Opinion of Advocate General Giuseppe Tesauro delivered on 31 March 1993

1 Original language: Italian.

2 Judgment in Case 120/73 Lorenz v Commission [1973] ECR 1471.

3 Judgment in Joined Cases 91 and 127/83 Heineken Brouwerijen v Inspector of Corporation Taxes [1984] ECR 3435.

4 Judgment in Case 84/82 Germany v Commission [1984] ECR 1451.

5 The requirement that the preliminary stage must be brief is also confirmed a contrario by other judgments, in which the Court has pointed out that a delay in initiating the Article 93(2) procedure does not contravene the general principle of certainty provided it is attributable to the conduct of the State granting the aid and not to a lack of diligence on the Commission's part. That is the case where the State has failed to communicate in full the information needed for the assessment of the aid (judgments in Case C-301/87 France v Commission [1990] ECR I-307, and in Case C-305/89 Italy v Commission [1991] ECR ).

6 Judgment in Case 70/72 Commission v Germany [19731 ECR 813.

7 Judgment in Case 323/82 Intermills v Commission [1984] ECR 3809.

8 Judgment in Case C-269/90 Technische Universität München v Hauptzollamt München-Mitte [1991] ECR.

9 In his Opinion, Mr Advocate General Slynn had maintained in that regard that the power of the Commission to approve a plan for aid during the preliminary period (on a prima facie view) is a limited one and outside that limited area Member States have a right to be heard, subsequently pointing out with regard to the extent of those limits that if the Commission is unable to say that the plan as presented is, on a prima facie view, clearly compatible with the Common Market, then the Article 93(2) procedure must be initiated.

10 It should be noted, in passing, that in the very recent judgment in Case C-313/90 CIRFS v Commission [1993] ECR I-1125, the Court confirmed that a decision to raise no objections constitutes a definitive measure and is, as such, open to challenge under Article 173 of the Treaty. That, evidently, follows logically from the fact that the decision to raise no objections is a measure whereby the Commission gives a definitive ruling on the compatibility of a particular aid.

11 See the recent Order in Case 191/88 Co Frutta v Commission [1989] ECR 793.

12 Judgment in Case 169/84 COFAZ v Commission [1986] ECR 408.

13 The net grant equivalent is, as we know, a percentage which measures the intensity of an investment aid. It expresses the ratio, net of tax, between the amount of the aid granted and the value of the investment to be financed in part by the aid.

14 The applicant, as we shall see, contests the criterion applied by the Commission in calculating the intensity of one of the aids received by PYRSA, but it has never disputed that the overall intensity of the aids in question is not in any event such as to exceed the ceiling of 75% NGE.

15 The text of the Resolution of 20 October 1971 of the Representatives of the Governments of the Member States meeting within the Council, which, by incorporating the implementing principles and criteria laid down by the Commission reflects the undertaking of the Member States to comply therewith, is published in the OJ, English Special Edition, Second Series, January 1974, DC Resolutions of the Council and of the Representatives of the Member States, p. 57. So far as concerns the Commission's guidelines, which have found expression, when applied, in a large number of decisions, see the 1979 Communication in OJ C 31 of 3 February 1979, p. 9 (in particular, points 10 to 12) and the 1988 Communication in OJ C 212 of 12 August 1988, p. 2 (in particular, the second and third indents of point 6).

16 See the Commission's 1988 Communication, cited above, paragraph 6.

17 COM(78) 221 final, May 1978.

18 Ibid.

19 Ibid.

20 Ibid.

21 OJ C 320 of 13 December 1988, p. 3.

22 In more detail, the CAEF statistics (annexed to a document produced by the applicant, which contains the text of observations made at the Steel Castings Conference on 19 February 1992) are, for the five major producer countries of the EEC (Germany, France, Spain, United Kingdom and Italy) which account for approximately 80% to 85% of total EEC output, as follows: So far as concerns production: for 1970 to 1990: a reduction of approximately 40% (from a volume of 1417000 tonnes to 862000 tonnes); for 1990 to 1995: a further reduction of 25% (from 862400 tonnes to 643000 tonnes); for 1995 to 2000: a further decrease of approximately 4% (from 643000 tonnes to 618000 tonnes). So far as concerns production capacity: for 1970 to 1990: a reduction of 34% (from 1615000 tonnes to 1065200 tonnes); for 1990 to 1995: a further decrease estimated at approximately 16% (from 1065200 tonnes to 895000 tonnes); for 1995 to 2000: a further decrease estimated at approximately 9% (from 895000 tonnes to 810000 tonnes). So far as concerns the rate of overcapacity the trend is as follows: 13.9% in 1970; 30.5% in 1980; 23.5% in 1990; 39.2% in 1995; and 31.1% in the year 2000. The trend in the course of the 1980s must be viewed in conjunction with the implementation of industrial restructuring plans which led to a reorganization of production capacity. The trend forecast for the 1990s, on the other hand, can be explained either by a further fall in demand (mainly as a result of better quality and durability of the products and of competition from substitute products) or by more intense competition from third-country imports (especially from the countries of Eastern Europe). Finally, so far as concerns the trend with regard to the rate of overcapacity in Spain, the CAEF figures are as follows: 40.1% in 1990; 64.7% in 1995; and 62.5% in the year 2000.

23 See, in particular, the following letters, already annexed to Cook's formal complaint and included amongst the documents annexed to the application: letters of 16 July 1990 and 22 August 1990 from the chief executive of the largest French producer in the sector, a former president of the CAEF, emphasizing the efforts made by traders, with very little government assistance, to eliminate overcapacity, criticizing Spain's frantic policy of subsidizing its foundries contrary to the European rules, and pointing out that we have made many financial sacrifices and contributions (France ana Europe) to reorganize the trade and we would not wish to see our efforts nullified; letter of 2 July 1990 from the chief executive of the German trade association in the foundries sector which also criticizes the incompatibility of the Spanish aids in a situation in which overcapacity already exists. Those reactions, moreover, are confirmed in the document produced by the applicant, setting out the observations made at the Steel Castings Conference of 19 February 1991, which have also been left unchallenged by the Commission, and in which it is pointed out that until 1995 drastic capacity reshuffles with all their consequences for the workforce are unavoidable, especially since the pace of capacity reductions in the past failed to match the decline in the steel castings market. The document also emphasizes that the increase in overcapacity which still exists in certain countries (including Spain) reveals an extensive degree of government interference in the economies of these countries; that at the moment the investigations of our European apex organization CAEF indicate unmistakably that Europe is facing yet another increase in the extent to which capacities exceed market volumes; that this being so, the European steel castings industry is facing yet another structural crisis demanding urgent action; that, in particular, in Spain, the demand for adaptation is especially urgent, for in that country, capacity exceeded output by approximately one-third as early as 1970; and that even now, the EC authorities need to act swiftly in order to ensure that the EC steel foundries can master this crisis on their own.