The Commission's decision opening a formal procedure for examining aid from the Republic of Austria, the Bundesland Kärnten and the municipality of Villach to the company Siemens is annulled
Community law provides for a system of preventive State-aid supervision. The Commission must be informed of any new aid, so that, on completion of a preliminary phase, the Commission may, in appropriate cases, open a contentious examination procedure, one effect of which is to prohibit the Member State concerned from putting the proposed measures into effect until the Commission adopts a final decision.
The case-law of the Court has already made it clear that the aim of the preliminary phase is to enable the Commission to form a prima facie opinion of the partial or complete conformity with the Treaty of the aid plans notified to it. Given that Member States have an interest in obtaining clarification expeditiously, the preliminary phase must be kept within a reasonable period of no more than two months, at the end of which the Member State may put its aid into effect.
On expiry of that two-month period, any examination of proposed aid will come under the system governing existing aid, the conformity of which with Community law is checked on a continuing basis with the Member State concerned.
On 9 February 1998, after an exchange of correspondence with the Republic of Austria lasting from 21 June 1996 to 10 November 1997, the Commission adopted a decision to open a formal procedure for examining State aid in favour of the company Siemens Bauelemente OHG, established in Villach, Austria.
The total cost of the project notified to the Commission, which was essentially a research and development project, was ATS 4 563.7 million, of which ATS 371 million was to be covered by State aid granted partly by the federal authorities, and partly by the Bundesland Kärnten and the municipality of Villach.
The Republic of Austria's application to the Court for annulment of the Commission's decision
Austria argued that the Commission had been properly informed about the aid project, at the latest, once it had received certain information provided on 10 September 1997. On expiry of a period of two months from that date, on 20 November 1997, it was entitled to inform the Commission of its intention to pay the aid in question.
The Court held, firstly, that the Republic of Austria had clearly stated in its notification that the promise of aid was subject to obtaining full or partial clearance from the Community authorities. It had therefore not ignored the mechanisms which exist in order for the Community authorities to examine plans to grant State aid.
Next, the Court considered whether or not the information provided by the Republic of Austria to the Commission had been complete. If it had, it would be possible to establish the date on which the two-month period had begun.
The Court held that a notification is complete when it contains such information as will enable the Commission to form a prima facie opinion on the compatibility of the aid with the Treaty. Having examined the letters sent by the Republic of Austria, the Court held that the two-month period had begun no later than 24 March 1997.
The period of two-months, to which the Court had referred in an earlier judgment, was intended to remove legal uncertainty contrary to the purpose of the preliminary phase of State-aid supervision. Austria could therefore invoke that period.
Lastly, the Court held that a plan to grant aid, once notified, will become existing aid provided that the Member State concerned gives the Commission prior notice of its intention to put the proposed aid into effect and provided that the Commission does not, within the two months following complete notification of the aid, open the contentious examination procedure.
Once that period has expired, and once the notified aid has been put into effect, the Commission thus does not have any right of objection. If it did, that would amount to adding a new stage to the procedure governing State aid laid down by Community law.
The Court had already held in 1973 in the Lorenz case that the Commission must, when conducting its preliminary examination, keep within a reasonable period of no more than two months.
That two-month time-limit has, through subsequent decision of the Court, become mandatory.
In those circumstances, the Court of Justice annulled the Commission's decision.
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