15.12.98 EN Official Journal of the European Communities C 390/7

STATE AID CØ42/98 (ex NNØ54/95) Germany

(98/C 390/04) (Text with EEA relevance)

(Articles 92 to 94 of the Treaty establishing the European Community)

Commission notice pursuant to Article 93(2) of the EC Treaty to other Member States and interested parties on aid for setting up CD Albrechts GmbH, Thuringia, former Pilz Group, Bavaria

In the letter reproduced below, the Commission Pilz actually consists of a group of companies. The informed the German Government of its decision to group is owned by Mr Reiner Pilz and his family. They initiate proceedings under Article 93(2) of the EC had set up the holding company R.ØE. Pilz GmbHØ@ØCo. Treaty. Beteiligungs KG, Kranzberg, which held the shares of the joint venture.

‘1.ÙPROCEDURAL ASPECTS The other parent company, Robotron AG, was liquidated by the THA in 1992 and the Pilz group took With letters dating 9 November 1994 and 3 March 1995 over its shares in the joint venture. Due to the fall of the the German authorities notified aid measures in favour East European market the joint venture, which had been of the abovementioned enterprises. Many questions integrated in the Pilz group, had serious sales problems remained open and on further requests for information and the forthcoming bankruptcy put the whole Pilz the German Government replied with letters dated 22 group in jeopardy. No private investor could be found August 1995 and 18 January 1996. After several further and in order to avoid the opening of bankruptcy informal requests, the Commission directed a catalogue proceedings two public financing institutions of of questions to the German authorities with a letter Thuringia, TIB (Thüringer Industriebeteiligungs GmbH) dated 25 November 1996 which was answered by letter and TAB (Thüringer Aufbaubank) took over the joint dated 17 April 1997. During a meeting on 22 and 23 venture with a contract of 7 March 1994. TIB’s partici- September 1997 in representatives of the German pation was 98Ø% and TAB’s participation was 2Ø%. Government answered further questions and at their Afterwards the joint venture changed its name and was request the Commission agreed that a final statement converted into CD Albrechts GmbH. In 1994 it would be submitted in writing. This reached the produced losses of DEM 109 million and in 1995 debts Commission by letter dated 20 January 1998. amounted to DEM 134 million. The joint venture employed about 250 workers, which were reduced to approximately 220 in 1997. To the Commission’s 2.ÙBACKGROUND knowledge the Pilz group employed more than 550 workers but the exact number of employees is unknown. Figures concerning balance sheets, profit and loss 2.1.ÙThe beneficiaries accounts, etc. have not been submitted.

Aid measures served to establish PilzØ@ØRobotron Since the beginning of 1994 the Land of Thuringia has GmbHØ@ØCo. Beteiligungs KG, Albrechts (hereafter: tried to sell the joint venture expecting sales proceeds of joint venture) which was the joint venture between an up to DEM 160 million. The final attempt to sell to a east German company, the computer technology Japanese company failed since the potential investor was company of the GDR, VEB Robotron, , and a put off, in particular, by a possible recovery claim of west German company, Pilz, situated in Kranzberg, illegally awarded State aid. Bavaria. Pilz took over one third, Robotron took over two thirds of the joint venture. In 1992, as part of the joint venture, a plant for manufacturing CDs, speakers Meanwhile TIB and TAB have tried to consolidate the and trays was built in Albrechts, Thuringia an area situation of the joint venture, which, in particular, has eligible for regional aid pursuant to Article 92(3)(a) of suffered from its legal links to the Pilz group and from the EC TreatyØ(Î). The plant started its operations in the reputation associated with Pilz. Thus, in 1996 TIB December 1992. founded a 100Ø% subsidiary company, CDA Datenträger Albrechts GmbH. On 31 December 1997 this new legal entity bought the assets of the joint venture and took over all its operational activities. However, the joint (Î)ÙNØ464/93; NØ613/96, valid till the end of 1999. venture has remained legal owner of the premises, C 390/8 EN Official Journal of the European Communities 15.12.98

