1999/509/EC: Commission Decision of 14 October 1998 concerning aid granted by Spain to companies in the Magefesa group and their successors (notified under document number C(1998) 3211) (Only the Spanish text is authentic) (Text with EEA relevance)

• Articles: 4

Article 1

The aid in the form of the persistent non-payment of taxes and social security contributions:

- by Indosa and Cunosa until they were declared bankrupt,

- by Migsa and Gursa until their activities were interrupted, and

- by Indosa after its declaration of bankruptcy and until May 1997,

is illegal, as it was granted by Spain in breach of its obligations under Article 93(3) of the EC Treaty.

The aid is considered to be incompatible with the common market within the meaning of Article 92(1) of the Treaty, as it does not meet any of the necessary conditions for the application on any of the derogations provided for by Article 92(2) and (3).

Article 2

1. Spain shall take the necessary measures to recover from the beneficiaries the aid referred to in Article 1 which was granted to them illegally.

2. The aid shall be recovered in accordance with the procedures and provisions laid down in Spanish law. The sums to be recovered shall include the interest which has accrued between the granting of the aid and the date on which it is actually repaid. The interest shall be calculated on the basis of the reference rate used to calculate the net grant equivalent of regional aid in Spain.

Article 3

Spain shall inform the Commission within a period of two months from the date of notification of the present Decision of the measures to be taken to comply therewith.

Article 4

This Decision is addressed to the Kingdom of Spain.

Done at Brussels, 14 October 1998.

For the Commission

Karel VAN MIERT

Member of the Commission

(1) OJ L 5, 8.1.1991, p. 18.

(2) OJ C 330, 1.11.1997, p. 2.

(3) - Grupo Magefesa includes the main company, Manufacturas Generales de Ferretería (hereinafter referred to as "Magefesa"), the industrial companies Cuberta del Norte SA (Cunosa), Manufacturas Inoxidables Gibraltar SA (Migsa), Indosa, Investigación y Dessarrollo Udala SA and Las Mimosas SA (Inlamisa), through which Magefesa holds a stake in Edificios y Naves Industriales, SA (Enisa) and Tefal Española SA;

- Grupo Licasa, which includes La Industrial Cuchillería Alavesa SA, Licasa Patrimonial SA Manufacturas Gur SA (Gursa), Alberdi Hermanos SA (Albersa) and Licasa Industrial SA;

- similarly, various companies within the group (Magefesa, Cunosa, Gursa, Migsa, Indosa) formed a commercial group, Agrupación de Empresas "Magefesa", through which they bought their raw materials and marketed their products.

(4) SAL is the acronym of sociedad anónima laboral, a limited company set up by the workers themselves. LCC, Idisur and Vitrinor were set up on 9 June 1994, 22 April 1993 and 27 March 1995 respectively. Idisur concluded a commercial agreement with the Agrupación de Empresas Magefesa on 1 October 1993.

(5) Regulated by Royal Decree 505/1985 of 6 March 1985.

(6) Loan guarantees: (i) ESP 972 million granted by the Basque Government on the basis of two decisions taken in connection with Decree 150/1985 of 11 June 1985, as follows: guarantee of ESP 300 million granted on 21 January 1986 directly to Indosa; and guarantee of ESP 672 million, granted on 3 June 1986 to Ficodesa for use by the companies of the Magefesa and Licasa subgroups based in the Basque Country; (ii) guarantee of ESP 512 million, granted by the authorities of the Autonomous Community of Cantabria in March 1986 to Gemecasa, for use by Cunosa and Gursa; (iii) guarantees totalling ESP 96 million, granted by the Sociedad para la Promoción y Reconversión Industrial de Andalucía (Soprea, today known as the Instituto de Fomento de Andalucía) to Manufacturas Damma on 14 February 1986 and 5 February 1987 for use by Migsa.

(7) The sum of ESP 39 million, referred to in Decision 91/1/EEC and in the decision to initiate this procedure, has been corrected on the basis of documents submitted by the Spanish authorities.

(8) Grants: (i) grant of ESP 803 million awarded by the Basque Government on 3 June 1986 to Ficodesa "for deployment" within the companies of the subgroups Magefesa and Licasa, based in the Basque Country, on the basis of decisions adopted under Decree 150/1985 of 11 June; (ii) grant of ESP 262 million awarded by the Autonomous Community of Cantabria in October 1986 to Gemacasa, for deployment within Cunosa and Gursa; (iii) grant of ESP 29 million awarded by the authorities of the Autonomous Community of Andalusia to Manufacturas Damma on 29 May 1987 under Decree 93/1987, with a view to supporting the social measures underpinning the relaunch of Migsa.

(9) As explained under (b) of this section, loans subject to conditions different from those applying on the market were granted within the framework of a "refund agreement", under which Fogasa, having been surrogated by law to the workers' rights with respect to the debtor companies, and on the basis of the applicable legislation, decided not to initiate enforcement procedures immediately, but to conclude a "refund agreement". As the "refund agreement" was not respected, Fogasa remained at liberty to continue with enforced recovery.

(10) The sums are given in ecu for illustrative purposes only (ECU 1 = ESP 166,822).

(11) The total sum is ESP 12439688347, which is equivalent to ECU 74,56 million. This sum does not include the aid to Indosa which was declared incompatible in 1989.

(12) Derio (Vizcaya) is the municipality where Indosa is based.

(13) [1997] ECR I-2549.

(14) As indicated in the report on the bankruptcy of Indosa submitted by the bankruptcy commissioner on 4 October 1995, some of the unpaid taxes date back to 1982.

(15) Advocate-General Jacobs stated in his opinion of 24 September 1998 in Case C-256/97, D. M. Transport, that it was clear that, in certain circumstances, continued generous tolerance of the delayed payment of social security contributions could confer a considerable commercial advantage on the beneficiary company, and that it could, in extreme cases, amount to debt forgiveness with regard to those contributions (paragraph 33).

(16) See footnote 15.

(17) OJ C 368, 23.12.1994, p. 12.

(18) Commission communication of 24 November 1983 (OJ C 318, 24.11.1983, p. 3). See also the Court of Justice's judgments of 12 July 1973 in Case 70/72 Commission v. Germany [1973] ECR 813, and 24 February 1987 in Case 310/85 Deufl v. Commission [1987] ECR 901.

(19) Letter from the Commission to the Member States SG (91) D/4577, 4 March 1991. See also the Court of Justice's decision of 21 March 1990 in Case 142/87 Belgium v. Commission [1990] ECR I-959.

(20) See the judgment cited in footnote 19, paragraphs 58 to 63.