91/390/EEC: Commission Decision of 26 March 1991 on aid granted by the French Government to the undertaking Saint-Gobain (Eurofloat) at Salaise-sur-Sanne (glass sector) (Only the French text is authentic)

• Articles: 7

Article 1

The aid granted by France to the company Saint-Gobain (Eurofloat) in the form of a FF 1 329 000 payment for vocational training is unlawful, having been granted in breach of the provisions of Article 93 (3) of the EEC Treaty. However, the aid may be considered to be compatible with the common market pursuant to Article 92 (3) (c) of the EEC Treaty.

Article 2

The FF 2 499 400 aid granted by France to the company Saint-Gobain (Eurofloat) in August 1989, in the form of the difference between the price of FF 2 780 000 which Sivom paid for the purchase of land in the years preceding Saint-Gobain's establishment on it and the price for which the land was sold by Sivom to Saint-Gobain, namely FF 280 600, is unlawful, having been granted in breach of the provisions of Article 93 (3) of the Treaty. In addition, the aid is incompatible with the common market pursuant to Article 92 (1) of the Treaty, since it does not meet the conditions for exception provided for in Article 92 (3).

Article 3

The French Government shall abolish the aid of FF 2 499 400 referred to in Article 2 of this Decision and require its repayment within two months of the notification of this Decision. Such repayment shall be made in accordance with the procedures and provisions of national law, notably those concerning interest on arrears payable on State claims, with interest starting to run on the date on which the illegal aid was granted.

Article 4

The French Government shall inform the Commission, within two months of the notification of this Decision, of the measures taken to comply with it.

Article 5

This Decision is addressed to the French Republic.

Done at Brussels, 26 March 1991.

For the Commission

Leon BRITTAN

Vice-President

(1) OJ No C 274, 31. 10. 1990, p. 13.(2) OJ No L 276, 19. 10. 1984, p. 37 (Maasglas).(3) OJ No L 283, 27. 10. 1984, p. 39 (Luxguard).(4) OJ No L 166, 16. 6. 1989, p. 60 (Veneziana Vetro).(5) OJ No L 342, 5. 12. 1986, p. 32 (St-Roch).(6) OJ No L 77, 19. 3. 1987, p. 47 (Glaverbel).(7) [1988] ECR 1573.(8) OJ No L 156, 20. 6. 1991, p. 33.

Article 92

(1) lays down the principle that aid having certain characteristics which it specifies is incompatible with the common market.

The derogations from that principle which are set out in Article 92 (2) of the Treaty are inapplicable in this instance, given the nature and objectives of the aid, and were not in any case invoked by the French Government.

VII

Article 92

(3) of the Treaty specifies the aid which may be considered to be compatible with the common market. Compatibility with the Treaty must be viewed in the context of the Community and not of a single Member State. So as to maintain the proper functioning of the common market and take account of the principles laid down in Article 3 (f) of the Treaty, the exceptions to the principle laid down in Article 92 (1) which are set out in Article 92 (3) must be interpreted strictly in examining any aid scheme or any individual aid measure.

In particular, the derogations may be applied only if the Commission finds that, if the aid were not granted, market forces alone would not be sufficient to induce the recipients to act in such a way as to achieve one of the objectives pursued.

Applying the derogations to cases which do not contribute to such an objective, or where the aid is not necessary for this purpose, would mean conferring undue advantages on the industries or undertakings of certain Member States, whose financial position would be strengthened, and affecting trading conditions between Member States and distorting competition, without any justification based on the common interest referred to in Article 92 (3).

With regard to the derogations provided for in Article 92 (3) (a) and (c) for aid intended to promote or facilitate the development of certain regions, it should be

noted that the French Government has not put forward any arguments relating to regional aspects to justify the granting of the aid.

As regards the building of the new float-glass production line at Salaise-sur-Sanne, it should be noted that the standard of living in the region, as indeed in all the regions of mainland France, is not abnormally low, that the region does not suffer from serious underemployment within the meaning of the derogation laid down in Article 92 (3) (a), and that the area within which Salaise-sur-Sanne is situated is not currently included amongst those receiving special regional aid

within the meaning of the derogation provided for in Article 92 (3) (c).

