Case C‑262/11

Kremikovtzi AD

v

Ministar na ikonomikata, energetikata i turizma i zamestnik-ministar na ikonomikata, energetikata i turizma

(Reference for a preliminary ruling
from the Administrativen sad Sofia-grad)

(Accession of the Republic of Bulgaria to the European Union — EC‑Bulgaria Association Agreement — Steel sector — Public aid for reconstruction granted prior to accession — Conditions — Viability of the recipients at the end of the restructuring period — Declaration of insolvency of a recipient following accession — Respective powers of the national authorities and the European Commission — National decision finding the existence of a public debt in the form of aid which has become unlawful — Decision EU‑BG No 3/2006 — Annex V to the Act of Accession — Aid applicable following accession — Council Regulation (EC) No 659/1999 — Existing aid)

Summary — Judgment of the Court (Second Chamber), 29 November 2012

1.        State aid — Existing aid and new aid — Accession of Bulgaria to the European Union — Distinction according to the specific rules laid down in Annex V to the Act of Accession — Measures implemented prior to accession in Bulgaria as part of the restructuring plan for the steel sector in Bulgaria — Legal basis in the event of the recovery of that aid

(Arts 87(1) EC and 88(1) and (3) EC; Act of Accession 2005, Annex V; Additional Protocol to the EC-Bulgaria Association Agreement)

2.        State aid — Provisions of the Treaty — Scope ratione temporis — Accession of Bulgaria to the European Union — Act of Accession — Application of the provisions relating to State aid from the date of accession and then only in respect of situations arising on or after that date

(Arts 87 EC and 88 EC; Act of Accession 2005; Council Regulation No 659/1999, Art. 1(b)(i) and (c))

1.        As regards aid implemented in Bulgaria before it acceded to the European Union, Title 2 of Annex V to the 2005 Act of Accession provides for a monitoring mechanism. That mechanism aims inter alia to limit the range of aid measures which could be regarded as ‘existing aid’ at the time of accession for the purposes of Article 88(1) EC. Under that mechanism, measures implemented before accession but which, firstly, are still applicable post-accession and, secondly, satisfy the cumulative requirements of Article 87(1) EC on the date of accession, are subject to the specific rules laid down in Annex V to the Act of Accession, either as existing aid for the purposes of Article 88(1) EC when it comes within one of the three categories referred to in that annex, or as new aid on the date of accession for the purposes of application of Article 88(3) EC where it does not come within one of those three categories.

It follows that, in order to be capable of falling under the specific rules in Annex V to the Act of Accession, measures of State support adopted before the date of accession must, in particular, still be ‘applicable’ for the purposes of that annex as from the date of accession. In that light, the expression ‘still applicable’ in Annex V to the Act of Accession must be construed as relating, essentially, to measures implemented before accession to the European Union and which, following accession, remain such as to give rise to expenditure by the Member State concerned or an increase in its financial liability, or to decrease that Member State’s budgetary revenues.

In the case that the implementation of the public aid at issue of the public aid was completed before the Republic of Bulgaria’s accession to the European Union, that aid was accordingly not, following accession, such as to give rise to expenditure or increased financial liability for the Bulgarian State bodies, or to decrease the Republic of Bulgaria’s budgetary revenues. In those circumstances, that public aid cannot be regarded as ‘applicable’ post-accession for the purposes of Annex V to the Act of Accession. Consequently, those measures cannot be considered to be either ‘existing aid’ or ‘new aid upon accession’ for the purposes of that annex.

By contrast, proceedings to recover public aid granted to a company before the Republic of Bulgaria’s accession to the European Union, must, in the event of non-compliance with the conditions laid down in Article 9(4) of Protocol No 2 to the Europe Agreement establishing an association, under which Bulgaria was authorised to grant public aid for the restructuring of its steel sector, subject to the condition, inter alia, that the aid lead to the viability of the recipient undertakings under normal market conditions by the end of the restructuring period, be based on Article 3 of the Additional Protocol. In that context, the competent national authorities may, pursuant to the third paragraph of Article 3, adopt a decision to recover public aid which does not satisfy those conditions. A decision adopted by the European Commission on the basis of the second paragraph of Article 3 of the Additional Protocol does not constitute a necessary prerequisite for the recovery of such aid by those authorities.

(see paras 40, 51-53, 55, 58-60, 71, operative part)

2.        It follows from Article 2 of the 2005 Act of Accession that Articles 87 EC to 89 EC and Regulation No 659/1999, relating to the application of Article 88 EC, are applicable in Bulgaria only as from its accession to the European Union on 1 January 2007, under the conditions laid down in the Act of Accession.

As may be inferred from inter alia Article 1(b)(i) and (c) of Regulation No 659/1999, read in conjunction with Article 2 of the Act of Accession, it is only as from the time of accession that, in Bulgaria, the criteria laid down in Article 87(1) EC may be directly applied as such, and then only in respect of situations that arise on or after that date. Moreover, existing aid may only be the subject, should the situation arise, of a decision of incompatibility producing effects for the future.

(see paras 50, 54)