granted only to non-financial undertakings established in Spain – Aid compatible with the internal market under Article 107(3)(b) TFEU – Infringement of the principle of non-discrimination on grounds of nationality – None
(Arts 18, first para., and 107(3)(b) TFEU)
(see paragraphs 25-27, 51)
2. State aid – Prohibition – Exceptions – Aid capable of being regarded as compatible with the internal market – Aid to remedy serious disturbance in the economy of a Member State – Aid scheme establishing a solvency support fund for undertakings that are strategic for the Spanish economy in response to the COVID-19 pandemic – Financing granted only to non-financial undertakings established in Spain – Assessment of the compatibility with the internal market – Criteria – Objective of the aid scheme – Necessity of the aid – Proportionality of the aid
(Art. 107(3)(b) TFEU)
(see paragraphs 28-52)
3. Freedom to provide services – Provisions of the Treaty – Scope – Services in the transport sector within the meaning of Article 58(1) TFEU – Air transport services – Specific legal regime
(Arts 56, 58(1) and 100(2) TFEU)
(see paragraphs 59, 60)
4. State aid – Prohibition – Exceptions – Aid capable of being regarded as compatible with the internal market – Assessment in the light of Article 107(3)(b) TFEU – Criteria – Weighing the beneficial effects of the aid against its adverse effects on trading conditions and the maintenance of undistorted competition – Not a necessary criterion
(Art. 107(3)(b) TFEU)
(see paragraphs 66-70)
5. State aid – Examination by the Commission – Aid scheme – Concept – Criteria for assessment – Legal provisions laying down recapitalisation measures for systemic and strategic undertakings for the national economy – No further national implementing measures – General and abstract definition of the beneficiaries of the aid – Conditions – Evidence of the definition of the essential elements of the scheme in the acts identified as the basis of that scheme
(Arts 107(1) and 108(1) and (3) TFEU; Council Regulation 2015/1589, Art. 1(d))
(see paragraphs 75-94)
6. Action for annulment – Natural or legal persons – Measures of direct and individual concern to them – Commission decision finding State aid compatible with the internal market without opening the formal investigation procedure – Action by interested parties within the meaning of Article 108(2) TFEU – Identification of the subject matter of the action – Action designed to safeguard the procedural rights of the persons concerned – Pleas capable of being invoked – Lack of independent content of such a plea in the present case
(Arts 108(2) and 263, fourth para., TFEU)
(see paragraphs 112-114)
7. State aid – Commission decision not to raise objections to an aid scheme – Obligation to state reasons – Scope – Account taken of the context and all the legal rules governing the matter
(Arts 107(3)(b) and 296 TFEU)
(see paragraphs 117-124)
Résumé
The solvency support fund for strategic Spanish undertakings experiencing temporary difficulties due to the impact of the COVID-19 pandemic is compatible with EU law
The measure at issue, intended for the adoption of recapitalisation measures with a budget of EUR 10 billion, constitutes a State aid scheme but is proportionate and non-discriminatory
In July 2020, Spain notified the European Commission of an aid scheme to establish a solvency support fund for strategic Spanish undertakings which are experiencing temporary difficulties due to the impact of the COVID-19 pandemic. That support fund is authorised to adopt various recapitalisation measures in favour of non-financial undertakings that are established in Spain and have their principal places of business there, which are considered systemic or strategic for the Spanish economy. (1) The budget for that aid scheme, financed by the State budget, was fixed at EUR 10 billion until 30 June 2021.
Taking the view that the notified scheme constituted State aid within the meaning of Article 107(1) TFEU, the Commission assessed it in the light of its Communication of 19 March 2020, entitled ‘Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak’. (2) By decision of 31 July 2020, the Commission declared the notified scheme compatible with the internal market in accordance with Article 107(3)(b) TFEU. (3) Under that provision, aid to remedy a serious disturbance in the economy of a Member State may, under certain conditions, be considered to be compatible with the internal market.
The airline Ryanair brought an action for annulment of that decision, which is nevertheless dismissed by the Tenth Chamber, Extended Composition, of the General Court of the European Union. In that context, the Court examines the compatibility with the internal market of the State aid scheme adopted to address the consequences of the COVID-19 pandemic in the light of Article 107(3)(b) TFEU. (4) The Court also clarifies the relationship between the rules on State aid and the principle of non-discrimination on grounds of nationality laid down in the first paragraph of Article 18 TFEU and the concept of an ‘aid scheme’ within the meaning of Article 1(d) of Regulation 2015/1589. (5)
Findings of the Court
In the first place, the Court reviews the Commission’s decision in the light of the principle of non-discrimination, by ascertaining whether the difference in treatment introduced by the aid scheme at issue, in that it benefits only undertakings that are established in Spain and have their principal places of business there, is justified by a legitimate aim and whether it is necessary, appropriate and proportionate in order to attain it. The Court also examines the effect of the first paragraph of Article 18 TFEU which prohibits any discrimination on grounds of nationality within the scope of application of the Treaties, and without prejudice to any special provisions contained therein. Since Article 107(3)(b) TFEU is, according to the Court, among the special provisions laid down by the Treaties, the Court examines whether the scheme at issue may be declared compatible with the internal market under that provision.
In that regard, the Court confirms, first, that the objective of the scheme at issue satisfies the conditions laid down in Article 107(3)(b) TFEU in so far as it is seeks to remedy the serious disturbance in the Spanish economy caused by the COVID-19 pandemic. Furthermore, the Court adds that the criterion of the strategic and systemic importance of the beneficiaries of the aid properly reflects the objective of the aid scheme at issue.
The Court also finds that the restriction of the scheme at issue to non-financial undertakings which are of systemic or strategic importance for the Spanish economy, which are established in Spain and have their principal places of business in its territory, is both appropriate and necessary in order to achieve the objective of remedying the serious disturbance in the Spanish economy. According to the Court, both the eligibility criteria for the scheme and the conditions for the grant of aid, consisting of the Spanish State temporarily acquiring an interest in the capital of the undertakings concerned, and the ex post restrictions laid down by that scheme vis-à-vis the beneficiaries of the aid, (6) bear witness to Spain’s willingness to support undertakings which are genuinely and enduringly linked to the Spanish economy. That approach is consistent with the objective of the scheme which is to remedy the serious disturbance in the Spanish economy with a view to the medium- and long-term development of that economy.
As regards the proportionality of the aid scheme, the Court finds that, by laying down conditions for granting the benefit of a general and multisectoral aid scheme without distinction as to the economic sector concerned, Spain could legitimately rely on eligibility criteria designed to identify undertakings which are both systemically or strategically important for its economy and have durable and stable links to it. A different eligibility criterion, including undertakings operating in Spain as mere service providers, could not have ensured the need for a stable and durable link of the beneficiaries of the aid to the Spanish economy, which underlies the aid scheme at issue.
Having regard to those findings, the Court confirms that the objective of the aid scheme at issue satisfies the requirements of the derogation laid down in Article 107(3)(b) TFEU and that the conditions for granting the aid do not go beyond what is necessary to achieve that objective. Thus, that scheme does not infringe the principle of non-discrimination or the first paragraph of Article 18 TFEU.
In the second place, the Court examines the Commission’s decision in the light of the freedom to provide services and the freedom of establishment set out in Article 56 TFEU and Article 49 TFEU respectively. In that regard, the Court points out that the freedom to provide services does not apply as such to the field of transport, which is governed by a special legal regime, to which Regulation No 1008/2008 (7) belongs. The very purpose of that regulation is to define the conditions for the application, in the air transport sector, of the principle of freedom to provide services. That being said, Ryanair had not, in any event, established how being deprived of access to recapitalisation measures covered by the scheme at issue would deter it from establishing itself in Spain or from providing services to and from Spain.
In the third place, the Court rejects the plea according to which the Commission allegedly infringed the obligation to weigh the beneficial effects of the aid against its adverse effects on trading conditions and the maintenance of undistorted competition. In that regard, the Court notes that such a balancing exercise is not required by Article 107(3)(b) TFEU, contrary to what is laid down in Article 107(3)(c) TFEU and that, in the circumstances of the present case, such a balancing exercise would have no raison d’être as its result is presumed to be positive.
In the fourth place, as regards the allegedly incorrect classification of the measure at issue as an ‘aid scheme’, the Court rules that the provisions of Spanish law constituting the legal basis of the measure at issue (8) constitute acts of general application which govern all the characteristics of the aid measure at issue. In fact, those provisions enable, in themselves, without further implementing measures being required, both the individual grant of aid to the undertakings which have applied for it and define, in a general and abstract manner, the beneficiaries of the aid. Consequently, the Court concludes that Commission was able to classify, without committing an error of law, the aid at issue as an aid scheme, pursuant to Article 1(d) of Regulation 2015/1589.
Lastly, the Court rejects as unfounded the pleas alleging an infringement of the obligation to state reasons and finds that there is no need to examine the merits of the plea alleging an infringement of procedural rights under Article 108(2) TFEU.