With regard to the derogations provided for in Article 92 (3) (b), it is to be noted that the aid is not intended either to promote the execution of an important project

of common European interest or to remedy a serious disturbance in the French economy; nor, indeed, did the French Government put forward any argument calling for the application of such derogations.

With regard to the derogations provided for in Article 92 (3) (c) for aid to facilitate the development of certain economic activities, where such aid does not adversely affect trading conditions to an extent contrary to the common interest, a distinction should be made between the aid provided by the 'Conseil Général de l'Isère' for training purposes and the aid provided by Sivom for the purchase of Saint-Gobain's land at Salaise-sur-Sanne.

Although the FF 1 329 000 training aid also benefited Saint-Gobain, it is not specifically linked to the investment at Salaise-sur-Sanne, but to training measures having primarily a social purpose. Such aid may be deemed to facilitate vocational training in the flat-glass sector - and, consequently, the sector itself - without adversely affecting trading conditions to an extent contrary to the common interest.

However, as regards the FF 2 499 400 aid granted by Sivom in the form of the difference between the prices paid for Saint-Gobain's land at Salaise-sur-Sanne, such aid relieves the recipient undertaking of part of the costs of its investment. In its letter to the French Government of 3 August 1990, the Commission pointed out that the construction of a new flat-glass production line did not facilitate the development of the sector within the meaning of Article 92 (3) (c). Furthermore, in view of Saint-Gobain's financial situation, it took the view that market forces alone would have been sufficient to ensure that the investment was carried out, without State assistance.

In presenting its comments during the procedure, the French Government did not refute the view taken by the Commission in its letter of 3 August 1990. On the contrary, it stressed the small percentage of the aid, if aid there were,

in relation to the total amount of the investment (FF 570 million). In this respect, it should be borne in mind that,

as made clear by the judgment of the Court of 21 March 1990 (Tubemeuse, C-142/87), the fact that aid is relatively small in amount does not necessarily rule out the possibility of trade between Member States being affected.

In this connection, the Commission notes that future demand for flat glass depends in large measure on the needs of the two main markets for it, namely the motor vehicle and building industries. The future supply of flat glass will be influenced by new production capacities being established or planned

in the United Kingdom and Germany as well as in non-Community countries. The new float-glass production line at Salaise-sur-Sanne adds 2 1/2 % to existing capacity in the Community. It has been the Commission's consistent policy to ensure that, given the vulnerability of the flat-glass sector, its structural development is not disrupted by State aid. It is for this reason that, in its Decisions 84/487/EEC (2), 84/507/EEC (3) and 89/373/EEC (4), it decided that the aid measures planned respectively by the Dutch, Luxembourg and Italian Governments to assist the setting-up of additional flat-glass production and processing plants were incompatible with the common market and must not therefore be granted. It also took the view that aid measures to assist the renovation of existing float-glass production lines were not compatible with the common market and consequently decided, in Decisions 86/593/EEC (5) and 87/195/EEC (6), that the Belgian Government should refrain from granting aid for such renovation, even if the investment concerned involved technological innovation. The soundness of this approach was upheld by the Court of Justice in its judgment of 8 March 1988 in Joined Cases 62 and 72/87 (7).

In view of the above, the Commission considers that aid, even if of low intensity, for the construction of additional flat-glass production capacities does not facilitate the development of the sector concerned within the meaning of Article 92 (3) (c) and does not therefore qualify for that exception.

The aid granted must be abolished and must be repaid (see the judgment of the Court of Justice of 14 February 1990 in Case C-301/87 (Boussac), ground 22).

Repayment must be made in accordance with the procedures and provisions laid down in French law, and in particular those concerning interest on arrears on State claims, such interest starting to run on the date on which the illegal aid was granted. This measure is necessary in order to restore the status quo by removing all the financial advantages from which the recipient firms have improperly benefited since the

date on which the aid was paid (see the judgment of 21 March 1990 in Case C-142/87 (Tubemeuse), ground 66). This approach was moreover adopted by the Commission in its Decision 91/304/EEC (8) (Heinrich Reinhold),

HAS ADOPTED THIS DECISION: