Judgments nº T-332/07 of Court of First Instance of the European Communities, September 09, 2008

• Resolution Date: September 09, 2008
• Issuing Organization: Court of First Instance of the European Communities
• Decision Number: T-332/07

In Joined Cases T-349/06, T-371/06, T-14/07, T-15/07 and in Case T-332/07,

Federal Republic of Germany, represented by M. Lumma and, in Cases T-349/06, T-371/06, T-14/07 and T-15/07, also by C. Schulze-Bahr, acting as Agents, assisted by C. von Donat, lawyer,

applicant,

v

Commission of the European Communities, represented by G. Wilms and L. Flynn, acting as Agents,

defendant,

ACTION for the annulment of Decisions C (2006) 4193 final and C (2006) 4194 final of 25 September 2006, Decisions C (2006) 5163 final and C (2006) 5164 final of 3 November 2006 and Decision C (2007) 2619 final of 25 June 2007 reducing the financial assistance from the European Regional Development Fund (ERDF) for Objective 2 1997 - 1999 of the RESIDER- Nordrhein-Westfalen Operational Programme 1994 -1999, for the Operational Programmes for Nordrhein-Westfalen in the framework of the common SME (small and medium-sized enterprises) and RECHAR II initiatives, and for the Operational Programme for Community structural assistance in the Objective 2 regions of Land Nordrhein-Westfalen for the period 1994 - 1996 respectively,

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Fourth Chamber),

composed of O. Czúcz (Rapporteur), President, J.D. Cooke and I. Labucka, Judges,

Registrar: K. Andová, Administrator,

having regard to the written procedure and further to the hearings on 26 February 2008 (T-349/06, T-371/06, T-14/07 and T-15/07) and 10 June 2008 (T-332/07),

gives the following

Judgment

Legal context

1 From 1989 to 1999, the rules concerning the implementation of the economic and social cohesion provided for in Article 158 EC were laid down in Council Regulation (EEC) No 2052/88 of 24 June 1988 on the tasks of the Structural Funds and their effectiveness and on coordination of their activities between themselves and with the operations of the European Investment Bank and the other existing financial instruments (OJ 1988 L 185, p. 9). That regulation was the principle measure governing the Structural Funds and in particular, the European Regional Development Fund (ERDF). Regulation No 2052/88 was amended, inter alia, by Council Regulation (EEC) No 2081/93 of 20 July 1993 (OJ 1993 L 193, p. 5).

2 Article 1 of Regulation No 2052/88 sets out the priority objectives which Community action through the Structural Funds is to attain.

3 Article 4 of Regulation No 2052/88 concerns complementarity, partnership and technical assistance. It provides as follows:

-1. Community operations shall be such as to complement or contribute to corresponding national operations. They shall be established through close consultations between the Commission, the Member State concerned and the competent authorities and bodies - designated by the Member State at national, regional, local or other level, with all parties acting as partners in pursuit of a common goal. These consultations shall hereinafter be referred to as the -partnership-. The partnership shall cover the preparation and financing, as well as the ex ante appraisal, monitoring and ex post evaluation of operations.

The partnership will be conducted in full compliance with the respective institutional, legal and financial powers of each of the partners.

--

4 Article 5(2) of Regulation No 2052/88 is entitled -Forms of assistance-. Article 5(2)(a) provides that -[i]n the case of the Structural Funds -, financial assistance may be provided [inter alia] in [the form of] part-financing of operational programmes-. Article 5(5) defines the expression -operational programme- as -a consistent series of multiannual measures which may be implemented through recourse [inter alia] to one or more Structural Funds-.

5 Pursuant to Articles 8 to 10 and 11a of Regulation No 2052/88, the plans to be drawn up by the Member States are to include, inter alia, a description of an appropriate strategy to achieve the objectives referred to in Article 1 of the regulation, the priorities selected for that purpose, quantified where they lend themselves to quantification, and an indication of the planned use of the assistance available under the Funds. According to the same provisions, the Commission is to establish, on the basis of all those plans, through the partnership referred to in Article 4(1) of the regulation and in agreement with the Member State concerned, the Community support framework, which is to cover, in particular, the priorities adopted for Community assistance and the indicative financing plan, with details of the amount of assistance and its source.