buildings, infrastructure, etc., which now are being let to Therefore, also, the information submitted by the CDA Datenträger Albrechts GmbH. The German auth- German authorities remained highly contradictory and orities informed the Commission that in 1997 the new mostly incomprehensible and there were no results at company expected [.Ø.Ø.]Ø(Ï) for 1998 a positive annual hand from the enquiries of the prosecution office. result and [.Ø.Ø.] are foreseen. The German Government has pointed out that a recovery of any aid from the joint venture would inevitably result in bankruptcy since it is 2.2.ÙThe aid measures overindebted. Concerning these most recent devel- opments no further information was made available, 2.2.1.ÙAid measures in connection with the [.Ø.Ø.]. Due to this lack of information the Commission is initial phase (1991/1992) in no position to evaluate the effect and circumstances of this transaction. Investment costs for establishing the CD plant in Thuringia were estimated at a total of DEM 263 million. Of which R.ØE. Pilz GmbHØ@ØCo. Beteiligungs KG, the holding company owned by Pilz, contributed Meanwhile, in July 1995, the Pilz group had filed for approximately DEM 88 million which corresponded to bankruptcy. It should be noted that the former holding its one third share in the joint venture. The remaining company of the joint venture, R.ØE. Pilz GmbHØ@ØCo. costs of DEM 175,5 million, corresponding to Beteiligungs KG, does not legally belong to the group as Robotron’s two thirds share in the joint venture, were such and is not involved in the pending bankruptcy brought up by means of loans as described below. procedure. In February 1995 the public prosecution office of Bavaria intervened against the Pilz group on the charges of defrauding of subsidies. The indictment was The entire financing of the project was arranged in a extended to fraudulous bankruptcy and fraud in 40 credit contract which, on 17 May 1991, was concluded cases. Owing to the complications of the financial trans- between a consortium of private banks (Dresdner Bank actions and the non-transparent structure within the Pilz AG, Frankfurt/M.; Bayerische Vereinsbank AG, group the court hearing only started in April 1997. München; Berliner Bank AG, ; Westfalenbank AG, Bochum) on one side as lender, and Robotron AG, R.ØE. Pilz GmbHØ@ØCo. Beteiligungs KG and the joint venture itself on the other side as borrowers. The contract (Ï)ÙBusiness secret. covered loans totalling DEM 285,15 million as follows:

(in million DEM) Beneficiary Robotron AG Joint venture Pilz

I 2,0Ø(*)

II 153,0Ø(**)

III 1,0Ø(*)

IVa 65,85Ø(**)

IVb 10,8Ø(**)Ø(&)

V 20,0Ø(*)

VI 10,0Ø(*)

VII 22,5Ø(**)

Total 22,0 175,5 87,65

(*)ÚSubsequent contribution to the joint venture (DEM 33 million nominal capital of the joint venture). (**) Covering the investments. (&) Bridge financing until the investment grants and tax refunds were paid out. 15.12.98 EN Official Journal of the European Communities C 390/9

Pilz brought up its DEM 88 million contribution by 0,25Ø% and subsequently 0,5Ø% p.a. The THA had means of investment grants and tax refundsØ(Ð) (bridged intervened for the guarantee with an amount of DEM by the abovementioned credit No IVb) and supposedly 120 million. contributed DEM 11 million of its own money. The rest of the DEM 88 million was covered by the DEM 65,85 Owing to the fact that investment grants and tax refunds million loan No IVa (extended according to the needs of awarded to R.ØE. Pilz GmbHØ@ØCo. Beteiligungs KG the company, interests varied but the minimum was set at were higher than expected, the banks have extended the 7Ø%). This loan was secured by an 80Ø% deficiency DEM 65,85 million loan only to an amount of DEM guarantee (DEM 52,72 million) by the Land Bavaria 54,7 million. In return, the Land Bavaria has changed its based on an approved aid schemeØ(Ñ). original 80Ø% deficiency guarantee (DEM 52,72 million) to a 100Ø% deficiency guarantee (DEM 54,7 million) in 1994. In March 1994 Bavaria had been held liable for the In 1992, based on the THA-measures aid schemes of credit with DEM 3 million for the first time. This DEM 1991 and 1992 (approved by the CommissionØ(Ò)) the 3 million claim for repayment of the loan, which in this THA awarded a DEM 190 million 100Ø% deficiency context had been assigned to Bavaria by law was waived. guarantee, covering the major part of the loans (credits A second and final time, in July 1995, due to the I, II, V and two thirds of VII) to Robotron AG and the insolvency of R.ØE. Pilz GmbHØ@ØCo. Beteiligungs KG, joint venture. The initial fee for the guarantee was the Land Bavaria had to repay the credit entirely and subsequently became a creditor of R.ØE. Pilz GmbHØ@ØCo. Beteiligungs KG by legal subrogation. (Ð)ÙJoint task of improvement of regional economic structures, 20 and 21 Rahmenplan. (Ñ) Gesetz über die Übernahme von Staatsbürgschaften und As can be seen from the above, aid measures in Garantien des Freistaates Bayern. connection with the establishing of the CD plant (Ò)ÙState aid NNØ108/91 SG(91) D/17825; State aid E 15/92. amounted initially to a minimum of DEM 258,7 million.

