Judgment of the General Court Third Chamber, Extended Composition, 4 May 2022, Larko v Commission, T-423/14 RENV

• Date: 04 May 2022
• Year: 2022

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Judgment of the General Court (Third Chamber, Extended Composition), 4 May 2022, Larko

v Commission, T-423/14 RENV

Link to the full text of the judgment

State aid – Aid implemented by Greece – Decision declaring the aid incompatible with the internal

market – Concept of State aid – Advantage – Private operator principle – Guarantee premium – Firm in

difficulty – Knowledge of the Greek authorities – Commission Notice on State aid in the form of

guarantees – Manifest error of assessment

By decision of 27 March 2014,

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the Commission found that the Greek public undertaking Larko

Geniki Metalleftiki kai Metallourgiki AE (‘Larko’) had received over EUR 135 million in unlawful State aid

that was incompatible with the internal market, granted in the form of three guarantees in 2008, 2010

and 2011 and an increase in share capital in 2009.

With regard in particular to the guarantee granted in 2008, the Commission classified that guarantee

as an advantage for the purposes of Article 107(1) TFEU, since a market creditor would not have

provided such a guarantee under the conditions and according to the procedure agreed by the Greek

authorities. In that regard, the Commission stated that that guarantee did not fulfil any of the

cumulative conditions which precluded it from being classified as State aid, under the Guarantee

Notice,

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namely, in particular, that the recipient undertaking should not be in financial difficulty and

that it should be granted on payment of a premium in line with the market price.

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By judgment of 1 February 2018,

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the General Court dismissed the action for annulment brought by

Larko against the decision at issue. In the view of that Court, the Commission had not, inter alia,

committed a manifest error of assessment in holding that, in the absence of evidence to the contrary

provided by the Greek authorities, the latter were or should have been aware of Larko’s economic

difficulties at the time the 2008 guarantee was granted.

Acting on the appeal lodged by Larko, the Court of Justice set aside in part the judgment of the

General Court and referred the case back to that Court.

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In its judgment, the Court of Justice stated

inter alia that, where the Commission decides to refer to the private investor test in order to examine

the existence of an advantage under Article 107(1) TFEU, it is required to demonstrate that the

conditions for applying that test are satisfied. In applying that test, the Commission cannot assume

that an undertaking has benefited from an advantage constituting State aid solely on the basis of a

negative presumption, based on a lack of information enabling the contrary to be found, if there is no

other evidence capable of positively establishing the actual existence of such an advantage. In that

regard, the Court of Justice held that it was for the General Court to ascertain, during the procedure

on referral, whether the administrative file contained reliable and coherent evidence which provided

a sufficient basis for concluding that the Greek authorities were or should have been aware of Larko’s

alleged economic difficulties and that that point was not disputed between the Commission and the

Greek authorities.

By its judgment of 4 May 2022, the General Court dismisses Larko’s action and provides clarification

concerning the allocation of the burden of proof between the Commission and the Member State

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Commission Decision 2014/539/EU of 27 March 2014 on the State aid SA.34572 (2013/C) (ex 13/NN) implemented by Greece for Larco

General Mining & Metallurgical Company SA (OJ 2014 L 254, p. 24) (‘the decision at issue’).

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Commission Notice on the application of Articles 107 and 108 TFEU to State aid in the form of guarantees (OJ 2008 C 155, p. 10).

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Point 3.2(a) and (d) of the Commission Notice

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Judgment of 1 February 2018, Larko v Commission, T-423/14, EU:T:2018:57.

Judgment of 26 March 2020, Larko v Commission, C-244/18 P, EU:C:2020:632, ‘the judgment in Intel’).