Stichting Woonlinie and Others v European Commission (C-414/15 P)

Contents

Judgment of the Court (First Chamber)15 March 2017^note(Appeal — State aid — Existing aid — Article 108(1) TFEU — Aid schemes in favour of social housing corporations — Regulation (EC) No 659/1999 — Articles 17, 18 and 19 — Assessment by the Commission of the compatibility with the internal market of an existing aid scheme — Proposal of appropriate measures — Commitments given by the national authorities in order to comply with EU law — Compatibility decision — Scope of judicial review — Legal effects)In Case C‑414/15 P,APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 24 July 2015,Stichting Woonlinie, established in Woudrichem (Netherlands),Woningstichting Volksbelang, established in Wijk bij Duurstede (Netherlands),Stichting Woonstede, established in Ede (Netherlands),represented by L. Hancher, E. Besselink and P. Glazener, advocaten,the other parties to the proceedings being:European Commission, represented by S. Noë and P.J. Loewenthal, acting as Agents,Kingdom of Belgium,Vereniging van Institutionele Beleggers in Vastgoed, Nederland (IVBN), established in Voorburg (Netherlands), represented by M. Meulenbelt, advocaat,THE COURT (First Chamber),composed of R. Silva de Lapuerta, President of the Chamber, E. Regan, J.-C. Bonichot, A. Arabadjiev (Rapporteur) and C.G. Fernlund, Judges,Advocate General: M. Szpunar,Registrar: C. Strömholm, Administrator,having regard to the written procedure and further to the hearing on 7 July 2016,after hearing the Opinion of the Advocate General at the sitting on 27 October 2016,gives the following

Judgment

1By their appeal, Stichting Woonlinie, Woningstichting Volksbelang and Stichting Woonstede request the Court to set aside the order of the General Court of the European Union of 12 May 2015, Stichting Woonlinie and Others v Commission (T‑202/10 RENV, not published, ‘the order under appeal’, EU:T:2015:287), by which the General Court dismissed their action for partial annulment of Commission Decision C(2009) 9963 final of 15 December 2009 relating to State aid No E 2/2005 and N 642/2009 — The Netherlands — Existing and special project aid to housing corporations (‘the decision at issue’).

Legal context

Regulation (EC) No 659/1999

2Article 17 of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 1999 L 83, p. 1), entitled ‘Cooperation pursuant to Article [108(1) TFEU]’, provides:1. The Commission shall obtain from the Member State concerned all necessary information for the review, in cooperation with the Member State, of existing aid schemes pursuant to Article [108(1) TFEU].2. Where the Commission considers that an existing aid scheme is not, or is no longer, compatible with the common market, it shall inform the Member State concerned of its preliminary view and give the Member State concerned the opportunity to submit its comments within a period of one month. In duly justified cases, the Commission may extend the prescribed period.’

3Article 18 of that regulation, relating to the proposal for appropriate measures, provides:‘Where the Commission, in the light of the information submitted by the Member State pursuant to Article 17, concludes that the existing aid scheme is not, or is no longer, compatible with the common market, it shall issue a recommendation proposing appropriate measures to the Member State concerned. The recommendation may propose, in particular:(a) substantive amendment of the aid scheme, or(b) introduction of procedural requirements, or(c) abolition of the aid scheme.’

4Article 19 of that regulation, relating to the legal consequences of a proposal for appropriate measures, provides:1. Where the Member State concerned accepts the proposed measures and informs the Commission thereof, the Commission shall record that finding and inform the Member State thereof. The Member State shall be bound by its acceptance to implement the appropriate measures.2. Where the Member State concerned does not accept the proposed measures and the Commission, having taken into account the arguments of the Member State concerned, still considers that those measures are necessary, it shall initiate proceedings pursuant to Article 4(4). Articles 6, 7 and 9 shall apply mutatis mutandis.’

Background to the dispute and the decision at issue

5The facts of the dispute, as set out, in essence, in paragraphs 1 to 12 of the order under appeal, may be summarised as follows.

6The appellants are housing corporations (woningcorporaties, ‘wocos’) established in the Netherlands. Wocos are not-for-profit bodies whose mission is to acquire, build and rent out dwellings aimed mainly at underprivileged individuals and socially disadvantaged groups. Wocos also engage in other activities, such as the construction and lease of flats at higher rents, the construction of flats for sale and the construction and lease of public purpose buildings.