Overview of aid measures

Measure Amount Beneficiary Awarding body Date Legal basis in million DEM

1 100Ø% deficiency 54,7 R.ØE. Pilz GmbH @ Bavaria 1991 Gesetz über die Über- guarantee (initially Co. Beteiligungs KG nahme von Staatsbürg- 80Ø% guarantee cov- schaften und Garantien ering DEM 52,72 des Freistaates Bayern million of DEM 65,85 million (credit No IVa))

2 100Ø% guarantee 190,0 Robotron AG, joint THA 1991 THA-regime venture

3 Investment grants, tax MinimumØ(Î) Robotron, Pilz Bavaria, 1992 Joint task of improve- refunds 11,0 Thuringia ment of regional economic structures

4 Waiver 3,0 R.ØE. Pilz GmbH @ Bavaria 1994 None Co. Beteiligungs KG

Total 258,7

(Î)ÙThe Commission has not been informed as to the exact amounts but it can be supposed that the total exceeds the initially intended DEM 11 million. C 390/10 EN Official Journal of the European Communities 15.12.98

At this point the Commission would like to point out bearing loan (7Ø%, repayable until 31 March 1996 that there is still a lack of information and your auth- respectively 30 March 1996) to the joint venture. The orities are asked to describe the circumstances and back- first loan was used to pay back a proprietor’s loan by ground of all measures in detail (i.e. the number of the R.ØE. Pilz GmbHØ@ØCo. Beteiligungs KG, which for its applied aid schemes, the exact amounts etc.). part used the money to repay the loan that had been secured by Bavaria. DEM 5 million of the second loan 2.2.2.ÙAid measures in connection with the served to reduce the loan, which had been secured by the companies’ difficulties and restructuring THA and the remaining DEM 2 million was needed as (1993 until the present day) working capital. By a contract of June 1994 the LfA awarded a DEM 15 As early as 29 September 1993 TAB awarded the joint million interest bearing loan (7,5Ø%, repayment due on venture a DEM 20 million interest bearing loan (7Ø%, 31 December 1994, additional time for payment until 30 duration 21 March 1996) covering liquidity gaps, and a June 1995, meant as working capital) to the Pilz group. loan of DEM 25 million (7Ø%, duration 31 March 1996), The companies of the group were jointly and severally serving to repay the loan which had been secured by the liable for the repayment of this loan. Also, in October THA. Meanwhile, TAB has withdrawn to a lower rank 1994, TAB awarded a DEM 15 million interest-bearing concerning its claims for repayment of these two loans. loan (7,5Ø%, repayment due on 30 April 1995, liquidity help) to the joint venture. Those two loans were Within the frame of the take-over in March 1994 by supposed to bridge the time until an investor, willing to TAB/TIB, they agreed to pay a total of DEM 15 buy the joint venture, could be found. million. TIB paid DEM 3 million as purchase price for its shares to R.ØE. Pilz GmbHØ@ØCo. Beteiligungs KG To the Commission’s knowledge the joint venture and DEM 12 million was paid as a capital injection to received its final financial assistance in January 1995 the joint venture; of which DEM 7,6 million served to when the TAB awarded an interest bearing loan of DEM pay back the loan secured by the THA and the 9,5 million (7,5Ø%, repayment due on 30 April 1995, remaining DEM 4,4 million served as working capital. In extended only with an amount of DEM 7 million). April 1994 TIB awarded another DEM 3,5 million interest bearing liquidity loan to the joint venture It must be noted that to date the German Government (interest 7,5Ø%). has failed to submit a clear and precise description of the measures. From the information available the By a contract dated 8 March 1994 Bavaria, via the LfA Commission has concluded however that aid measures (Bayerische Landesbank für Aufbaufinanzierung), from 1993 to 1995 amounted to a minimum of DEM awarded a DEM 2 million and a DEM 7 million interest 112 million.

