Belgian government intervened to help financially
ailing paper-making firm.
One of ways it helped was to inject capital into
company in return for shares.
Commission found no issue but ECJ held this was state
Treaty applies to aid granted by State ‘in any form
No distinction can be drawn between aid granted in
form of loans and aid granted in form of holding acquired in capital of undertaking.
ECJ held Commission’s decision to be contradictory and
lacking sufficient justifications for its findings.
eg Commission gave no verifiable reasons to justify
its finding that holding acquired by public authorities in recipient
undertaking was not incompatible with Treaty.
Also, aid was said to be rescue aid by Commission, and
such aid threatens competition.
But this was aid to pay off debts and therefore would
not necessarily affect competition.
Decision declared void.