13 July 2023 (*1)

(Reference for a preliminary ruling – Structural Funds – European Regional Development Fund (ERDF) – Co-financing – Regulation (EC) No 1260/1999 – Articles 30(4) and 39(1) – Durability of investment operations – ‘Substantial modification’ of a co-financed investment operation – Recovery of aid in the event of transfer of the establishment which is the subject of that operation – Effect of the specific circumstances surrounding that transfer)

In Case C‑313/22,

REQUEST for a preliminary ruling under Article 267 TFEU from the Elegktiko Synedrio (Court of Auditors, Greece), made by decision of 28 January 2022, received at the Court on 11 May 2022, in the proceedings

Elliniko Dimosio,

THE COURT (Eighth Chamber),

composed of M. Safjan, President of the Chamber, N. Piçarra and M. Gavalec (Rapporteur), Judges,

Advocate General: N. Emiliou,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

–the Greek Government, by K. Boskovits, E. Panopoulou, G. Papadaki and E. Tsaousi, acting as Agents,

–the Czech Government, by J. Očková, M. Smolek and J. Vláčil, acting as Agents,

–the Estonian Government,, by M. Kriisa, acting as Agent,

–the European Commission, by M. Farley, I. Georgiopoulos and P. Rossi, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

1This request for a preliminary ruling concerns the interpretation of various provisions of EU law, in particular Article 30 of Council Regulation (EC) No 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds (OJ 1999 L 161, p. 1).

2The request has been made in proceedings between Achilleion Anomymi Xenodocheiaki Etaireia and Elliniko Dimosio (Greek State) concerning the partial recovery of financial aid granted for the modernisation of a hotel and the creation of three new jobs.

Legal context

European Union law

Regulation No 1260/1999

3Recitals 4, 6, 7 and 41 of Regulation No 1260/1999 stated:

‘(4) … in order to increase the concentration and simplify the operation of the Structural Funds the number of priority objectives should be reduced as compared with [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)]; … those objectives should be redefined as promoting the development and structural adjustment of regions whose development is lagging behind, economic and social conversion of areas facing structural difficulties and adapting and modernising policies and systems of education, training and employment;

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(6) … Whereas cultural development, the quality of the natural and the man-made environment, the qualitative and cultural dimension of life and the development of tourism contribute to making regions economically and socially more attractive in so far as they encourage the creation of sustainable employment;

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(7) … the European Regional Development Fund (ERDF) is the primary contributor to attaining the objective of promoting the development and structural adjustment of the regions whose development is lagging behind and economic and social conversion of areas facing structural difficulties;

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(41) … in accordance with the principle of subsidiarity, the rules on eligible expenditure should be the relevant national rules where there are no Community rules, although they may be laid down by the [European] Commission where they are clearly needed for the uniform and equitable implementation of the Structural Funds across the Community; … however, the starting and closing dates for the eligibility of expenditure should be defined and it should be stipulated that investment projects may not undergo major modification; … consequently, in order to ensure the efficiency and durable impact of the Funds’ assistance, all or part of the assistance from a Fund should remain attached to an operation only where its nature or its implementation conditions do not undergo a substantial modification which would result in diverting the assisted operation from its original objectives’.

4Article 12 of Regulation No 1260/1999, entitled ‘Compatibility’, provided:

‘Operations financed by the Funds or receiving assistance from the [European Investment Bank (EIB)] or from another financial instrument shall be in conformity with the provisions of the Treaty, with instruments adopted under it and with Community policies and actions, including the rules on competition, on the award of public contracts, on environmental protection and improvement and on the elimination of inequalities and the promotion of equality between men and women.’

5Article 30 of that regulation, entitled ‘Eligibility’, provided:

‘1. Expenditure in respect of operations shall be eligible for a contribution from the Funds only if these operations form part of the assistance concerned.

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(a) affecting its nature or its implementation conditions or giving to a firm or a public body an undue advantage;

(b) resulting either from a change in the nature of ownership in an item of infrastructure or a cessation or change of location of a productive activity.

The Member States shall inform the Commission of any such modification. Where such a modification occurs, Article 39 shall apply.’

