(2) A submission of information by the German authorities was received on 29 September 2008.

Transcription

1 EUROPEAN COMMISSION Brussels, C(2012) PUBLIC VERSION WORKING LANGUAGE This document is made available for information purposes only. Subject: State aid SA (2012/NN) (ex CP 96/2008) Germany Alleged aid in the form of the provision of staff at favourable conditions by the Chamber of Agriculture North Rhine - Westphalia to Landwirtschaftliche Unternehmensberatung Nordrhein-Westfalen (LUB) GmbH Sir, 1. PROCEDURE (1) By letter dated 4 July 2007, the "Gesellschaft zur Verbesserung der Agrarstruktur- GVAgrar mbh & Co. KG" (hereafter: GVAgrar) submitted information to the Commission related to alleged infringements of EU law, including the alleged provision of staff under favourable conditions by the Chamber of Agriculture North Rhine- Westphalia "Landwirtschaftskammer Nordrhein-Westfalen" (hereafter: LWK NRW) to the limited company "Landwirtschaftliche Unternehmensberatung Nordrhein-Westfalen (LUB) GmbH" (hereafter: LUB GmbH). The information related to the provision of staff was registered as a complaint under the registration number under reference on 21 April (2) A submission of information by the German authorities was received on 29 September (3) By letters of 13 January 2009, 3 March 2009, 9 March 2009, 21 April 2009, 9 June 2009, 29 June 2009, 22 March 2010, 10 September 2010 and 13 December 2010, the complainant submitted additional information to DG COMP. Seiner Exellenz Herrn Dr. Guido Westerwelle Bundesminister des Auswärtigen Werderscher Markt 1 D Berlin Commission européenne, B-1049 Bruxelles/ Europese Commissie, B-1049 Brussel-Belgium Telephone: (0)

2 (4) The Commission services informed the complainant on 30 March 2011 of its preliminary assessment regarding the alleged aid in the form of the provision of staff under favourable conditions. (5) The complainant did not agree with this preliminary assessment and submitted additional information on 26 April 2011 and 15 June On 12 July 2011, the Commission services asked the complainant to submit a non-confidential version on this information, which was received on 19 August 2011 and sent to the German authorities for comments on 26 August (6) By letter dated 23 September 2011, the German authorities provided further information to the Commission services which was forwarded on 29 September 2011 to the complainant. (7) On 18 October 2011, the Commission services received additional information from the complainant, of which a non-confidential version (received on 24 October 2011) was forwarded on 4 November 2011 to the German authorities, requiring comments and further information which were received on 2 December (8) In its submission of information from 18 October 2011, the complainant requested a formal decision from the Commission. (9) Following a request for information by the Commission to the complainant of 26 March 2012, the complainant submitted additional information by letters of 19 and 24 April (10) Following a request for information by the Commission to the German authorities of 26 March 2012, the German authorities submitted additional information by letters of 9 and 18 May (11) The present decision addresses exclusively an alleged violation of Article 108 (3) TFEU. 2. DESCRIPTION OF THE ALLEGED AID MEASURE (12) The complainant, GVAgrar, is a consultancy firm dealing with the promotion of investments in agriculture. It is a limited partnership and enjoys the status of a stateapproved expert. (13) LWK NRW is a public corporation ("Körperschaft des öffentlichen Rechts") which is subordinated to the State of North-Rhine Westphalia. The staff of the LWK NRW are civil servants (or officials). (14) LUB GmbH is a limited liability company founded in 1969, which is owned by LWK NRW and the Westdeutsche Genossenschafts-Zentralbank. It provides advisory and supervising services to the German public support programmes for agricultural investment ("Agrarinvestitionsförderungsprogramme" (hereafter: AFP)) and financial and risk management of agricultural and horticultural businesses. 2