Overview of aid measures

Measure Amount Beneficiary Awarding body Date Legal basis in million DEM

1 Loan 20,0 Joint venture THA 29.9.1993 None 2 Loan 25,0 Joint venture THA 29.9.1993 None 3 Purchase price 3,0 R.ØE. Pilz GmbH @ TIB 7.3.1994 None Co. Beteiligungs KG 4 Capital injection 12,0 Joint venture TIB 7.3.1994 None 5 Loan 3,5 Joint venture TIB April 1994 None 6 Loan 2,0 Joint venture Bavaria 8.3.1994 None 7 Loan 7,0 Joint venture Bavaria 8.3.1994 None 8 Loan 15,0 Pilz group Bavaria June 1994 None 9 Loan 15,0 Joint venture THA October 1994 None 10 Loan 9,5 Joint venture TAB January 1995 None

Total 112,0 15.12.98 EN Official Journal of the European Communities C 390/11

Consequently, from 1991 to date, in connection with the compound rate of 13,5Ø% from 1985 to 1991. In 1992, establishing, construction and operation of the CD plant sales decreased by –Ø6,6Ø%, partly because of the general in Albrechts, the German authorities have provided European economic downturn which occurred at that financial assistance amounting to a minimum of DEM time. From 1992 to 1994, the market recovered and the 370,7 million. This amount, however, does not include annual growth rate stood at almost +Ø7,5Ø%. In 1994 any financial transactions within the frame of the the EU music industry experienced a nominal growth take-over of the joint venture’s assets and activities by rate in retail sales of nearly 9Ø%. CDA Datenträger Albrechts GmbH.

In spite of numerous requests by the Commission the There is intra-Community trade between Member States background and details of most measures have remained and the music industry remains highly competitive. With in oblivion and the information provided remains regard to capacity issues and the duplication process, incomplete and conflicting. Therefore, the Commission over 74 CD production plants exist within the EU. will send to the German authorities a catalogue of Competitiveness in duplication is a direct function of questions listing precisely all the information required. economies of scale, thus driving industry consolidation The circumstances of the most recent development in across Europe. General economic conditions have an connection with the take-over of the joint venture’s impact on the demand for music recordings since there is assets and activities by CDA Datenträger Albrechts a clear relationship between the economic health of indi- GmbH are uncertain. Also unknown is the extent to vidual economies and growth in music spending. which the respective loans have been repaid or extended According to industry experts, it is expected that music (on the basis of the submitted information DEM 15,1 sales in the EU should increase at an annual rate of 4Ø% million of the loans secured by the THA and DEM 2 over the period 1995 to 2000, compared to a rate of 1Ø% million of the loan secured by Bavaria have been repaid). in North America, 17Ø% in Asia and over 30Ø% in Eastern Europe.

