Only loans 1, 5, 6, 7, 9, 10, 16, 17, 20, 21 and 23 granted by KfW and Bayern LB, as referred to in the opening decision, are relevant for the purposes of this Decision.

The interest rates for all the loans referred to in recital 19 were established in the relevant loan agreements. The base rate was determined using a maturity-dependent interbank rate published in Reuters information system on page DGZF at 11:00 am (Munich/Frankfurt local time) on the day the interest rate was set (long-term public bonds yield of Deka Bank). The risk margins were agreed in the respective loan agreements.

Loans 5, 6 and 7 were granted under the KfW infrastructure programme in accordance with the loan agreement of […] to support the provision of infrastructure from a regional and economic development perspective. The interest rates for loans 5, 6, and 7 were fixed for ten years. After the expiry of the fixed-rate period for these loans in 2009–2011, the interest rates will be adjusted to the published Commission reference rate. The risk margin agreed in the loan agreement remains unchanged.

1. (a)

   BayernLB: […]

2. (b)

   KfW: […]

1. (a)

   […];

2. (b)

   […];

3. (c)

   […];

4. (d)

   […].

1. (a)

   the profit-and-loss transfer agreements between the T2 Companies and their shareholders (FMG and LH) are abandoned or amended with a negative impact on the banks;

2. (b)

   the Free State of Bavaria, Germany and the City of Munich (individually or together) lose the absolute majority in the capital and/or voting rights in FMG; or

3. (c)

   the stake and/or voting rights of the Free State of Bavaria in FMG fall to 25 % or less.

The terms on which loans 1, 5, 6, 7, 9, 10, 16, 17, 20, 21 and 23 were granted therefore seemed to be more favourable than the proxy established by the Commission for the market rate in application of the 2008 Reference Rate Communication.

The Commission also expressed its doubts on the question of the imputability of the measures to the State. It seemed that the approval of the supervisory board was not required for the loans granted by BayernLB and LfA.

On 30 March 2000 FMG and Immo T2 concluded a contract under which FMG granted Immo T2 the right to use land parcels 4935/3 and 4881 covering an area of approximately 170 000 m² and to construct Terminal 2 there.

In return, Immo T2 pays an annual rent of […] plus VAT (approximately EUR […]) for the exclusive-use rights. This rent is paid quarterly in arrears from the beginning of the operation of Terminal 2. In order to take into account changes in property prices and interest rates, the amount of the annual rent will be reviewed after […] years and adjusted if necessary.

The duration of the contract is […] years. […]

With regard to the land-use contract, the Commission could not rule out the possibility that the rent paid by Immo T2 to FMG for the land on which Terminal 2 was constructed is a market price.

The Commission also expressed doubts about the imputability of the measures to the State. The Commission had no information as to whether the public shareholders in FMG were involved in the conclusion of the land-use agreement.

The Commission examined whether the rent referred to in recital 31 and the loans referred to in recital 19 would be compatible with the internal market if they constituted state aid. Loans 16, 17, 20, 21 and 23 in particular seemed to contain operating aid that is unlikely to meet the requirements of Article 107(2) and (3) TFEU to be considered exceptions to the general prohibition on state aid.

With regard to the loans granted to the T2 Companies, Germany first comments on the suitable framework for the assessment of whether the loans were in line with market conditions. It rejects an assessment of the loans in question on the basis of the 2005 Commission Notice. It is not appropriate to compare the overall interest rates for the individual loans granted to the T2 Companies with the Commission's reference rate. Rather, one should analyse the respective risk margins and compare them with a relevant market benchmark. The base rate fluctuates from day to day and neither party is able to exert any influence over it. Therefore, the Commission should instead use market comparators as a benchmark for the risk margins because the risk margin referred to in the 2005 Commission Notice is generally not taken into consideration by private creditors when entering into loan agreements. Moreover, Germany argues that the inadequacy of the 2005 Commission Notice was also recognised by the 2008 Reference Rate Communication, which also takes into account the rating of the borrower and the collateral provided.

Nor is it necessary, in Germany’s view, for the Commission to apply the 2008 Reference Rate Communication, since the Commission should instead base its assessment on market benchmarks where market comparators exist. Otherwise, the competitiveness of public credit institutions would be seriously jeopardised, since the specific terms could ultimately be determined only by the Commission’s reference rate and no longer on the basis of actual market conditions.

Germany further argues that the terms of the loans in question are explained by the very good rating and very high creditworthiness of FMG and LH. In this context, the assessment of the creditworthiness must be carried out at the level of FMG and LH, because, where a profit-and-loss transfer agreement exists between subsidiaries and their parent companies, it is absolutely standard practice for banks to take into account only the creditworthiness of the parent companies.

Germany observes that, in contrast to the syndicated loan granted to FMG, substantial collateral was provided for the loans at stake. In addition to the collateral referred to in the opening decision, it is important to note that […] in order to collateralise the loans. This demonstrates that an even lower risk margin would be appropriate for the loans at stake than the one used for the syndicated loan, which was between […] and […] bps.

Germany further explains that there was no additional collateral other than that referred to in recitals 40 and 45 of the opening decision. According to Germany, on 31 December 2002 the value […] amounted to EUR […] and the value of the corresponding debts amounted to EUR […]. Germany adds that the value of […] increased to EUR […] on 31 December 2003 and the value of the corresponding debts amounted to EUR […]. Neither FMG, LH or the shareholders in FMG provided any additional guarantees.