7In 2002, the Netherlands authorities notified the Commission of the European Communities of the general scheme of State aid provided for wocos. The Commission having found that the funding measures for wocos could be classified as existing aid, the Netherlands authorities subsequently withdrew their notification.

8On 14 July 2005, the Commission sent a letter to the Netherlands authorities under Article 17 of Regulation No 659/1999, classifying the general scheme of State aid provided for wocos as existing aid (aid measure E 2/2005) and expressing doubts as to the compatibility of that aid with the common market (‘the Article 17 letter’). First, the Commission indicated that the Netherlands authorities had to amend the public service mission entrusted to wocos, in such a way that social housing would be earmarked for a clearly defined target group of underprivileged individuals or socially disadvantaged groups. It stated that all commercial activities of wocos had to be carried out in accordance with market conditions and should not benefit from State aid. Finally, it stated that the offer of social housing had to be adapted to the requirements of underprivileged individuals or socially disadvantaged groups.

9After the Article 17 letter had been sent, the Commission and the Netherlands authorities commenced the cooperation procedure in order to bring the aid scheme into line with Article 106(2) TFEU. Following those consultations, pursuant to Article 18 of Regulation No 659/1999, the Commission proposed the following as appropriate measures to ensure that the measures in question complied with the provisions of EU law governing State aid:— limiting social housing to a clearly defined target group of underprivileged individuals or socially disadvantaged groups;— carrying out commercial activities on market terms, with public service activities and commercial activities having separate accounts and being adequately audited;— adapting the supply of social housing to the demand from underprivileged individuals and socially disadvantaged groups.

10On 16 April 2007, the Vereniging van Institutionele Beleggers in Vastgoed, Nederland (IVBN) (Association of Institutional Property Investors in the Netherlands) filed a complaint with the Commission concerning the aid granted to wocos. In June 2009, Vesteda Groep BV became a party to that complaint.

11By letter of 3 December 2009, the Netherlands authorities accepted the appropriate measures proposed by the Commission and undertook to reform the general scheme of State aid for wocos in accordance with the Commission’s requirements.

12On 15 December 2009 the Commission adopted the decision at issue.

13The measures included in the general scheme of State aid provided by the Kingdom of the Netherlands to wocos and referred to in the E 2/2005 procedure were the following:(a) State guarantees for loans granted by the Guarantee Fund for the construction of social housing;(b) State aid from the Central Housing Fund, project-based aid or aid for rationalisation in the form of loans at preferential rates or direct subsidies;(c) the sale by municipal authorities of land at prices below market value;(d) the right to obtain loans from the Bank Nederlandse Gemeenten.

14In the decision at issue, the Commission classified each of those measures as State aid within the meaning of Article 107(1) TFEU and took the view that the Netherlands scheme for financing social housing constituted existing aid, that scheme having been created before the EC Treaty entered into force in the Netherlands and the subsequent reforms not having brought about any fundamental change.

15In recital 41 to the decision at issue, the Commission stated:‘Dutch authorities have … made commitments to amend the functioning of wocos and the measures favouring them. For several of the planned changes the Dutch authorities have submitted draft rules to the Commission. The new rules will be implemented with a new ministerial decree from 1 January 2010 and a new Housing Act from 1 January 2011. …’

16The Commission examined the compatibility of aid measure E 2/2005 relating to the scheme for financing wocos, as amended following the series of commitments provided by the Netherlands authorities. It concluded, in recital 72 to the decision at issue, that ‘the aid for the provision of social housing, i.e. the activity of construction and renting out dwellings to individuals, including the building and maintenance of ancillary infrastructure, … [was] compatible with Article 106(2) TFEU’. Consequently, the Commission recorded the Netherlands authorities’ commitments concerning aid measure E 2/2005, in accordance with Article 19 of Regulation No 659/1999.

17On 30 August 2010, the Commission adopted Decision C(2010) 5841 final, relating to State aid E 2/2005, which amended paragraphs 22 to 24 of the decision at issue. In that amending decision, the Commission considered that, on the basis of the available evidence, it could not conclude that measure (d) referred to in the decision at issue, that is to say the right to obtain loans from the Bank Nederlandse Gemeenten, met all State aid criteria.