2.3.ÙContribution by the pool of private banks 3.ÙASSESSMENT In addition to the loans mentioned above the bank consortium waived claims of DEM 12 million and universally reduced the interest rates for all outstanding The granting of State resources to an undertaking loans of the joint venture and the Pilz group to 7Ø% in operating in the above named sector either distorts or 1994. Furthermore, the German Government informed threatens to distort competition and therefore falls under the Commission that the bank consortium awarded a the scope of Article 92(1) of the EC Treaty and Article new DEM 8 million interest-bearing loan to the Pilz 61(1) of the EEA Agreement. There is no doubt that the group without intervention by public hands. measures awarded by the THA, TAB, TIB, Bavaria, or Thuringia constitute State aid in the meaning of Article 92(1) of the EC Treaty since the measures are derived from State resources, threaten to distort competition or 2.4.ÙMarket analysis (Ó) affect trade between Member States. This also accounts for the purchase price of DEM 3 million and the DEM 12 million contribution in the frame of the take-over by The record industry ranges from the selection, TIB/TAB. A private investor would not have granted management and production of artists to the manufac- these benefits to an overindebted company on the edge turing, marketing and distribution of LPs or singles of bankruptcy and the Commission has not been able to recorded on compact disc, vinyl disc and compact verify whether the amounts are adequate and reflect the cassette. The world market for music recordings amounts actual value. Therefore, the measures convey an to nearly ECU 30 billion while, in 1995, sales of music advantage the enterprises would not have acquired recordings represented ECU 8,8 billion in the EU-15, i.e. without the help of the public authorities. 30Ø% of world sales. Germany, the UK, and France represent almost 68Ø% of EU-15 consumption and about 20Ø% of the world market. Three European groups control over 40Ø% of the world market: Bertelsmann Music Group, EMI Music, and PolyGram. At the present stage, due to insufficient information, the Commission is not in a position to conclude with certainty the same for the financial assistance of the banks and the establishment of the new enterprise CDA Worldwide, CDs have sold more than 1,7 billion units in Datenträger Albrechts GmbH. There is however a strong 1994 and further growth is still expected. In nominal indication that the waiver of claims, the award of the value terms, EU sales have increased at an annual new loan to the Pilz group, and the reduction of the interest rates convey an advantage to the joint venture as (Ó)ÙPanorama of EU Industry 1997, NACE (Revision 1) 92.32. well as the Pilz group. The same accounts for the C 390/12 EN Official Journal of the European Communities 15.12.98

arrangements in connection with CDA Datenträger The German authorities regard the Commission’s Albrechts GmbH. As the Commission has not been decisions on the activities of the THA of 1991 and 1992 informed of any effects, details of the transactions, or as the legal basis for the 100Ø% guarantee of the THA to background the German Government is asked to submit Robotron AG and the joint venture. The Commission, the information necessary to decide whether the however, has serious doubts as to whether the THA measures involve State aid or not. regime can be applied to this measure. In its decision of 1991 the Commission only included activities of the THA related to the managing, selling or closing down of The Commission regrets the fact that the German auth- THA-held companies in the former GDR. The 1992 orities have failed to fulfil their obligations within the decision clarifies certain points and also deals with repri- meaning of Article 93(3) of the EC Treaty by awarding vatisations, but does not expand the scope of the THA parts of the aid without notification to the Commission regime to include the creation of new joint ventures. In and without awaiting the Commission’s decision. The aid the present case the measures served to build a new plant has therefore been awarded illegally to the beneficiaries. on the territory of the new Länder and had the intention of creating jobs and attracting further business but cannot be regarded as a typical management task with the aim of privatisation. Therefore, the Commission rather concludes that the THA regime does not apply to 3.1.ÙDerogation this aid but needed to be notified pursuant to Article 93(3) of the EC Treaty as explicitly requested in the two decisions. Certain derogations from the general principle of incom- patibility of State aid under Article 92(1) of the EC Treaty are contained in Articles 92(2) and 92(3) of the EC Treaty. Furthermore, part of the measures were 3.1.2.ÙGeneral State aid rules apparently awarded under aid schemes which had already been approved by the Commission, thus would have to be regarded as existing aid and would not need further assessment. The exceptions set out in Article 92(2)(a) and (b) of the EC Treaty do not apply in this case in view of the features of the aid and the fact that it does not seek to 3.1.1.ÙMeasures under approved aid schemes satisfy the conditions for application of those exceptions.

