Court of Justice of the European Communities (including Court of First Instance Decisions)

'Any agreement providing for an indemnity for the buyers by the State or the Patrimonio del Estado for an obligation imposed by this Decision to reimburse aid shall not be carried out.'

'53 The Commission observes at the eighth paragraph of part VI of the decision at issue that:

"Even if the aid in question were to be considered as regional, it would not however be eligible for compatibility under Article 92(3)(a), because aid granted pursuant to the provisions of that Article must contribute to the long-term development of the region - this notably means in this case that the aid must at least serve for restoring the company's viability, an objective not attained for Hytasa in the light of the information submitted so far to the Commission (this aspect was already discussed in part IV above) - without having unacceptable negative effects on competition conditions within the Community."

54 Part IV of the decision at issue, to which the Commission refers, concerns the question of ascertaining to what extent the measure in question contained State aid elements within the meaning of Article 92(1) of the Treaty. It does not deal with the question of the restoration of the viability of Hytasa.

55 Nor is that question referred to in part III of the decision. After summarising the contents of the two restructuring plans, the Commission questions, in the 16th paragraph, the validity of the statements put forward by the Spanish authorities and the forecast results. According to the Commission, the several contradictions noted between the two plans did not allow it to share the optimistic forecasts in the conclusion of the revised plan (same paragraph). The Commission does not however put forward any specific argument on that point other than that the new restructuring plan would not ensure the viability of Hytasa.

56 Finally, the Commission states in the ninth paragraph of part VI that the question of ascertaining whether the investment projects are in line with the interest of the Community and of ascertaining whether they contribute to a sound restructuring of the company are "discussed further below". In fact, the Commission discusses below the adverse effects of the aid on the conditions of competition without analysing the impact of the revised plan on the restoration of Hytasa's profitability. Such an analysis was necessary in the present case, particularly because the plan provided for a substantial redirection of production towards the manufacture of clothing.

57 It must therefore be concluded that the Commission's analysis of the compatibility of the aid in question with Article 92(3)(a) of the Treaty does not meet the criteria established by itself.

58 The second paragraph of Article 2, and Articles 3, 4 and 5 of the decision concerning the undertaking Hytasa must therefore be annulled.'

'In accordance with the judgment of the Court of Justice of 14 September 1994 (in Case C-278/92), annulling a number of articles of the Commission's Decision of 25 March 1992, the Commission is preparing a new draft of its definitive decision in the procedure initiated pursuant to Article 93(2) of the EC Treaty ... which, in accordance with that judgment, is still open. The draft will be submitted soon to the College of Commissioners for adoption.'

concluded, in the 25th paragraph of Part III, that the derogation provided for in Article 92(3)(c) was no longer applicable.

'The Commission's view that the abovementioned restructuring plan did not render the company viable is confirmed by the financial interventions in its favour in which the Spanish authorities had to engage after 1992. The restructuring plan was never implemented. Following the bankruptcy of one of the owners, Hilaturas Gossypium, Improasa, the executive company of Patrimonio del Estado, acquired 30% of MTT's shares in 1992. Several properties belonging to MTT were mortgaged in favour of Improasa for some PTA 726 million. Improasa also acquired promissory notes issued by MTT for some PTA 4 660 million.

In 1992, two credits amounting to PTA 300 million were given to the company by the Instituto de Fomento de Andalucía (IFA), as part of an aid scheme approved by the Commission. MTT finds itself at present in financial straits, with liabilities worth some PTA 10 000 million, so that it has been decided by the competent Spanish authorities to suspend indefinitely the payments of the company, with a view to its liquidation and the subsequent sale of its assets to pay its debts.'

Breach of Articles 93 and 174 of the Treaty

had merely adopted a decision without setting out the reasons for its adoption. In the present case, however, the Court criticised the Commission for not having done what was necessary to adopt a decision having a tenor consistent with the criteria laid down in Article 92 of the Treaty.

the final decision and not to the acts preliminary to its adoption. Consequently, repetition of those preliminary acts was not necessary.

Infringement of the right to be heard and of the principles of legal certainty and of the protection of legitimate expectations

post perspective is not liable to change the outcome of the case. That analysis merely confirms the analysis contained in the previous paragraphs (19th to 25th paragraphs) finding that the restructuring plan submitted by the Spanish authorities did not ensure the long-term viability of the undertaking. In those circumstances, no infringement of the right to be heard can be held to have occurred.