The proceedings before the General Court and the order under appeal

18By application lodged at the Registry of the General Court on 29 April 2010, Stichting Woonlinie, Stichting Allee Wonen, Woningstichting Volksbelang, Stichting WoonInvest and Stichting Woonstede brought an action under Article 263 TFEU for annulment of the decision at issue, in so far as it relates to aid measure E 2/2005.

19By order of 16 December 2011, Stichting Woonlinie and Others v Commission (T‑202/10, not published, EU:T:2011:765), the General Court rejected that action as inadmissible.

20By judgment of 27 February 2014, Stichting Woonlinie and Others v Commission (C‑133/12 P, EU:C:2014:105), the Court set aside the order of 16 December 2011, Stichting Woonlinie and Others v Commission (T‑202/10, not published, EU:T:2011:765), in so far as it had declared inadmissible the action brought by the applicants at first instance against the decision at issue, in so far as that decision concerned aid measure E 2/2005, and dismissed the remainder of the action. The Court held that the action brought against the decision at issue, in so far as that decision concerned aid measure E 2/2005, was admissible and referred the case back to the General Court for a decision on the merits.

21The case was assigned to the Seventh Chamber of the General Court.

22In accordance with Article 119(1) of the Rules of Procedure of the General Court, the Commission and the applicants at first instance lodged their written observations on 27 March and 15 April 2014 respectively.

23By the order under appeal, the General Court rejected the action as manifestly unfounded.

Forms of order sought and procedure before the Court

24By their appeal, the applicants at first instance claim that the Court should:— set aside the order under appeal in whole or in part;— remit the case to the General Court, and— order the Commission to pay the costs of the appeal and of the proceedings before the General Court.

25The Commission claims that the Court should dismiss the appeal and order those foundations to pay the costs. For the sake of completeness, the Commission submits that, in the event that the Court were to find that the grounds of appeal are well founded, there would be no reason to set aside the order under appeal in its entirety, since those foundations have put forward no complaint against the rejection of the first plea in law at first instance, alleging that the Commission had erred in law in characterising all the measures as forming part of an aid scheme, and it adds that it would in that event be appropriate to remit the case to the General Court.

26By letter lodged at the Court Registry on 21 January 2016, Stichting Allee Wonen and Stichting WoonInvest informed the Court that they were withdrawing their appeal. By order of 21 March 2016, Stichting Woonlinie and Others v Commission (C‑414/15 P, not published, EU:C:2016:229), the President of the Court removed Stichting Allee Wonen and Stichting WoonInvest from Case C‑414/15 P and declared that they and the Commission would bear their own costs corresponding to the appeal lodged by those parties.

The appeal

The first ground of appeal, alleging an error of law, incorrect assessment of the relevant facts and failure to state reasons, in that the General Court considered that the appellants were actually challenging the Article 17 letter and that its review did not extend to that letter

Arguments of the parties

27In the first ground of appeal, directed against paragraphs 56 to 60, 69 to 74, 81, 82, 86 and 87 of the order under appeal, the appellants submit that the General Court wrongly considered that the pleas in law that they had raised before it actually challenged the content of the Article 17 letter. In addition, the General Court, in paragraph 59 of the order under appeal, wrongly inferred from its judgment of 11 March 2009, TF1 v Commission (T‑354/05, EU:T:2009:66), that its review was confined to checking the Commission’s assessment of whether the commitments given were capable of resolving the competition problems found and that it did not extend to the underlying question of the need for the commitments. According to the appellants, it follows from the wording of Article 108(1) TFEU that the Commission’s final decision must contain a determination on that question. That decision covers all of the procedure laid down in Articles 17 to 19 of Regulation No 659/1999. The review by the EU judicature should, consequently, also cover the question whether the earlier situation was compatible with the internal market.

28The Commission contends that a decision under Article 19(1) of Regulation No 659/1999 is not based on the final determination that an existing aid scheme is incompatible with the internal market. Such a decision is the expression of the cooperation referred to in Article 108(1) TFEU and its basic principle is not a unilateral, binding determination by the Commission, but rather the recognition by the latter and the Member State concerned of the need to adapt the existing aid scheme. The Commission is therefore not required to explain in its decision why it considers that such a scheme is not or is no longer compatible with the internal market. Furthermore, in the present case, the exchanges that took place between the Commission and the Netherlands authorities following the Article 17 letter did not concern whether the existing aid scheme was compatible with the internal market, but rather the manner in which that scheme should be adapted.