The legal basis for the 80Ø% guarantee of Bavaria for R.ØE. Pilz GmbHØ@ØCo. Beteiligungs KG was the The CD plant is located in an area eligible for regional approved aid scheme Gesetz über die Übernahme von aid pursuant to Article 92(3)(a)Ø(Ô). Aid to promote the Staatsbürgschaften und Garantien des Freistaats Bayern. economic development of areas where the standard of The award of the measure complied with this regime, it living is abnormally low or where there is serious under- did not need to be notified and at the time of the award employment may be considered compatible with the was legal. Nevertheless, the Commission has considered common market. In this case, however, there are serious the fact that the public prosecution office intervened doubts as to whether the aid contributes to the against the Pilz group on the charges of defrauding of promotion of the economic development of the region subsidies. This indicates that the aid has been misused since the aid partially serves to compensate losses and the in derogation of the Commission’s approval. The Commission has no indications to what extent the funds Commission also has serious doubts whether the have actually been used for investments and job creation. measures in connection with this guarantee, i.e. changing it into a 100Ø% deficiency guarantee and increasing the guaranteed amount from DEM 52,72 million to DEM 54,7 million, were covered by the aid scheme. The Commission has serious doubts that the aid measures comply with the different horizontal Community guidelines on State aid to enterprises. R.ØE. Pilz GmbHØ@ØCo. Beteiligungs KG received investment grants and tax refunds which found their legal basis in the approved aid scheme ‘‘Joint task of improvement of regional economic structures, 20 and 21 The objective of the aid measures does not seem to be Rahmenplan’’. However, the Commission has no the promotion of regional development but the rescue information about the exact amounts of the grants and and the restructuring of firms in difficulty. Therefore, tax refunds or about the basis for the calculation of these the Commission considers in particular the derogation as amounts. In view of the whole circumstances of the case foreseen by Article 92(3)(c) of the EC Treaty, ‘‘aid to and the pending prosecution there are sufficient grounds facilitate the development of certain economic activities, for doubts as to whether the aids were used as approved by the Commission. (Ô)ÙNØ464/93; NØ613/96, valid till the end of 1999. 15.12.98 EN Official Journal of the European Communities C 390/13

where such aid does not affect trading conditions to an has not been respected and that it seems rather uncertain extent contrary to the common interest’’. Such aid may that measures have actually served to consolidate the be considered compatible with the common market if the companies’ financial situations as asked for by the criteria of the Community guidelines on State aid for restructuring guidelines. rescuing and restructuring firms in difficultyØ(Õ) are met.

3.2.ÙConclusion Under point 3.1 of the Community guidelines on State aid for rescue and restructuring aid, rescue aid is admissible under certain conditions. Although inquiries On the basis of the information at its disposal, the have stretched over a period of almost four years the Commission expresses its doubts as to the compatibility Commission still does not have enough information at of the non-notified aid with the common market, which hand for verifying whether these conditions are was unlawfully disbursed before the Commission had respected. On the basis of the available information the taken its decision. The aid measures which have been Commission rather concludes that none of the loans or notified to the Commission and have partially been based guarantees satisfy the criteria of rescue aid. This on approved aid schemes are also doubtful. According to accounts for the requested time limit of six months, the the information currently available, the aids do not restriction to the minimum amount necessary to keep the appear to satisfy the established criteria laid down either firms in business, the required form of loans or guar- in the EC Treaty or in the Community guidelines for antees at market conditions, and, the question whether rescuing and restructuring firms in difficulty. the aid measures have any adverse effects on the industrial situation in other Member States. Therefore, the Commission has serious doubts that any of the The Commission has accordingly decided to initiate the measures can be exempted as rescue aid. procedure under Article 93(2) of the EC Treaty in respect of any aid in favour of the joint venture, any company of the Pilz group, or CDA Datenträger Albrechts GmbH, regardless of the companies’ current For an exemption as restructuring aid the guidelines names or legal forms. This includes all aid measures require that such aid measures be conditional on the during the start-up period (1991/1992, see point 2.2.1) implementation of a sound restructuring plan. The as well as from 1992 until the present day (see point amount and intensity of the aid must be limited to a 2.2.2). The Commission explicitly includes all measures, strict minimum during the restructuring phase and the which have potentially been awarded in connection with costs to which the aid relates must not exceed the benefit the setting-up of CDA Datenträger Albrechts GmbH and therefrom. The restructuring must restore the long-term the subsequent take-over of assets from the joint venture. viability of the companies in question and undue At this time the Commission assumes that the German distortions of competition should be avoided. Such authorities have at least awarded an aid amount of DEM restructuring has to ensure that the common interest is 370,7 million. served. Only in this way can the restructuring programme accompanying the aid contribute to the overall improvement of the market situation and act as Pursuant to the Treaty establishing the European sufficient counterpart to the distortive effect of the aid Community, and in particular Article 5 thereof, which award. In principle, no repetitive aid can be given. The places the Member States and the Community insti- German authorities have failed to submit the information tutions under mutual obligation to cooperate fairly and necessary for evaluating the abovementioned provide support, as well as Articles 92 and 93, the requirements. The Commission has not received any Commission hereby declares, in view of the above proof that a restructuring plan even existed at any time. described, that the German authorities have not provided To the Commission’s knowledge the investor has the necessary information to enable it to assess the contributed a maximum of DEM 11 million to the compatibility of this aid with Article 92 of the EC project. Given the large amount of the aid measures and Treaty. the limited investor’s contribution the Commission has serious doubts that aid measures are limited to a strict minimum (costs per safeguarded job: approximately DEM 1,7 million). Considering further that no In view of the foregoing and with reference to the information concerning the companies’ financial back- judgment of the Court of Justice of 14 February 1990 in grounds has been submitted it is not possible to assess Case C-301/87 Boussac, as confirmed by its judgment of whether the long-term viability of the companies will be 13 April 1994 in Joined Cases C-324/90 and C-342/90 restored. With regard to the fact that the companies have Pleuger WorthingtonØ(Ö), which concerned an repeatedly received aid in recent years the Commission infringement of Article 93(3) of the EC Treaty, the also considers that the principle of ‘‘one time last time’’ Commission is empowered to require the Member State

