6The legal background to the dispute was described as follows by the contested judgment:1 By letter of 31 December 1988, the Commission informed Member States that, during its meeting of 22 December 1988 and following its decision of 19 July 1988 to establish a Community framework on State aid to the motor vehicle industry (“Community framework”), based on Article 93(1) of the EC Treaty (now Article 88(1) EC), it had laid down the conditions for implementing that framework, reproduced in a document attached to the letter. It asked Member States to inform it of their acceptance of that framework within one month.2 The Community framework was the subject of a notice (89/C 123/03) published in the Official Journal of the European Communities (OJ 1989 C 123, p. 3). Point 2.5 thereof provided that it was to “enter into force on 1 January 1989” and to be “valid for two years”.3 According to the fourth paragraph of Point 1, a major objective of the framework was to impose stricter discipline on the granting of aid in the motor vehicle industry in order to ensure that the competitiveness of the Community industry was not distorted by unfair competition. The Commission stated that it could operate an effective policy only if it were able to take a position on individual cases before aid was granted.4 Under the first paragraph of Point 2.2 of the Community framework:“All aid measures to be granted by public authorities within the scope of an approved aid scheme to (an) undertaking(s) operating in the motor vehicle sector as defined above, where the cost of the project to be aided exceeds ECU 12 million are subject to prior notification on the basis of Article 93(3) of the EEC Treaty. As regards aid to be granted outside the scope of an approved aid scheme, any such project, whatever its cost and aid intensity, is of course subject without exception to the obligation of notification pursuant to Article 93(3) of the EEC Treaty. Where aid is not directly linked to a particular project, all proposed aid must be notified, even if paid under schemes already approved by the Commission. Member States shall inform the Commission, in sufficient time to enable it to submit its comments, of any plan to grant or alter aid.”5 In Point 3 of the Community framework, concerning guidelines for the assessment of aid cases, the Commission stated, inter alia, as follows:— Regional Aid[...]The Commission acknowledges the valuable contribution to regional development which can be made by the implantation of new motor vehicle and component production facilities and/or the expansion of such existing activities in disadvantaged regions. For this reason the Commission has a generally positive attitude towards investment aid granted in order to help overcome structural handicaps in disadvantaged parts of the Community.[Such] aid is usually granted automatically in accordance with [detailed rules] previously approved by the Commission. By requiring prior notification of such aids in future, the Commission should give itself an opportunity to assess the regional development benefits (i.e. the promotion of a lasting development of the region by creating viable jobs, linkages into [the] local and Community economy) against possible adverse effects on the sector as a whole (such as the creation of [significant] overcapacity). Such an evaluation does not seek to deny the central importance of regional aid for the achievement of cohesion within the Community but rather to ensure that other aspects of Community interest such as the development of the Community's industry are also taken into account.[...]”6 Since the German Government indicated to the Commission that it had decided not to apply the Community framework, the Commission adopted, in accordance with Article 93(2) of the Treaty, Decision 90/381/EEC of 21 February 1990 [amending] German aid schemes for the motor vehicle industry (OJ 1990 L 188, p. 55). Article 1 of that decision provides:1. From 1 May 1990, the Federal Republic of Germany shall notify to the Commission pursuant to Article 93(3) of the EEC Treaty all aid measures to be granted for projects costing more than ECU 12 million under the aid schemes set out in the Annex hereto to undertakings operating in the motor vehicle sector as defined in subsection 2.1 of the Community framework for State aid to the motor vehicle industry. Such notification shall be effected in conformity with the requirements laid down in subsections 2.2 and 2.3. The Federal Republic of Germany shall, moreover, provide annual reports as required by the framework.2. Further to the list of aid schemes set out in the Annex to this Decision (which list is not exhaustive), the Federal Republic of Germany shall also comply with the obligations of Article 1(1) with regard to all other aid schemes capable of benefiting the motor vehicle industry.3. Aid to undertakings in the motor vehicle industry operating in Berlin which are granted under the Berlin Förderungsgesetz are excluded from the prior notification obligation provided for in the framework but shall be included in the annual reports required by that framework.”7 By letter of 2 October 1990 addressed to the German Government, the Commission approved the regional aid scheme laid down for 1991 by the Nineteenth Outline Plan adopted