Findings of the Court

29In paragraphs 56 and 57 of the order under appeal, the General Court considered, referring to paragraphs 188 and 189 of its judgment of 11 March 2009, TF1 v Commission (T‑354/05, EU:T:2009:66), that the Commission enjoyed broad discretion to determine the appropriate measures to respond to its conclusion that the existing aid scheme in question was not, or was no longer, compatible with the internal market and that, consequently, the General Court’s review had to be confined to checking that the Commission had not committed a manifest error of assessment by considering that the commitments given were capable of resolving the competition problems raised by the aid scheme in question.

30The General Court concluded, in paragraph 59 of that order, that its review did not cover the Commission’s examination of the aid scheme prior to the commitments given by the Netherlands authorities. It essentially reiterated that conclusion in paragraphs 73, 82 and 87 of that order.

31In paragraphs 58, 72, 74, 81 and 86 of that order, the General Court considered, in essence, that the appellants were contesting, not the assessment carried out by the Commission in the decision at issue, concerning the compatibility of the existing aid scheme as amended by the commitments given by the Netherlands authorities, but rather the Commission’s examination of the system for financing the wocos as set out in the initial Netherlands legislation, before its amendment by the commitments given by those authorities, and that that examination was not contained in the decision at issue but in the Article 17 letter.

32Consequently, in paragraph 60 of the order under appeal, the General Court rejected as ineffective the appellants’ arguments, put forward in the context of the second plea in law, by which they argued that the Commission, in the Article 17 letter, had merely found that the service of general economic interest (SGEI) was not sufficiently defined, without demonstrating the existence of a manifest error in the Netherlands system for funding social housing; in paragraphs 69 to 75 of that order, it implicitly rejected as ineffective the appellants’ arguments put forward in the context of the third plea in law; in paragraphs 81 and 82 of that order, it rejected as ineffective the argument, put forward in the context of the sixth plea in law, alleging that the Commission had erred by considering that the Netherlands system of social housing contained a manifest error since it did not contain a specific income limit and, in paragraphs 86 to 88 of that order, it implicitly rejected as ineffective the appellants’ fifth and sixth pleas in law.

33In that respect, as far as existing aid is concerned, Article 108(1) TFEU authorises the Commission to keep such aid under constant review in cooperation with Member States. As part of that review, the Commission must propose to the Member States any appropriate measures required by the progressive development or by the functioning of the internal market. In addition, Article 108(2) TFEU provides that if, after giving notice to the parties concerned to submit their comments, the Commission finds that aid is not compatible with the internal market having regard to Article 107 TFEU, or that such aid is being misused, it is to decide that the State concerned must abolish or alter such aid within a period of time to be determined by the Commission.

34According to Article 17(2) of Regulation No 659/1999, if the Commission considers that an existing aid scheme is not, or is no longer, compatible with the common market, it is to inform the Member State concerned of its preliminary view and give the Member State an opportunity to submit its comments within a period of one month.

35According to Article 18 of that regulation, if, in the light of the information submitted by the Member State under Article 17 of that regulation, the Commission concludes that an existing aid scheme is not, or is no longer, compatible with the common market, it is to issue a recommendation proposing appropriate measures to the Member State concerned.

36According to Article 19(1) of Regulation No 659/1999, where the Member State concerned accepts the proposed measures and informs the Commission thereof, the Commission is to record this and inform the Member State thereof.

37Thus, when it adopts a decision, according to Article 26 of Regulation No 659/1999, ‘pursuant to … Article 18 [of that regulation] in conjunction with Article 19(1) [thereof]’, the Commission, in the exercise of its power to assess whether State aid is compatible with the internal market, accepts the State commitments, given in relation to the appropriate measures that the Commission had proposed to it in a recommendation sent under Article 18 of that regulation, as being capable of addressing its concerns regarding the compatibility with the internal market of the existing aid scheme examined, and concludes the examination procedure provided for in Article 108(1) TFEU.

