As regards the ICF credit, it must be determined whether it confers on Chupa Chups a support that the company would not have been able to obtain on market conditions. In other words, the Commission has to assess whether this public body acted as a hypothetical market economy investor would have done under similar circumstances.

As set out under Section IV above, further to the opening decision Spain submitted information showing that the 2002 syndicated loan and the ICF credit cannot be compared because the borrowers were different in the two operations, securities were different, ICB was not a firm in difficulties, and ICB provided a security that was more than sufficient to guarantee the ICF credit.

On the basis of the information and arguments provided by Spain, the Commission considers that it has been sufficiently proved that the market economy investor principle was complied with in the main credit operation between ICF and ICB, and that the subordinated loan between ICB and Chupa Chups is a financial operation between two private parties.

Therefore, the Commission concludes that Measure 1 does not involve State aid.

Measures 2 to 5 were public subsidies directly granted to Chupa Chups. They involved the allocation of State resources conferring an advantage on one individual company. As regards in particular Measure 5, Spain used State resources by granting an interest-free loan to the company. The measures have provided Chupa Chups with advantages vis-à-vis competitors which distort competition, inasmuch as the company has reinforced its financial position and has increased its investment capacity. Since Chupa Chups is active in the candies market, a sector in which trade exists between Member States, and it is an internationally active company, the criterion of affecting trade within the Community is also fulfilled.

The Commission therefore concludes that Measures 2 to 5 constitute State aid within the meaning of Article 87(1) EC Treaty. The Spanish authorities do not dispute this analysis.

• a subsidy of EUR 1 590 000 from the EAGGF concerning refunds on exports to third countries22. The Commission notes that, according to the case law of the Court of Justice (see paragraph 22 of the judgment of 13 October 1982 in Joined Cases 213-215/81 Norddeutsches Vieh- und Fleischkontor), export funds granted by the EAGGF under Common Agricultural Policy (CAP) rules do not constitute State aid23. This measure therefore does not contain State aid elements;
• according to the comments from Chupa Chups received on 30 May 2006, Measure 6 also includes a subsidy of EUR 100 000 from ICEX granted in 2003 in the framework of the programme ‘Plan de Marcas Españolas’ for activities related to the promotion of the brand ‘Chupa Chups’ in South Korea. This programme was introduced by ICEX in 2003 and, according to Chupa Chups, the Spanish authorities considered at the time it was granted that the subsidy to the company complied with Regulation 1159/2000. Spain has not rejected the assertion by Chupa Chups that this subsidy was part of the EUR 1 540 000‘additional non-specified subsidies’ identified in point 5(5) of the decision initiating the procedure. Nor has Spain made any comment on the nature of the subsidy. Specifically, despite the low amount involved and the Commission’s enquiries in this regard, Spain has not claimed that its granting was subject to the conditions on de minimis aid applicable at the time24.

Consequently, the Commission concludes that Measure 6 constitutes State aid within the meaning of Article 87(1) EC Treaty to the amount of EUR 100 000.

In view of the information provided by Spain, as described under section IV above, the Commission considers that the endorsement by the Asturias regional government was guaranteed by the firm credit rights that Chupa Chups had vis-à-vis several public authorities. The Commission considers, in particular, that Chupa Chups was formally entitled to receive the subsidies in question at the time the credit was agreed, and that, according to the analysis below (cf. assessment of Measure 4), those subsidies were all compatible aid with the exception of EUR 800 000.

In the light of the above, the Commission concludes that the intervention of the Asturias government did not involve any significant risk and therefore did not constitute State aid.

• the Spanish public administration is bound to follow the procedures laid down by General Taxation Law 58/2003 and its implementing law. Those procedures are administrative in nature, and only in some specific cases, as established in the laws, is the administration required to undertake court procedures,

• the legal figures for the deferment of payments or payment by instalments are described in Article 65 of Law 58/2003,

• the possibility of requesting a deferment of payments is open to any taxpayer,

• the granting of a deferment is subject to the provision of securities that cover the amount deferred, payment of the deferral interest, and a 25 % surcharge on the total. In the present case, Chupa Chups provided a mortgage covering EUR 15 240 000, which is the amount that resulted from those calculations,

• Chupa Chups did not benefit from any actual ‘tax suspension’ (Moratoria fiscal), but rather from the possibility of paying by instalments. Thus, deferred payments generated interest according to the legal rates established by the Spanish budgetary laws for each period. Those rates were similar to market rates applied to other types of credits,

• Chupa Chups requested deferral of its tax debts before the period for voluntary payment had expired. This prevented, according to Article 65 of Law 58/2003, the initiation of an execution procedure,

• the deferment agreement established that any credit position of Chupa Chups vis-à-vis the tax administration would be assigned to the cancellation of debts deferred. Given that Chupa Chups is a frequent generator of VAT credits on account of its exporting activities, the schedule of amortisation initially foreseen has been substantially accelerated.

On the basis of the above arguments the Commission considers that Spain has provided sufficient evidence that the rescheduling of Chupa Chups debts for VAT and corporate income tax stemmed from the mere application of Spanish taxation law, and that the tax authorities did not enjoy any discretionary power as regards eligibility of the company, securities necessary or interest rates applied.

In consideration of this, the Commission concludes that Measure 8 is of a general nature and does not constitute State aid.

According to the information submitted by Spain, Measure 2 was granted between 1989 and 1994, i.e. more than 10 years before the earliest action from the Commission in the present case, which was a request for information dated May 2005.

The Commission notes that according to the information provided by Spain, subsidies of EUR 3 600 000 within Measure 3 were granted before 1995, i.e. more than 10 years before the earliest action from the Commission in the present case, and therefore the limitation period provided for by Article 15 of Council Regulation (EC) No 659/1999 has expired. The subsidies thus constitute existing aid.

The Commission approved the LIR scheme by decision of 1 September 1987. Therefore, the EUR 2 550 000 subsidy granted to Chupa Chups under this regional aid scheme constitutes compatible aid.

Regarding the two subsidies granted under Decree 41/2000, the Commission notes that the latter decree was approved by decision of 30 May 2000, that in 2000 and 2002 (when the subsidies were granted) Chupa Chups was still eligible for regional aid, and that the regional aid ceilings for Asturias were respected. Therefore, the two subsidies in question constitute compatible regional aid.

In conclusion, the Commission considers that of the subsidies encompassed by Measure 4, EUR 5 910 000 constitute compatible regional aid and EUR 800 000 constitute incompatible aid. The latter has not yet been paid out by the Spanish authorities.

The Spanish authorities have provided evidence that Measure 5 was granted under the existing aid scheme ‘Actividades del Centro para el Desarrollo Industrial – CDTI – Desarrollo Tecnológico’. Therefore, it constitutes compatible State aid.

The Commission notes that Regulation 1159/2000 concerns information on publicity measures to be carried out by the Member States concerning assistance from the Structural Funds and does not provide any legal basis for the granting of the aid. Despite the Commission’s request in that regard, Spain has not justified in any other manner the compatibility of this subsidy. In particular, Spain has not submitted any evidence that State aid in the context of the ICEX programme ‘Plan de Marcas Españolas’ constitutes an existing aid scheme.

In the absence of information proving the opposite, the Commission finds that none of the exceptions laid down in Article 87(2) and (3) of the Treaty is applicable to the subsidy, and therefore concludes that the aid has to be considered incompatible.