3 (15) The complainant argues that staff from the LWK NRW, who are on the payroll of the Chamber of Agriculture, are made available to LUB GmbH under favourable conditions. As GVAgrar and LUB GmbH both provide advice and monitoring services with regard to the AFP and are therefore competitors, the complainant argues that the alleged measure distorts competition. (16) The complainant disputes that the activity of staff provided by LKW NRW to LUB GmbH are invoiced and registered in a real cost accounting system. Therefore, according to the complainant, an improper cross-subsidisation of LUB GmbH by LKW NRW takes place. The complainant alleges further that the LKW NRW staff concerned do not dispose of the necessary legal permissions to perform the external activities ("Nebentätigkeitsgenehmigungen"). (17) The complainant argues further that the hourly rates which are charged by LKW NRW to LUB GmbH for the provision of staff are not in line with market conditions. In support of this argument, the complainant enclosed an information sheet "Merkblatt", which was published by the Berlin Chamber of Engineers in the Construction Sector ("Baukammer"), a body of public law ("Körperschaft des öffentlichen Rechts") in which all architects and engineers that exercise their profession as independent professionals are obliged to be members, and which contains non-binding recommendations for the hourly rates independent architects and engineers may ask from private customers for services in the construction sector. The "Merkblatt" has been established once the German legislator abolished previously existing binding regulation of hourly rates in the Honorarordnung für Architekten und Ingenieure HOAI. 1 It indicates that it is based on the collective agreement for the construction sector. (18) The complainant claims that the hourly rates for comparable jobs mentioned in this "Merkblatt" are significantly higher than those charged for the provision of staff by LWK NRW to LUB GmbH. As an example, the complainant notes that the average hourly rate for a contractor according to the Merkblatt is EUR 125 and for a project leader EUR 95. These rates are clearly above the rates for senior administrative functions and lower-level administrative functions provided by the German authorities (see recital (25) below). The recommended hourly rates contained in the Merkblatt for architects and engineering services in the construction sector can be found in the table below 2 : min (EUR) average (EUR) max (EUR) Contractor / Owner Project leader Engineer Technical Staff Other employees 100,00 76,00 64,00 52,00 32,00 125,00 95,00 80,00 65,00 40,00 150,00 114,00 96,00 78,00 48,00 1 BGBl. 2009, I S See 3

4 (19) The information sheet further indicates that these recommended rates vary due to the consideration of ±20 % office costs. 3. COMMENTS AND INFORMATION FROM GERMANY (20) Germany confirms that five employees of the LWK NRW work simultaneously for LUB GmbH and submitted a list of the staff concerned. Germany confirms that all their services are invoiced and registered in a real cost accounting system and considers that no cross-subsidisation takes place. Germany submitted the corresponding accounting documents. (21) The reimbursement for the services in question takes place on the basis of rules and rates laid down in a Circular which is updated annually by the Ministry of the Interior of the Land of North-Rhine Westphalia ("Richtwerte für die Berücksichtigung des Verwaltungsaufwandes bei der Feststellung der nach dem Gebührengesetz für das Land Nordrhein-Westfalen zu erhebenden Verwaltungsgebühren" (RdErl. des Innenministeriums)). This Circular is the basis upon which services are offered to third parties. The time worked by LKW NRW staff for LUB GmbH is multiplied by the hourly rates laid down in the Circular. The revenue by hours worked is indicated in the accounts of LWK NRW. As the provision of staff from the LWK NRW to LUB GmbH is calculated on a full cost basis, the measurement is objective in nature and the methodology therefore reflects market conditions. (22) Germany clarified that the work of LKW NRW staff for LUB GmbH is laid down in a contract from 1998 between LUB GmbH and the Landwirtschaftskammern Rheinland und Westfalen-Lippe, the legal predecessors 3 of LWK NRW. Therefore, the staff concerned do not need a secondary activity permit to perform the external activities. (23) Paragraph 1 of the contract provides for the assignment of staff: To carry out these business goals the Rhineland and Westphalia-Lippe Chambers of Agriculture declare that they are willing, within the limits of the staff and time available to them, to have their staff take on tasks in LUB against reimbursement of the costs by the LUB. (24) Paragraph 2 of the contract provides for the type of payment: Work of LUB in supervising AFP measures: If the Chambers of Agriculture undertake tasks in the framework of AFP measures, they shall receive compensation for expenses incurred in performing these services in accordance with the Interior Ministry s guidelines for taking into account administrative costs in calculating the fees charged under the North Rhine-Westphalia Fees Act. (Circular of the Interior Ministry). The hourly rates for administrative costs are: senior administrative function DM 127 lower-level administrative function DM 98 executive function DM 77 3 In 1998, the Landwirtschaftskammer Rheinland and the Landwirtschaftskammer Westfalen-Lippe were separate entities. After their merger in 2004, LWK NRW took over the rights and obligations of the two chambers. 4

