REPORTS
European Court of Justice: Greece violates its EU obligations by failing to recover unlawful aid
On 12 May 2021 the Court of Justice of the European Union (CJEU) ruled (Case C-11/20) that Greece had breached its EU obligations by failing to comply with a European Commission decision and to recover unlawful aid granted to farmers due to adverse weather conditions.
In 2009, the Hellenic Agricultural Insurance Agency (ELGA), the public body responsible for insuring agricultural holdings against damage from natural disasters, had paid farmers compensation in the total amount of 425 million euros for damages suffered in 2008 due to extreme weather events.
European Commission Decision 2012/157/EU on 7 December 2011 defined these payments as unlawful aid, contrary to the rules of the internal market as provided for in Article 108 (3) of the Treaty on the Functioning of the European Union (TFEU), and asked the Greek authorities to recover the funds.
Greece appealed the Commission’s decision in the CJEU, but in 2014 the European Court rejected the appeal. (read the full decision here). The country also appealed against the court decision, but in March 2016 this appeal was also rejected, and Greece was required to fulfil its EU obligations by recovering the funds (read the full decision here).
Following the rejection of the appeals, Greece failed to take measures to recover the unlawful aid in a timely manner, nor did it communicate, as it was obliged to, the way in which it was going to comply with the decisions of the Commission and the CJEU. As a result, the European Commission took the case to the European Court of Justice again, which returned the aforementioned ruling in May 2021. (Case C-11/20)
The Court ruled that “Greece did not take, by the end of the deadline set by the Commission (11 June 2012), all the necessary measures to recover the unlawful aid from their recipients…more than eight years after the Commission’s decision, the Greek authorities have not yet implemented it “.
The ruling also considered that recovering the aid was not a complete impossibility, as “the administrative or technical difficulties associated with the large number of beneficiaries do not justify the judgement that recovery is technically impossible…regarding the social unrest that the recovery of the aid would cause, the Greek authorities did not demonstrate the existence of the risk of a reaction from the farmers which would have consequences for public order which were not manageable with the means at their disposal.”
In addition to failing to take action to recover the unlawful aid, the European Court of Justice ruled that Greece had failed to adequately inform the Commission of the measures it was to take to implement its decision. This obligation stems from the decision of the Commission itself, which required Greece to provide information on the recovery of state aid within two months of its notification. This deadline expired on 8 February 2012.
The application of EU law is an obligation of the Member States of the European Union. If possible breaches of EU law are detected, the European Commission may take a series of actions against that Member State to ensure the correct and full application of EU law by initiating infringement proceedings in accordance with Articles 258 and 260 of the TFEU.
In this case Greece has breached its EU obligations by failing to comply with the Commission decision, which imposed, firstly, an obligation to recover unlawful aid granted in breach of the TFEU and, secondly, an obligation to inform the Commission of measures to be taken by the country to recover the funds.
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