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IP/09/1028

Brussels, 25 th June 2009

State aid: Commission refers Italy to Court for failure to respect Court ruling to recover illegal aid

The European Commission has decided to refer Italy to the European Court of Justice (ECJ) for failure to implement a 2004 ruling by the Court of Justice (case C-99/02) confirming a Commission decision of 1999 finding that Italy had granted illegal and incompatible aid and ordering its recovery. The illegal aid in question took the form of exemptions from social security contributions in cases where companies could not prove that new jobs had been created or prove that the workers hired had special difficulties entering or re-entering the employment market. Although over five years have elapsed since this judgement, Italy has still only recovered a small part of the overall aid amount estimated at about 281 million euros. The Commission therefore now requests the ECJ to impose fines on Italy under Article 228 of the EC Treaty.

Competition Commissioner Neelie Kroes commented: "The Commission will take all necessary legal steps to ensure that Member States comply with their obligations to recover illegal and incompatible state aid."

On 1st April 2004 (case C‑99/02), the ECJ held that Italy had failed to meet the recovery obligations imposed in the Commission Decision of 11 May 1999 (see IP/99/321 ). The decision concerned aid measures aimed at promoting employment. The Commission had found part of the aid incompatible with the Single Market because it was not suitable to attain the declared objective of creating jobs and had therefore to be recovered from the beneficiaries.

To date, Italy has still not informed the Commission that the recovery has been completed. Based on the most recent calculations presented by Italy, less than 20% of the total aid amount estimated at about 281 million euros has been recovered more than ten years after the Commission's original recovery decision and more than five years after the previous ECJ judgement.

The Commission has therefore decided to request the ECJ to impose fines in the form of a daily penalty payment, to be calculated from the date of the ECJ judgement to be delivered and lasting until Italy manages to complete the recovery, and of a lump sum payment covering the period since the Court's previous judgement in 2004. In calculating the fines the Commission will apply its 2005 Communication on the application of Article 228. The proposal will thus take into consideration the seriousness of the infringement, the very significant period which has already elapsed since the previous Court judgement and the situation of the Member State.

Background

The Commission's firm approach towards Member States that fail to recover illegal aid is fully in line with the State Aid Action Plan presented in June 2005 (see IP/05/680 ) and with the notice on the implementation of recovery decisions (see IP/07/1609 ).

More general information on infringements is available at:

http://ec.europa.eu/community_law/infringements/infringements_en.htm


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