5 clerical-level function DM 58 plus legally required VAT. The hourly rates are adjusted annually in accordance with the latest circular of the Interior Ministry and are the basis for billing. (25) According to the corresponding publications of the North Rhine Westphalian Government on the internet, the most recent annual update of the Circular from 1 July 2011 determines the following hourly rates: senior administrative function EUR 72 lower-level administrative function EUR 56 executive function EUR 46 clerical-level function EUR 34 The German authorities submitted extensive information on the calculation of the average salaries for comparable employees in the open labour market. The main results are contained in the following table: Salary scale 10 Level 4 (8 years professional experience) Agricultural engineer employed in the public service, collective agreement "Tarifvertrag Land (TVöL)" Basis salary: 3, Technician allowance: Employers with social security's cost surcharge Engineer (excluding public administration; statistical data according to the Federal Statistical Office) Qualified employees in agricultural sector (previous territory of the Federal Republic of Germany; statistical data according to the Federal Statistical Office) Monthly Costs 4, , /month for other engineers (2006) corresponds to 2% salary increase per year which amounts to 5, /month in , /month in previous territory of the Federal Republic of Germany (2010) for qualified employees 5

6 Annual gross salary (x 12,8 monthly salaries) Hourly rates (based on annual working hours) 57, , , (26) The German authorities explained that the figures in the second column of this table are based on the collective agreement for employees of the public sector Tarifvertrag für den öffentlichen Dienst der Länder (TV-L)" 4. The figures relate to the salaries of agricultural engineers and graduates with a bachelor degree of science and 8 years of relevant work experience employed by the public service 5. (27) The figures in the third column refer to the results of a study on labour costs Verdienste und Arbeitskosten Verdienststrukturerhebung 2006, published by the Federal Statistical Office "Statistisches Bundesamt" in The implementation of the earnings survey is required by Council Regulation (EC) No 530/1999 of 9 March 1999 concerning structural statistics on earnings and on labour costs. 7. As this monthly gross salary dates from 2006, it has been increased on a yearly basis by 2% to obtain a value for The data only cover the private sector (the public service is not included). The agricultural sector is not represented, but the level of education of the employees from LWK NRW corresponds to the level of education in engineering covered by the statistics. (28) Finally, as regards the figures in the fourth column, the German authorities explained that the Federal Statistical Office "Statistisches Bundesamt" is currently collecting the data for agricultural engineers and technicians with a diploma from a University of applied sciences. The preliminary data indicated in the column have not yet been published. (29) The German authorities further explained that in order to calculate the yearly gross salary, the costs per month have to be multiplied by an average value of As an average, each year amounts to working hours. The average hourly rates, based on this number of annual working hours, is provided in the fifth row of the table. (30) According to Germany, a comparison between the hourly rates for the provision of staff from LWK NRW to LUB GmbH and the market price for comparable services in the open labour market shows that the costs for LUB GmbH are above the costs LUB 4 The Collective Agreement for the Civil Service (TVöD) described several collective agreements for employees at institutions of public administration. On 1 October 2005, the first TVöD for employees of the federal and local governments in Germany entered into force. 5 See 6 See rufe/verdiensteberufe.html;jsessionid=f351ab8de8d0e2ad28117d8ee166a664.cae1 7 OJ L 63/6 of

7 GmbH would have to pay for employees from the private sector. Therefore, the provision of staff from LWK NRW to LUB GmbH cannot constitute State aid. 4. ASSESSMENT (31) According to Article 107(1) of the Treaty on the Functioning of the European Union (TFEU) "any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market". (32) Therefore, for State aid to be present within the meaning of Article 107(1) TFEU, it must be shown that the provision of staff by LWK NRW to LUB GmbH fulfils the following criteria: it must be granted by the State or through State resources it must confer an advantage on the recipient on a selective basis; it must distort or threaten to distort competition; and it must be likely to affect trade between Member States (33) As regards the first criterion, LWK NRW is a public corporation which has as its task the promotion of agriculture and rural areas and the provision of support to farmers. The supply of LKW NRW staff to LUB GmbH can therefore be considered to constitute an intervention by the State. (34) As regards the second criterion, it should be pointed out that, in accordance with settled case-law 8, the supply of goods or services on preferential terms is capable of constituting State aid within the meaning of Article 107(1) TFEU. Accordingly, in order to determine whether such a measure constitutes aid, it is necessary to establish whether the recipient undertaking receives an economic advantage which it would not have obtained under normal market conditions 9. (35) In the present case, the information provided by the German authorities shows that the hourly rates for employees on the labour market with the same or at least a comparable level of education and experience as those of LWK NRW working for LUB GmbH are lower than the actual amounts reimbursed on the basis of the Circular of the Interior Ministry of North Rhine Westphalia. (36) Thus, the annual gross salary for an employee with a bachelor s degree in agricultural engineering and 8 years experience, which corresponds to at least some of the employees provided by LWK NRW to LUB GmbH in the present case, amounts to EUR on the basis of the collective bargaining agreement for employees in the 8 Joined Cases T-268/08 and T-281/08 Land Burgenland v Commission [2012] ECR II-0000, paragraph 47 and the case-law cited. 9 Case C-39/94 SFEI [1996] ECR I-3547, paragraph 60 and Joined Cases C-34/01 to C-38/01 Enirisorse SpA v Ministero delle Finanze [2003] ECR I-14243, paragraph 30. 7