(Õ)ÙOJ C 368, 23.12.1994. (Ö)Ù[1994] ECR I-1205. C 390/14 EN Official Journal of the European Communities 15.12.98

in question, Germany in the present case, to provide it restore the status quo by removing all the financial with all such documentation, information and data as are benefits, which the firms receiving the unlawful aid have necessary in order that it may examine the compatibility improperly enjoyed since the date on which the aid was of the aid with the common market. paid.

The Commission has therefore decided to ask the The Commission also requests the German Government Federal Republic of Germany to provide, within one to inform the recipient firms without delay of the month of receiving this letter, all the necessary documen- initiation of the procedure and the fact that they might tation, information and data for assessing the compati- have to repay aid improperly received. bility with Article 92 of the EC Treaty of the aid as put in the annex to this letter. Germany shall also enclose The Commission hereby informs the German any other information that is deemed relevant for the Government that it will publish the present letter in the assessment of this case. Official Journal of the European Communities and the EEA Supplement to the Official Journal giving the other Failure to comply with this decision and failure to Member States, the EFTA States contracting to the EEA provide, within one month, all the information necessary and other parties concerned notice to submit their for assessing the compatibility of the aid, the comments. Commission would furthermore be entitled, in accordance with the established case-law of the Court of The Commission therefore invites the German Justice, to take a final decision on the matter on the basis Government to inform the Commission, addressed to the of the information then available to it. Director for State Aid, Directorate-General IV, within 15 working days of receiving this letter if elements are The Commission draws attention to the suspensory contained in the decision, which are of a confidential effect of Article 93(3) of the EC Treaty and to the nature.’ communication published in the Official Journal of the European Communities C 318 of 24 November 1983, The Commission hereby gives the other Member States page 3, and C 156 of 22 June 1995, page 5 in which it and interested parties notice to submit their comments on was stipulated that any aid granted unlawfully, i.e. the measures in question within one month of the date of without prior notification or without awaiting the publication of this notice to: Commission’s final decision under the procedure provided for in Article 93(2) of the EC Treaty, may have European Commission, to be recovered from the beneficiary. Directorate-General for Competition (DG IV), State Aid II Directorate, The abolishment of the aid involves repayment, in Rue de la Loi/Wetstraat 200, accordance with procedures and provisions of German B-1049 Brussels. law, with interest, based on the interest rate used as Fax (32-2) 299Ø27Ø58. reference rate in the assessment of regional aid schemes, starting to run on the date on which the unlawful aid The comments will be communicated to the German was granted. This measure is necessary in order to Government.