Article 6
This Decision is addressed to Kingdom of Spain. Done at Brussels, 27 November 2002. For the Commission Mario Monti Member of the Commission (1) OJ C 55, 2.3.2002, p. 33. (2) See footnote 1. (3) OJ L 107, 30.4.1996, p. 4. (4) Interest was incurred if the agreed instalments were not paid. (5) Normally, in determining whether or not an interest rate is in line with market conditions, the Commission makes a comparison with the value at the relevant time of the reference rate fixed for the Member State concerned. However, at the time no such rate had been fixed for Spain. Therefore, in accordance with the Council resolution of 20 October 1971 on general regional aid schemes (OJ C 111, 4.11.1971, p. 1), the Commission must make a comparison with the average rate of interest in the relevant market, which in this case is the average rate of interest charged by private banks in Spain on loans over more than three years. In 1991, according to statistics published by the Bank of Spain, this rate was 18,24 %. The Commission has used this rate on several previous occasions (see for example Decision 91/1/EEC Magefesa (OJ L 5, 8.1.1991, p. 18) and Decision 96/655/EC La Seda de Barcelona (OJ L 298, 22.11.1996, p. 14)). (6) According to an estimate made on 3 July 1990 by the Social Security Executive Recovery Unit, the value of the two plots of land and buildings that were later brought under the mortgage amounted to ESP 448908000 plus ESP 82290000 (totalling EUR 3192564). Refractarios' viability plan referred to another valuation, carried out on 16 May 1990, which estimated the value of the second plot at ESP 122160000, bringing the total to EUR 3432187. The value of the machinery and installations was estimated at ESP 220250000 (EUR 1323729), which brings the total estimated value to between ESP 751448000 and ESP 791318000 (EUR 4516293 to EUR 4755917). (7) In the event of insolvency or bankruptcy of the employer, Fogasa pays compensation to the workers made redundant, and assumes by law their rights, but only for the statutory amounts. This is laid down in Royal Decree 505/1985 of 6 March 1985 on the organisation and operation of the Wage Guarantee Fund (Spanish Official Gazette No 92, 17.4.1985, p. 10203), by which Spain transposed Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer (OJ L 283, 28.10.1980, p. 23). On the basis of Article 32 of the Royal Decree, Fogasa can conclude recovery agreements with the companies concerned. The detailed arrangements and conditions for recovery are laid down in the Ministerial Order of 20 August 1985 (Spanish Official Gazette No 206, 28.8.1985, p. 27071). (8) According to the valuation of 16 March 1998 requested by the social security authorities, the value of land and buildings would be EUR 1528776 if the land-use plan did not change and EUR 3207820 if the land-use plan did change. (9) See recital 18. (10) Judgment of 2 July 2001 of Juzgado de lo Social (Social Affairs Tribunal) No 3, Oviedo, demanda 525/2001, sentencia 503/2001. The judgment confirms that Fogasa had not done anything to suspend the limitation period. (11) See footnote 1. (12) OJ C 288, 9.10.1999, p. 2. (13) See footnote 1. (14) OJ L 83, 27.3.1999, p. 1. (15) OJ C 37, 3.2.2001, p. 3. (16) Case 730/79 Philip Morris v Commission [1980] ECR 2671, paragraph 11, and Case T-214/95 Vlaams Gewest v Commission [1998] ECR II-717, paragraph 50. (17) Refractarios (letter of 15 April 2002, p. 45) argued that in the event of bankruptcy only 17 % of the debt would have been repaid, but this calculation is based only on the value of the land and installations which were later mortgaged. (18) Another argument put forward by Spain is that if the public authorities had insisted on a better result, there would have been fewer resources left for ordinary creditors and these may have been less inclined to agree to a debt reduction. This argument, however, is only valid in the eventuality of the public authorities trying to obtain more than they could reasonably expect under a bankruptcy scenario. (19) Refractarios argues that the public authorities based their expectations of recovery on the original valuation made in 1990, which indicated a value of EUR 4516293. (20) The report is dated 12 September 2000. Refractarios' profits for 2000 and 2001 amounted to EUR 104000 and EUR 768402 respectively. The annual accounts were approved only on 27 June 2002, so they would have been unknown to the social security and the tax authorities at the time of their agreements with Refractarios. A private creditor would probably have made a global analysis, but would not have had the figures for the annual results either. (21) OJ C 74, 10.3.1998, p. 9. (22) For example Case C-78/76 Steinike and Weinlig v Germany [1997] ECR 595. (23) See, for example, the Magefesa case, Commission Decision 91/1/EEC (cited in footnote 6) and Commission Decision 1999/509/EC of 14 October 1998 (OJ L 198, 30.7.1999, p. 15) (confirmed by the Court on 2 July 2002 in Case C-499/99 Commission v Spain, not yet published); the La Seda de Barcelona case, Commission Decision 96/655/EC (cited in footnote 6); and the Tubacex case, Commission Decisions 97/21/ECSC, EC (OJ L 8, 11.1.1997, p. 14) and 2001/142/EC (OJ L 52, 22.2.2001, p. 26) and Court judgment in Case C-342/96 Spain v Commission [1999] ECR I-2459. (24) See footnote 8. (25) See footnote 6. (26) See in particular the Court's judgment in Tubacex, cited in footnote 24 above. (27) Judgment of the Court of First Instance in Case T-95/96 Gestevision Telecinco v Commission [1998] ECR II-3407.