6 On 19 December 1988, the Council adopted Regulation (EEC) No 4253/88 laying down provisions for implementing Regulation (EEC) No 2052/88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments (OJ 1988 L 374, p. 1). Regulation No 4253/88 was amended by Council Regulation No 2082/93 of 20 July 1993 (OJ 1993 L 193, p. 20).

7 Article 8(3) of Regulation No 4253/88 repeats certain provisions of Articles 8 to 10 and 11a of Regulation No 2052/88 and provides that -[e]ach Community support framework shall include-, inter alia, -the priorities for joint Community and national action in relation to the objectives referred to under Article 1 of [Regulation No 2052/88], their specific objectives, quantified where they lend themselves to quantification- and -an indicative financing plan specifying the financial allocations envisaged for the various forms of assistance-.

8 Article 14 of Regulation No 4253/88 concerns the processing of applications for assistance. It provides, inter alia, as follows:

-1. Applications for assistance from the Structural Funds - shall be prepared by the Member State or by the competent - authorities designated by it and shall be submitted to the Commission -

2. Applications shall contain the information [needed], including a description of the proposed measure -and specific objectives. Applications shall also include - the proposed - financing plan

3. The Commission shall examine applications with a view in particular to:

   -

   - assessing the contribution of the proposed operation to the achievement of its specific objectives and, in the case of an operational programme, the consistency of the constituent measures,

   - checking that the administrative and financial mechanisms are adequate to ensure effective implementation,

   - determining the precise arrangements for providing assistance from the Fund or Funds concerned - .

   The Commission shall decide on assistance from the Funds - provided that the requirements of this Article are fulfilled --

   9 Article 24 of Regulation No 4253/88, entitled -Reduction, suspension and cancellation of assistance-, provides as follows:

   -1. If an operation or measure appears to justify neither part nor the whole of the assistance allocated, the Commission shall conduct a suitable examination of the case in the framework of the partnership, in particular requesting that the Member State or authorities designated by it to implement the operation submit their comments within a specified period of time.

2. Following this examination, the Commission may reduce or suspend assistance in respect of the operation or a measure concerned if the examination reveals an irregularity or a significant change affecting the nature or conditions for the implementation of the operation or measure for which the Commission-s approval has not been sought.

3. Any sum received unduly and to be recovered shall be repaid to the Commission--

   10 Finally, Article 25 of Regulation No 4253/88 concerns monitoring of the implementation of assistance; Article 25(5) provides as follows:

   -The monitoring committee shall - adjust -, in conformity with available resources and budgetary rules, the financing plan envisaged, including any transfers between Community sources of finance and the consequential adjustments of the rates of assistance ...

   These amendments shall be notified immediately to the Commission and the Member State concerned. They shall become effective as soon as confirmation has been provided by the Commission and the Member State concerned; such confirmation shall be given within a period of 20 working days from receipt of this notification, the date of which will be confirmed by the Commission by acknowledgement of receipt.

   Other amendments required shall be decided by the Commission, in collaboration with the Member State concerned, after the monitoring committee has delivered its opinion.-

   Background to the dispute

   Decisions granting financial assistance

   11 By Decision C (94) 3379 of 14 December 1994, the Commission approved, in the form of a single programming document, the Community support framework and operational programme for Community structural assistance in the Objective 2 regions of Land Nordrhein-Westphalen for the period from 1994 - 1996. The decision was amended on several occasions and, in its final version, granted financial assistance from the ERDF in the amount of EUR 241 292 000 and extended the time-limit for the implementation of the projects to 31 December 2000.

   12 By Decision C (95) 1427 of 11 July 1995, the Commission granted Community financial assistance for an operational programme in the framework of the Community SME (small and medium-sized enterprises) initiative for the period 1994 - 1996 and concerning Land Nordrhein-Westphalen. The decision was amended on several occasions. The final version of the decision granted financial assistance from the ERDF in the amount of EUR 8 206 000.

   13 By Decision C (95) 1738 of 27 July 1995, the Commission granted Community financial assistance to an operational programme in the framework of the Community initiative RESIDER II for the purpose of economic conversion in the steel-making areas of Land Nordrhein-Westfalen for the period from 28 November 1994 to 31 December 1997. The decision was amended on several...