(1) lays down that in general State aid is incompatible with the common market.
By way of the rescue aid, Schiffswerft Germersheim could avoid the consequence of the EEC policies on control and reduction of the Community fleet for inland waters. Regulation (EEC) No 1101/89 was adopted against the background of the manifest structural overcapacity in every sector of the inland waterway transport market; only a scrapping scheme is expected to be able to bring about a substantial reduction in this overcapacity. Aid projects to maintain building capacity on the supply side of the market for inland vessels in general are not consistent with such a policy in a situation of substantial imbalance between offer and demand. Development aid projects could provide an exemption from this rule as long as the project is of a genuine developing character and the continued operation of the building capacity can be seen as a positive side-effect. Where on top of such aid additional rescue aid is needed without clear indications of a planned restructuring, the conclusion can be only that such cumulation of aid is not in the common interest.
IV
The aid projects for the continued operation of the yard in Germersheim do not qualify for any of the exceptions in Article 92 (3) of the EEC Treaty.
The region Ludwigshafen/Mannheim, in which Germersheim is situated, is not acknowledged as an aid beneficiary region under the common regional aid policy. For this reason the provisions of Article 92 (3) (a) do not apply.
The aid projects for the Germersheim yard cannot be seen as contributing to the realization of an important project of common interest or remedying a serious disturbance in a Member State's economy, given the size of the building projects and the sector they are in. Therefore the exception in Article 92 (3) (b) does not apply either.
The provisions of Article 92 (3) (c) where it is stated that aid projects can be compatible with the common market if the aid project is aimed at facilitating certain economic activities or certain regional economies provided that these do not harm the common interest, do not apply either. No reference was made in the notifications to restructuring measures or new activities in possible new markets intended by the yard, whereas it has already been argued above that rescue aid only aimed at the continued operation in a market where already a prominent overcapacity exists is not consistent with the present common policy and therefore not in the common interest. The present common policy laid down in Regulation (EEC) No 1101/89 is designed to reduce the overcapacity that affects every sector of the inland waterway transport market by introducing a scrapping scheme as the only way to bring about a substantial reduction in overcapacity in the near future, thus improving the structures of inland waterway transport. Therefore, aid to an inland waterway transport producer which is not granted for the purposes of restructuring does not contribute to the Community objective of reducing overcapacity in this sector and is therefore contrary to the common interest. Therefore Article 92 (3) (c) does not apply either.
Since the aid is contrary to the common interest and has been paid without the prior authorization of the Commission, it is illegal and incompatible with the common market.
Therefore, the German authorities should be required to recover it from the beneficiary. In order to quantify the benefit of the aid, the Commission has drawn on the common agreement reached with Member States at a multilateral meeting, in which the German authorities also participated, where it was agreed that the aid equivalent of a guarantee granted in the shipbuilding sector would be deemed to be 10 % of the amount of the loan covered by the guarantee. Such assessment of guarantees has since become the practice in all aid projects where guarantees were involved. Therefore the Commission considers that the value of the guarantees which are the subject of this Decision should also be fixed at 10 %,
HAS ADOPTED THIS DECISION: Article 1
The aid measures adopted by the German Government to provide a 90 % guarantee on a DM 1,8 million loan for working capital and a 95 % guarantee on a DM 20,7 million loan for working capital for the Schiffswerft Germersheim GmbH im Konkurs are incompatible with the common market within the meaning of Article 92 (1) of the EEC Treaty, having been granted contrary to the procedural rules set out in Article 93 (3) and moreover cannot qualify for the exceptions in Article 92 (3) of the EEC Treaty. Article 2
Germany shall abolish the aid referred to in Article 1 by recovering the aid element contained in the public guarantees on part of the company's financing, i.e. 10 % of the 90 % guarantee on the DM 1,8 million loan which is DM 162 000 and 10 % of the 95 % guarantee on the DM 20,7 million loan which is DM 1 966 500 and by ordering the withdrawal of such of those guarantees mentioned in Article 1 as are still operational. Article 3
Germany shall inform the Commission within two months from the notification of this Decision of the measures it has taken in order to redress the illegal situation described above. Article 4
This Decision is addressed to the Federal Republic of Germany. Done at Brussels, 12 December 1990. For the Commission
Leon BRITTAN
Vice-President (1) OJ No L 69, 12. 3. 1987, p. 55. (2) OJ No L 116, 28. 4. 1989, p. 25. (3) OJ No C 52, 3. 3. 1990, p. 10.