38Such a decision necessarily supposes that the Commission first assessed whether the aid scheme in question was compatible with the internal market and, after taking into consideration the information provided by the Member State concerned, concluded that that scheme was not, or was no longer, compatible with the internal market and that, consequently, appropriate measures were necessary in order to remedy that incompatibility.

39Contrary to the General Court’s conclusion in paragraph 59 of the order under appeal, the assessment that the Commission thus carried out and the conclusion that it drew from that assessment cannot be excluded from review by the EU judicature without undermining the right to effective judicial protection, as guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union, of the beneficiaries of the existing aid scheme.

40A decision taken by the Commission under Article 18 of that regulation in conjunction with Article 19(1) thereof, in that it is based on the preliminary finding that the existing aid scheme is incompatible with the internal market, is liable to harm the interests of the beneficiaries of that scheme.

41In that respect, the Court noted, in paragraph 48 of the judgment of 27 February 2014, Stichting Woonlinie and Others v Commission (C‑133/12 P, EU:C:2014:105), that the decision at issue had the effect of amending, as from 1 January 2011, the date on which the new housing law entered into force, the aid scheme from which, until that date, the appellants had benefited, by making the conditions for the exercise of their activities less favourable than had previously been the case.

42That is why, in paragraphs 56 and 57 of that judgment, the Court held, in essence, that the appellants have a legitimate interest in having the decision at issue annulled in so far as it concerns aid measure E 2/2005, since the annulment of that decision would have the effect of maintaining the previous conditions which were more favourable to them.

43The right to effective judicial protection of the beneficiaries of an existing aid scheme therefore implies that, in the case of an action brought against a decision adopted under Article 18 of Regulation No 659/1999 in conjunction with Article 19(1) of that regulation, those beneficiaries may also contest the Commission’s assessment of that scheme and its conclusion that that scheme is not compatible with the internal market and that, consequently, appropriate measures are necessary in order to remedy that incompatibility.

44As regards the fact, on which the General Court relied in paragraphs 58, 74 and 86 of the order under appeal, that in the present case that assessment is set out, not in the decision at issue but in the Article 17 letter, it must however be noted that, according to settled case-law of the Court, intermediate measures whose aim is to prepare the final decision do not, in principle, constitute acts which may form the subject matter of an action for annulment (judgment of 13 October 2011, Deutsche Post and Germany v Commission, C‑463/10 P and C‑475/10 P, EU:C:2011:656, paragraph 50).

45An action for annulment against measures expressing a provisional opinion of the Commission might make it necessary for the EU judicature to arrive at a decision on questions on which the institution concerned has not yet had an opportunity to state its position and would as a result anticipate the arguments on the substance of the case, confusing different procedural stages both administrative and judicial (judgment of 13 October 2011, Deutsche Post and Germany v Commission, C‑463/10 P and C‑475/10 P, EU:C:2011:656, paragraph 51).

46Likewise, it follows from the case-law that an intermediate measure is not capable of forming the subject matter of an action if it is established that the illegality attaching to that measure can be relied on in support of an action against the final decision for which it represents a preparatory step. In such circumstances, the action brought against the decision terminating the procedure will provide sufficient judicial protection (judgment of 13 October 2011, Deutsche Post and Germany v Commission, C‑463/10 P and C‑475/10 P, EU:C:2011:656, paragraph 53 and the case-law cited).

47In the present case, it can be seen from the decision at issue that the appropriate measures proposed by the Commission pursuant to Article 18 of Regulation No 659/1999 essentially coincide with the indications that the Commission had given to the Netherlands authorities on a preliminary basis in the Article 17 letter. The analysis on which that letter was based was therefore confirmed by the decision at issue.

48Since the Article 17 letter constitutes a first step in the preparation of the decision at issue, the appellants may not be prevented from invoking the unlawfulness of the assessment contained in that letter in support of their action against that decision.

49In those circumstances, it must be found that, by rejecting the appellants’ arguments on the grounds, first, that its powers of review did not extend to the Commission’s examination of the aid scheme before the commitments given by the Netherlands authorities and, secondly, in essence, that that examination did not form part of the decision at issue, the General Court erred in law.

50That finding is not called into question by the Commission’s argument according to which the conclusion that the existing aid scheme is incompatible with the internal market, which formed the basis for the Commission’s decision under Article 18 of Regulation No 659/1999 in conjunction with Article 19(1) thereof, was not definitive.