Germany argues that Table 2 shows that the risk margins are very volatile over time and that it is accordingly not acceptable to use the risk margins that were applicable only in a particular month in order to draw conclusion about whether the risk margins for the loans in question were set under normal market conditions.

However, the situation has changed in recent years. Although those territorial planning considerations and administrative structures may still play a role in some cases, the majority of airports have been incorporated under commercial law in order to allow them to operate under market conditions in an increasingly competitive environment. The process of transfer to the private sector has normally taken the form of privatisation or increasing opening-up of capital. In recent years, private equity firms and investment and pension funds have shown a great interest in acquiring airports.

In recent years the Union's airport industry has undergone fundamental organisational changes that reflect not only the active interest of private investors in the airport sector, but also a change of attitude on the part of the public authorities to private-sector involvement in airport development. This has led to greater diversity and complexity of the functions undertaken by airports.

These recent changes have led in turn to a change in the commercial relationships between airports. Whereas in the past airports were mostly managed as infrastructures with a view to ensuring accessibility and territorial development, for several years more and more airports have also been pursuing commercial objectives and are competing with each other in order to attract air traffic.

In the light of recitals 74 to 80, the Commission takes the view that, before the General Court’s judgment in Aéroports de Paris, the Member States could assume that financing measures definitively adopted before the Aéroports de Paris judgment did not constitute state aid and accordingly did not need to be notified to the Commission. It follows that the Commission cannot call into question, on the basis of the state aid rules, financing measures definitively adopted before the judgment in Aéroports de Paris.

Although financing measures that were definitively adopted before any competition developed in the air transport sector did not constitute state aid when adopted, they should now be considered existing aid pursuant to Article 1(b)(v) of Regulation (EC) No 659/1999.

With regard to the present case and the loans granted to the T2 Companies to finance the construction of Terminal 2, in the opening decision the Commission considered that the interest rates were set at the time the loans were drawn, i.e. the date on which the money was disbursed to the T2 Companies.

However, Germany has explained during the formal investigation procedure that the terms for loans 5, 6 and 7 were irrevocably established in the loan agreement dated 31 August 1999 and for loans 1, 9, 10, 16, 21 and 23 in the loan agreement dated 13 September 2000 respectively. In addition, Germany provided further evidence that the terms of the loan agreements dated 31 August 1999 and 13 September 2000 were established on the basis of a binding loan commitment dated 2 December 1998. The terms of these loans have not been amended since.

The Commission observes that the terms for loans 1, 5, 6, 7, 9, 10, 16, 21 and 23 were irrevocably established prior to the Aéroports de Paris judgment (i.e. before 12 December 2000). As a result, the Commission concludes that it is not entitled to examine and call into question, under the state aid rules, loans 1, 5, 6, 7, 9, 10, 16, 21 and 23.

In the light of the legal situation referred to in recitals 74 to 82, the Commission will limit its assessment to the loans 17 and 20 granted to T2 Operating Company under the supplementary loan agreement concluded in 2003.

In this regard the Commission notes that T2 Operating Company operates Terminal 2 on a commercial basis, renting it to airlines, restaurants and business owners against payment of fees. For the purpose of assessing loans 17 and 20 under the state aid rules, T2 Operating Company should therefore be considered an undertaking engaged in an economic activity within the meaning of Article 107(1) TFEU.

In the present case, the Commission must assess whether the terms of loans 17 and 20 provided to T2 Operating Company confer an economic advantage on it that the recipient undertaking would not have obtained under normal market conditions.

Germany is of the opinion that the ‘market-economy lender principle’ was fully complied with as loans 17 and 20 were provided on market conditions. In order to justify the terms of the loans in question, Germany compares the financing of T2 Operating Company with the financing conditions available to Deutsche Telekom AG, Bayer AG, Volkswagen AG and Deutsche Börse AG as well with a syndicated loan granted to FMG in 2006.

According to its decision-making practice, in order to determine whether the financing under assessment was granted on preferential terms, the Commission may, in the absence of other proxies, compare the interest rate on the loan in question with the Commission’s reference rate. The Commission’s reference rate is established pursuant to the methodology laid down in the 2008 Reference Rate Communication.

The 2008 Reference Rate Communication establishes a method for setting reference and discount rates that are applied as a proxy for market rates. However, because the Commission reference rate is merely a proxy, where the Commission is in possession in a specific case of other indicators of the interest rate that the borrower could have obtained on the market, it may base its credit-rating assessment on those indicators.

The Commission can conclude that loans 17 and 20 were granted in line with market conditions. The Commission notes that, in the absence of an economic advantage, it is not necessary to clarify whether the measures are imputable to the State.

As the cumulative criteria pursuant to Article 107(1) TFEU are not fulfilled, the Commission considers that loans 17 and 20 do not contain any state aid within the meaning of Article 107(1) TFEU.

As pointed out in recitals 74–81, until December 2000 the legal classification of the operation and construction of airport infrastructures for the purposes of the state aid rules was unclear. Although competition developed gradually in the sector, the Commission and the Member States used to consider those activities to be activities falling within the public policy remit rather than economic activities.

With regard to the land use agreement between FMG and Immo T2, during the formal investigation procedure Germany clarified that the conditions for the use of land parcels 4935/3 and 4881 were irrevocably agreed in the land-use agreement concluded on 30 March 2000.

The Commission notes that the conditions for the use of land parcels 4935/3 and 4881 were irrevocably decided prior to the Aéroports de Paris judgment (i.e. before 12 December 2000). Consequently, even if that measure implied an advantage, the Commission is not entitled to examine it and call it into question under the state aid rules for the reasons explained in section 6.1.1 of this Decision.