ANÁLISIS DE LA EMPRESA

be implemented in the most efficient way possible. The Commission’s decision would be without substance, if it did not include strict conditions for its implementation. Especially, since there is no supranational procedure, its implementation is largely left to the competence of national authorities and their national laws and administrative procedures.125

There may be no supranational procedure for repaying unlawfully paid amounts of aid to the State budget, but the Procedural Regulation lays down the rules. According to the Procedural Regulation, the procedure to refund the aid should achieve recovery from the beneficiary without delay and should respect national legal procedures, only if those achieve ‘immediate and effective execution’ of the Commission’s recovery

122 _{Case 223/85 RSV V Commission [1987] ECR 4617 para 17.} 123

Case C-348/93 Commission v Italy [1995] ECR I-673 para 16.

124 _{Case C-378/98 Commission v Belgium [2001] ECR I-5107 para 32.}

125 _{Case C-24/95 Land Rheinland – Pfalz v Alcan Deutschland GmbH [1997] ECR I-1591 para}

182

decision.126 It was said that this Article ‘is an expression of the principle of effectiveness’127

in Union law, which limits the autonomous character of the national provisions, if they are not effective to achieve the results envisaged in the Union law. This Article is the legal basis behind the Commission’s practice to include in every recovery decision a phrase that basically reproduces the text in Article 14(3) of the Procedural Regulation, but it does not impose specific time limits, within which the recovery must be completed at the national level.128

3.8. PROBLEMS WITH THE IMPLEMENTATION OF RECOVERY DECISIONS

Notoriously, recovery has not been a successful procedure in state aid enforcement. The Commission’s Scoreboard shows that the situation is improving in the implementation of the recovery decisions. The table 1 at the Appendix shows that between 2000 and 2012 the Commission adopted 172 recovery decisions for the total of Members States. In 30/6/2012, 128 of those cases were closed, which means that aid in 44 cases is still to be recovered.129 The number of recovery cases, still pending in 31.12.2004,130 was 93,131 which shows the progress that was made. Table 3 is even more

126 _{Article 14(3) of the Council Regulation (EU) No 734/2013 amending Regulation (EC) No}

659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty [2013] OJ L-204/15

127 _{F-E Gonzalez Diaz, ’Community Report’ in P Nemitz (ed), The effective application of EU}

State Aid procedures (Kluwer law 2007) 78.

128

Ibid 79.

129

State Aid Scoreboard Report on state aid granted by the EU Member States - Autumn 2012 Update COM(2012) 778 final

130

The year 2004 was chosen to make the comparison because that is when the Commission started implementing its reform of State Aid rules and decided to pursue better implementation of its decisions.

131

183

revealing perhaps because it shows the percentage of illegal and incompatible aid that has yet to be recovered. At 2012, that figure stands at 14.4%.132 Compared to the almost 50% that was still pending to be recovered at the end of 2004,133 it shows that there have been steps in the right direction, when it comes to enforcing state aid recovery decisions. Even though the situation is improving it is necessary to examine the problems that hinder implementation of recovery decisions.

When it comes to enforcing state aid recovery decisions a lot is left to the competence of Member States, under some conditions of course. In many cases, the Member States have been unwilling or unable to effectively and timely conclude the repayment of the illegal aid that was instructed by the Commission in a negative decision. Member states usually argue that they have difficulties, with problems relating to the issue of who should be held responsible for making the repayment, especially in large aid schemes. Other problems have been encountered with provisions of national laws and the appropriate form of the repayment. More particularly in Commission v Greece134 the Court rejected the argument of the Greek government that repayment of illegal tax exemptions should be made by a form of retroactive tax, and favoured repayment in amounts of cash equivalent to the illegal aid.

Years after the previous case, Commission v Greece,135 the Court returned on the matter of suitable form of repayment and clarified whether forms other than cash are suitable. In Commission v Germany136 the Court

132

State Aid Scoreboard Report on state aid granted by the EU Member States - Autumn 2012 Update COM(2012) 778 final, para 5.2

133

State Aid Scoreboard Spring 2005 update, COM(2005) 147 final,39.

134 _{Case C-183/91 Commission v Greece [1993] ECR I-3131 para 17.} 135 _Ibid.

136

184

affirmed that repayment of illegal aid can be made by means, other than cash payments. In that case, Germany was required to recover aid which consisted of the difference in the amounts of remuneration actually paid, with the ones that would have been paid in market conditions, for the transfer of a state bank to the WestLB bank. Germany proposed that the surplus of the WestLB should be distributed to the shareholders, and that should be considered as completion of the recovery obligation. The Court set the criteria for finding compliance with the recovery obligation, when means other than cash payments are to be implemented by the Member States: the measures must be transparent so that the Commission can assess their ability to eliminate the distortion of competition.137 In Commission v Germany the conditions that the Court set were not met so the Court rejected the proposed measure of ‘recovery’ as unsuitable.138

Also, there have been significant delays in the implementation of Commission recovery decisions in the past and the Commission tried to overcome those delays by inserting Article 14(3) in the Procedural Regulation.139 However, it did not go far enough and it did not establish specific timeframes even after the amendment of the Procedural Regulation in the context of the 2012 Modernisation initiative. The Court though, in most cases, has accepted such time-frames, which are included in Commission recovery decisions, as a time limit for the execution of the

137

Ibid para 44.

138 _{Ibid para 62.} 139

‘The regulation also lays an obligation in principle on the Commission to require the recovery of aid unlawfully granted which is not compatible with the common market.’ In European Commission, XXVIII th Report on Competition Policy 1998 (Brussels Luxembourg 1999) 83

185

decision.140 In Commission v Greece the Commission requested to be informed, within two months, of the measures Greece has taken to enact the recovery, and the Court accepted that Greece had failed to comply with the recovery decision ‘within the prescribed period’.141

Another problem may arise for the recovery if the national administrative procedures that implemented the Commission Decision are annulled. In Scott v Ville D’Orleans,142 the Administrative Court of Nantes in France sent a preliminary question to the Court, asking it whether annulment of national assessments done for the repayment of aid where compatible with Article 14(3) of the Procedural Regulation that provides for recovery without delay and effectively by the national authorities. The problem would be that, if the national assessments were to be annulled for procedural reasons, the recovery would have no legal basis and would have to be reversed.

The Court replied that the national measure could be annulled, if it did not have as a consequence the repayment of the illegal aid to the beneficiary. If on the contrary, the annulment resulted in the beneficiary regaining the illegal aid, even provisionally, it would mean that the anticompetitive advantage would be reinstated and thus, annulment of national measures would be incompatible with Article 14(3) of the Procedural Regulation that would prevail as a supranational rule of law. The whole system of implementing state aid law by the Commission is an ex ante system, that tries to prevent illegal aid from being granted, so

140 _{Case C-207/05 Commission v Italy [2006] ECR I-00070 para 31-36.} 141

Case C-415/03 Commission v Greece [2005] ECR I-3875 para 46. Greece was

subsequently taken before the Court again for failure to comply with this decision in Case C-369/07 Commission v Hellenic Republic [2009] ECR I-5703.

142

186

that it does not produce the negative results that have been presented in the previous chapter of this research. It is based on the notification of a plan to grant aid. This is how the implementation procedure should be ideally. However, the positive effects of state aid in the national economies of Member States and the lack of knowledge or capability as to the correct procedure contribute to the fact that a lot of aid still escapes the Commission’s control. Consequently, this is a big inefficiency of the supranational state aid regime, which was acknowledged by the Commission in its Notice on recovery.143

3.9 THE NOTICE ON RECOVERY AND HOW IT AIMS TO