6Title IV of that regulation, entitled ‘Effectiveness of assistance from the Funds’, contained a Chapter II, entitled ‘Financial control’, which included Article 38 of that regulation, entitled ‘General provisions’. Article 38(1) provided:

‘Without prejudice to the Commission’s responsibility for implementing the general budget of the European Communities, Member States shall take responsibility in the first instance for the financial control of assistance. To that end, the measures they take shall include:

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(e) preventing, detecting and correcting irregularities …;

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(h) recovering any amounts lost as a result of an irregularity detected and, where appropriate, charging interest on late payments.’

7Chapter II also includes Article 39 of Regulation No 1260/1999, entitled ‘Financial corrections’, which provided in paragraph 1:

‘The Member States shall, in the first instance, bear the responsibility for investigating irregularities, acting upon evidence of any major change affecting the nature or conditions for the implementation or supervision of assistance and making the financial corrections required.

The Member State shall make the financial corrections required in connection with the individual or systemic irregularity. The corrections made by the Member State shall consist in cancelling all or part of the Community contribution. The Community funds released in this way may be re-used by the Member State for the assistance concerned, in compliance with the arrangements to be defined pursuant to Article 53(2).’

That regulation was repealed, with effect from 1 January 2007, by Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999 (OJ 2006 L 210, p. 25). However, Article 105(1) of Regulation No 1083/2006 provides that that regulation does not affect the continuation or modification, including the total or partial cancellation, of assistance co-financed by the Structural Funds or of a project co-financed by the Cohesion Fund approved by the Commission on the basis of Regulation No 1260/1999 or any other legislation which applies to that assistance on 31 December 2006, which consequently applies thereafter to that assistance or the projects concerned until their closure.

Regulation (EC) No 1685/2000

Commission Regulation (EC) No 1685/2000 of 28 July 2000 laying down detailed rules for the implementation of Council Regulation (EC) No 1260/1999 as regards eligibility of expenditure of operations co-financed by the Structural Funds (OJ 2000 L 193, p. 39) contained an annex entitled ‘Eligibility rules’. Under Rule No 1, point 1.10 of that annex, in the version resulting from Commission Regulation (EC) No 448/2004 of 10 March 2004 (OJ 2004 L 72, p. 66) (‘the Annex to Regulation No 1685/2000’), ‘Member States may apply stricter national rules for determining eligible expenditure under points 1.6, 1.7 and 1.8’, concerning costs relating to the depreciation of real estate or equipment, contributions in kind and overheads.

Regulation (EC) No 448/2001

Chapter II of Commission Regulation (EC) No 448/2001 of 2 March 2001 laying down detailed rules for the implementation of Council Regulation (EC) No 1260/1999 as regards the procedure for making financial corrections to assistance granted under the Structural Funds (OJ 2001 L 64, p. 13), entitled ‘Financial corrections by Member States’, contained Article 2 of that regulation, which provided, in paragraphs 1 and 2:

‘1. In the case of systemic irregularities, enquiries under Article 39(1) of Regulation [No 1260/1999] shall cover all the operations liable to be affected.

The Guidelines on national regional aid

Points 4.12 and 4.14 of the Guidelines on national regional aid (OJ 1998 C 74, p. 9) are worded as follows:

‘4.12. Job creation means a net increase in the number of jobs … in a particular establishment compared with the average over a period of time. Any jobs lost during that period must therefore be deducted from the apparent number of jobs created during the same period …’

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‘4.14 Aid for job creation must be made conditional, through its method of payment or through the conditions associated with its acquisition, on the maintenance of the employment created during a minimum period of five years.’

Regulation (EC) No 659/1999

Article 14 of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 1999 L 83, p. 1), entitled ‘Recovery of aid’, provided in paragraph 1 thereof:

‘Where negative decisions are taken in cases of unlawful aid, the Commission shall decide that the Member State concerned shall take all necessary measures to recover the aid from the beneficiary …. The Commission shall not require recovery of the aid if this would be contrary to a general principle of Community law.’

Regulation (EC, Euratom) No 2988/95

Under Article 1(2) of Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities financial interests (OJ 1995 L 312, p. 1):

‘“irregularity” shall mean any infringement of a provision of Community law resulting from an act or omission by an economic operator, which has, or would have, the effect of prejudicing the general budget of the Communities or budgets managed by them, either by reducing or losing revenue accruing from own resources collected directly on behalf of the Communities, or by an unjustified item of expenditure.’

Article 2 of that regulation provides:

‘1. Administrative checks, measures and penalties shall be introduced in so far as they are necessary to ensure the proper application of Community law. They shall be effective, proportionate and dissuasive so that they provide adequate protection for the Communities’ financial interests.

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