51It must be noted that, admittedly, owing to the cooperation mechanism between the Commission and the Member States, established by Article 108(1) TFEU, on which the system for reviewing existing aid schemes is based, proceedings brought under that provision, unlike those brought under the first sentence of Article 108(2) TFEU, do not lead to a formal finding that an aid scheme is incompatible with the internal market.

52Nevertheless, the conclusion that the existing aid scheme is incompatible with the internal market and the proposal of appropriate measures that that conclusion necessarily entails produces, once the Commission has recorded the acceptance of those measures by the Member State concerned, the same legal effects as those of such a formal finding as regards that Member State.

53However, since the examination of the compatibility with the internal market of existing aid involves complex economic and social evaluations, the Commission enjoys broad discretion. In that context, judicial review of the manner in which that discretion is exercised is confined to establishing that the rules of procedure and the rules relating to the duty to give reasons have been complied with and to verifying the accuracy of the facts relied on and that there has been no error of law, manifest error in the assessment of the facts or misuse of powers (see, by analogy, judgment of 26 September 2002, Spain v Commission, C‑351/98, EU:C:2002:530, paragraph 74).

54It follows from the foregoing that the first ground of appeal must be upheld.

The second ground of appeal, alleging an error of law, an incorrect assessment of the relevant facts and failure to state reasons, in that the General Court considered that the appropriate measures proposed by the Commission were merely proposals and that it was their acceptance by the Netherlands authorities that had made them binding

Arguments of the parties

55In the context of the second ground of appeal, directed against paragraphs 61 to 66, 78 to 80 and 90 to 95 of the order under appeal, the appellants argue that the General Court disregarded Article 108(1) TFEU and Regulation No 659/1999 by considering, in order to reject the appellants’ arguments concerning the appropriate measures required by the Commission, that those measures were merely proposals and that it was the Netherlands authorities that had made them binding by accepting them. According to the appellants, the judgment of 22 October 1996, Salt Union v Commission (T‑330/94, EU:T:1996:154), on which the General Court relied in paragraph 63 of the order under appeal, concerned the issue of admissibility and is not relevant. Furthermore, the appellants submit that the order under appeal renders ineffective the judgment of 27 February 2014, Stichting Woonlinie and Others v Commission (C‑133/12 P, EU:C:2014:105), in which the Court acknowledged the appellants’ legitimate interest in having the decision at issue annulled.

56The Commission contends that the General Court did take account of Article 108(1) TFEU and of the Commission’s role in the cooperation procedure concerning the examination of the compatibility with the internal market of existing aid schemes. It submits that its role in that procedure is confined to checking whether the commitments given by the Member State concerned are sufficient to render the existing aid scheme compatible with the internal market and it adds that recommendations of appropriate measures are not binding.

57Moreover, according to the Commission, the order under appeal does not render the judgment of 27 February 2014, Stichting Woonlinie and Others v Commission (C‑133/12 P, EU:C:2014:105), ineffective, since it is open to the appellants to challenge the Commission’s application of the concept of State aid and the compatibility of the amended scheme with the internal market.

58In addition, annulment of the decision at issue would not necessarily have the effect of maintaining the situation before the amendment of the general scheme of State aid for wocos, since the decision of the Netherlands legislature to make such a change would be a political decision, based on several considerations. The Member States are free to remove an existing aid scheme, to modify it or to replace it with another scheme that is compatible with the internal market.

Findings of the Court

59In paragraphs 63 and 64 of the order under appeal, the General Court considered, in essence, that the appropriate measures that the Commission may propose under Article 108(1) TFEU and Article 18 of Regulation No 659/1999 are merely proposals that the Member State concerned may accept or refuse and that, if it accepts them, that Member State is required, by that acceptance, to implement them.

60In paragraph 65 of that order, the General Court considered, referring to paragraph 28 of the judgment of 18 June 2002, Germany v Commission (C‑242/00, EU:C:2002:380), and paragraph 52 of the judgment of 4 December 2013, Commission v Council (C‑121/10, EU:C:2013:784), that it is in so far as those proposals for appropriate measures are accepted by a Member State that they are binding on that Member State. It reiterated this assertion in paragraph 79 of that order.

