Brussels, 28/02/2013 (Agence Europe) - On Thursday 28 February, the European Court of Justice(C-246/12 P), upheld the Commission's 2006 decision requiring Greece to recover 16 payments of operational aid worth €310 million. This aid was paid to the Greek shipyards Ellinika Nafpigeia AE (EN) in Skaramangkas and is considered to contravene the rules because it funded the civilian activities of these shipyards in violation of competition rules.
The company went to the Court to appeal against the decision made by the General Court (T-391/08), which confirmed the Commission's decision for the first time in 2012. According to EN, the General Court had committed a legal mistake because it considered that the aid had benefited civil material production activities, without examining them on a case-by-case basis, in order to verify what was necessary for exercising the activities of the shipyards for military purposes. The company considers that the shipyards constituted a complex enterprise and that the activity for civilian purposes was necessary for the viability of the military side for the business, although the latter predominated. Consequently, a complete halt on the civilian side of the business in the shipyards would have compromised the possibility of military production continuing.
In its ruling, the Court pointed out that the treaty allowed member states to take measures to protect essential security interests (production or the trade in weapons and war materials) but that the recognition of this protection should not affect competition with regard to products not specifically used for military ends. The treaty makes a clear distinction between the production and trade in war materials and all other economic activities when the same company is active in military and civilian areas. On this basis, the Court considers that the General Court had correctly: rejected EN's argument according to which, when a civilian activity is a “necessary corollary” of military production activities, any aid measure should be excluded from the scope of the treaty's application; - concluded that only aid stemming from military activity should be assessed according to the special procedure included in the treaty. Its assessments regarding the distribution of military and civilian activities (75% and 25% respectively) maintained in the Commission decision were purely factual and, therefore, outside the jurisdiction of the Court. Finally the General Court was right to point out that, in the context of the administrative procedures carried out by the Commission, EN did not have defence rights (like those enjoyed by member states) but only the right to be involved in this activity (which was what effectively happened). For all these reasons, the Court rejected the appeal by EN and upheld the Commission's decision. (FG/transl.fl)