pursuant to the German Law of 6 October 1969 on the Joint Task [between the Federal Government and the Länder] of “Improving the regional economic structure” (Gesetz über die Gemeinschaftsaufgabe “Verbesserung der regionalen Wirtschaftsstruktur”; hereinafter “the Joint Task Law”), whilst at the same time issuing a reminder of the need, when implementing the measures envisaged, to take account of the Community framework existing in certain sectors of industry. The Nineteenth Outline Plan itself indicates (Part I, point 9.3, p. 43) that the Commission:“has taken decisions which prohibit the implementation of State aid granted in certain sectors even if it were granted in the context of approved programmes (regional aid for example), or which make its implementation subject to the need for prior authorisation of each of the projects which it is intended to benefit...Such rules exist in the following areas:(a) ...— the motor vehicle industry, in so far as the cost of an operation which it is intended to benefit exceeds 12 million ecus”.8 The political reunification of Germany was declared on 3 October 1990, entailing the accession to the Federal Republic of Germany of five new Länder from the former German Democratic Republic, including the Freistaat Sachsen (Free State of Saxony).9 By letter of 31 December 1990, the Commission informed Member States that it considered it necessary to extend the Community framework.10 That Commission decision also formed the subject-matter of a notice (91/C 81/05) published in the Official Journal of the European Communities (OJ 1991 C 81, p. 4). That notice stated, inter alia, as follows:“[...] the Commission believes it necessary to renew the framework on State aid to the motor vehicle industry [...]. The only modification which the Commission has decided extends the prior notification obligation for the Federal Republic of Germany to Berlin (West) and the territory of the former GDR (Article 1(3) of the Commission's Decision of 21 February 1990, as published in OJ No L 188 of 20 July 1990, is no longer valid as from 1 January 1991).After two years the framework shall be reviewed by the Commission. If modifications appear necessary (or the possible repeal of the framework) these shall be decided upon by the Commission following consultation with the Member States”.11 By letters to the German Government of 5 December 1990 and 11 April 1991, the Commission approved the application of the Joint Task Law to the new Länder, whilst reiterating the need, when implementing the measures in question, to take account of the Community framework existing in certain sectors of industry. Similarly, by letter of 9 January 1991, it approved the extension of existing regional aid schemes to the new Länder, stating that the provisions of the Community framework had to be complied with.12 On 23 December 1992, the Commission decided that “the [Community] framework will not be modified”, and that it would remain valid until a subsequent review to be organised by the Commission. That decision formed the subject-matter of a notice (93/C 36/06) published in the Official Journal of the European Communities (OJ 1993 C 36, p. 17).13 In its judgment of 29 June 1995 in Case C-135/93 Spain v Commission [1995] ECR I-1651, at paragraph 39, the Court of Justice held that that decision should be interpreted as “having extended the framework only until its next review, which, like the previous ones, had to take place at the end of a further period of application of two years”, expiring on 31 December 1994.14 Following the delivery of that judgment, by letter of 6 July 1995, the Commission informed Member States that, in the Community interest, it had decided on 5 July 1995 to prolong retroactively from 1 January 1995 its decision of 23 December 1992, thereby making the Community framework apply without interruption. The Commission stated that that prolongation would come to an end once the procedure under Article 93(1) of the Treaty, which it had simultaneously decided to open, had concluded (see paragraph 15 below). That decision, which formed the subject-matter of a notice (95/C 284/03) published in the Official Journal of the European Communities (OJ 1995 C 284, p. 3), was annulled by the judgment of the Court of Justice of 15 April 1997 in Case C-292/95 Spain v Commission [1997] ECR I-1931.15 By a second letter of 6 July 1995, the Commission further informed the Member States of its decision of 5 July 1995 to propose to them, in the light of the judgment in Spain v Commission, to reintroduce the Community framework for a period of two years whilst making a number of amendments thereto, in particular the raising of the notification threshold to 17 million ecus (see Notice 95/C 284/03, cited above). The new text of the proposed Community framework provided, at Point 2.5, that: “The appropriate measures shall enter into force when all Member States have signalled their agreement or at the latest by 1 January 1996. All aid projects, which have not yet received a final approval by the competent authority by that date, shall be subject to prior notification.” The German Government gave its approval to that réintroduction of the Community framework by letter of 15 August 1995.’
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