61Consequently, the General Court rejected as manifestly unfounded, in paragraph 66 of the order under appeal, the appellants’ argument, put forward in the context of the second plea in law, that the Commission had acted ultra vires in requiring appropriate measures and rendering them binding in the decision at issue, holding that the appellants wrongly alleged that the Commission had required those appropriate measures and had rendered them binding in that decision and, in paragraphs 78 to 80 of that order, the arguments developed in the context of the fourth and sixth pleas in law, by which the appellants alleged that the Commission had erred in law and abused its powers by requiring the Netherlands authorities to provide a new definition of ’social housing’ and had incorrectly interpreted Commission Decision 2005/842/EC of 28 November 2005 on the application of Article 86(2) of the EC Treaty to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest (OJ 2005 L 312, p. 67) by requiring a specific definition of a SGEI.

62It must be noted, in that respect, that the Court has held that, in the context of the procedure under Article 19(1) of Regulation No 659/1999, it is the Commission’s decision recording the proposals of the Member State which renders those proposals binding (judgment of 27 February 2014, Stichting Woonlinie and Others v Commission, C‑133/12 P, EU:C:2014:105, paragraph 59).

63It follows from the case-law mentioned in paragraph 60 of the present judgment and cited in paragraph 65 of the order under appeal that the appropriate measures that the Commission proposes under Article 108(1) TFEU, in so far as they are accepted by a Member State, are binding on that Member State, as provided in the second sentence of Article 19(1) of Regulation No 659/1999. However, that acceptance produces legal effects only if it is notified to the Commission and the latter records it and informs the Member State thereof, in accordance with the first sentence of Article 19(1) of that regulation.

64It was therefore incumbent on the General Court to examine the substance of the appellants’ arguments mentioned in paragraph 61 of the present judgment, regardless, moreover, of the issue of the respective roles of the Commission and the Member States in the adoption of appropriate measures.

65Accordingly, the General Court erred in law in paragraph 65 of the order under appeal and therefore wrongly rejected as manifestly unfounded the appellants’ arguments mentioned in paragraph 61 of the present judgment.

66As regards paragraphs 90 to 95 of the order under appeal, it must be noted that, contrary to the appellants’ assertions, the General Court did not reject, in those paragraphs, the appellants’ arguments concerning the appropriate measures required by the Commission, but rather examined the arguments put forward in support of the appellants’ eighth plea in law. By that plea in law, the appellants alleged that the Commission had abused the procedure in relation to existing aid schemes and exceeded its powers by approving an exhaustive list of buildings that could be classified as ’social property’, even though it had not made recommendations as regards the preparation of such a list in either the Article 17 letter or in the proposals for appropriate measures.

67Accordingly, in so far as the appellants allege, by the second ground of appeal, that the General Court considered that the measures proposed by the Commission were merely proposals and that it was the acceptance of those proposals by the Netherlands authorities that rendered them binding, that ground of appeal is incapable of calling into question the assessments contained in paragraphs 90 to 95 of the order under appeal.

68In those circumstances, the second ground of appeal must be upheld in so far as it concerns the considerations in paragraphs 61 to 66 and 78 to 80 of that order.

69It follows from all the foregoing that the order under appeal must be set aside.

Referral of the case back to the General Court

70According to the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, the latter may, where the decision of the General Court has been annulled, either itself give final judgment in the matter, where the state of the proceedings so permits, or refer the case back to the General Court for judgment.

71In the present case, since the General Court did not carry out the review of the decision at issue that it was required to carry out and since it did not examine the substance of the appellants’ arguments mentioned in paragraph 61 of the present judgment, regardless of the issue of the respective roles of the Commission and of the Member States for the adoption of the appropriate measures, the Court considers that the state of the present proceedings does not permit it to give final judgment. Accordingly, the case must be referred back to the General Court.

Costs

72Since the case has been referred back to the General Court, the costs relating to the present appeal proceedings must be reserved.

Operative part

On those grounds, the Court (First Chamber) hereby:

1.Sets aside the order of the General Court of the European Union of 12 May 2015, Stichting Woonlinie and Others v Commission (T‑202/10 RENV, not published, EU:T:2015:287);

2.Refers the case back to the General Court of the European Union;

3.Reserves the costs.