Brussels, 24/04/2008 (Agence Europe) - In a ruling delivered on Tuesday 22 April, the Court of Justice of the European Communities annulled the ruling of the Court of First Instance on state aid to the steel-making companies of the Salzgitter AG group. The Court was of the opinion that the analysis of the Court of First Instance in this case was not adequate; no decision has yet been taken in the case, it has been returned to the Court of First Instance so that analysis failures can be rectified.
The case concerns whether German law in force between 1971 and 1995 and known as the Zonenrandförderungsgesetz or ZRFG (law on the development of the border zone between the former German Democratic Republic and the Former Czechoslovak Socialist Republic). Under Article 3 of this law, Salzgitter AG, Preussag Stahl AG and the group's ECSC subsidiaries (now combined under the name SAG- Stahl und Technologie) were granted special depreciation allowances and tax-free reserves in respect of eligible bases of DM484 million and DM367 million respectively. The ZRFG expired in 1995, but the Commission decided in 2000 that the tax breaks granted did not comply with Community state aid law (decision 2000/797/ECSC); and should, therefore, be repaid, with interest. Germany and SAG appealed to the Court of First Instance against this decision, and, in July 2004, the Court of First Instance annulled the main points of it (T-308/00). The Commission, in turn, appealed to the Court against this decision, claiming that its decision had been correct and that the money had to be recovered by the German state. That is what led to the present decision.
The Court stated in its judgment on Tuesday that the Commission's appeal was well-founded. The Court of First Instance, it said, did not properly analyse the merits of the complaint. In particular, deeper analysis of the facts was needed to determine whether or not the Commission's reaction to the matter came so late that it deprived SAG of “legal certainty”, that is, the company was left too long in a position of uncertainty. Were that the case, the Commission would have “manifestly failed to act and clearly breached its duty of diligence in the exercise of its supervisory powers” and its decision void. If the Commission was not in the wrong on this point, the Court said that SAG's argument, that part of the aid was to be used for environmental purposes - which would bring it into line with Community law - would have to be verified. The Court can only comment on the ruling of the Court of First Instance on points of law, since it cannot rule on the basic issues in appeal procedures. For this reason, the Court sent the case back to the Court of First Instance, rather than rule on it itself. (C.D.)