8 public sector Tarifvertrag für den öffentlichen Dienst der Länder (TV-L). Given an average of working hours per year, this corresponds to an hourly rate of EUR (37) Based on the study on labour costs Verdienste und Arbeitskosten Verdienststrukturerhebung 2006, published by the Federal Statistical Office "Statistisches Bundesamt" in 2009, the hourly rate for employees with a level of education in engineering that corresponds to the level of the employees of LWK NRW comes to EUR (38) Finally, the preliminary data currently being collected by the Federal Statistical Office "Statistisches Bundesamt" for agricultural engineers and technicians with a diploma from a University of applied sciences provides an average hourly rate for such employees of EUR (39) By contrast, the data provided by the complainant does not show that the hourly rates charged by LWK NRW to LUB GmbH for the provision of its employees is below market price. First of all, the Commission considers that the Merkblatt concerns the hourly rates to be charged by engineers working as independent professionals, not as employees. They are therefore not comparable in their nature to hourly wages paid to employees. In particular, they need to take account for the fact that the independent professional has to pay its office costs, has to realise a reasonable profit, and has different risk with regards to unemployment, health care, insurance, administrative costs (membership in chambers and professional liability insurance) and pensions than an employee. These additional costs are also reflected in the hourly rates he charges for his employees to third parties. Secondly, the Commission notes that the services provided by architects and engineers in the construction sector are not comparable to the services provided by the employees of LWK NRW to LUB GmbH: whereas the architects and engineers provide architectural and engineering services, LUB GmbH provides advice for the financial aspects of projects in the agricultural and horticultural field. It also provides support in requesting grants from public bodies. (40) The Commission therefore considers that Circular of the Interior Ministry of North Rhine Westphalia constitutes the more appropriate benchmark for the market price for putting public employees at the disposal of LUB than the Merkblatt. (41) Finally, the Commission notes that the rates established by the Circular are updated annually, based on actual data. Thus, the Court of Justice, in a case concerning the sale by public authorities of land to an undertaking, recently held that Article [107 TFEU] must be interpreted as not precluding a provision of national law laying down calculation methods for determining the value of agricultural and forestry land, offered for sale by public authorities in the context of a privatisation plan, [ ], to the extent that those methods provide for the updating of the prices, where prices for such land are rising sharply, so that the price actually paid by the purchaser reflects, in so far as is possible, the market value of that land Case C-239/09 Seydaland Vereinigte Agrarbetriebe GmbH & Co. KG v BVVG Bodenverwertungs- und - verwaltungs GmbH [2010] ECR I

9 (42) In light of the above, the Commission considers that the provision of staff by LWK NRW to LUB GmbH does not confer an advantage on the latter. 5. CONCLUSION (43) Accordingly, the Commission has decided that the measure described in the complaint does not constitute aid within the meaning of Article 107(1) TFEU. Therefore, Germany has not violated Article 108 (3) TFEU by putting into place the measure under assessment. If this letter contains confidential information, which should not be disclosed to third parties, please inform the Commission within fifteen working days of the date of receipt. If the Commission does not receive a reasoned request by that deadline, you will be deemed to agree to the disclosure to third parties and to the publication of the full text of the letter in the authentic language on the Internet site: Your request should be sent by registered letter or fax to: European Commission Directorate-General for Competition State Aid Greffe B-1049 Brussels Fax No: Yours faithfully, For the Commission Joaquín ALMUNIA Vice President 9