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Brussels, 20 th November 2009

State aid: Commission requests Spain to comply with Court judgment on recovery of incompatible aid under company tax schemes

The European Commission has formally requested Spain to implement a European Court of Justice (ECJ) judgment (case C-177/06) declaring that Spain had failed to recover illegal and incompatible state aid granted by certain Basque Provinces, as it was ordered by Commission decisions of December 2001. Although the ECJ judgement dates back to 2007, the Commission has concluded that Spain has still not completed the recovery of the aid granted by the Provinces of Guipúzcoa and Álava. The Commission's request takes the form of a reasoned opinion, the second step of infringement proceedings for failure to respect a Court judgement (Article 228 of the EC Treaty). If Spain continues to fail to comply with the ECJ decision, the Commission may refer it to the Court for a second time and request the ECJ to impose fines until the aid has been fully recovered. The fines can take the form of periodic penalty payments, lump sums or both (see also MEMO/05/482) .

Competition Commissioner Neelie Kroes commented: "The recovery of aid that gave companies an unfair advantage over their competitors is essential to limit distortions of competition in the Single Market".

O n 20 December 2001, the Commission found that fiscal aid schemes granting a 10 year corporate tax exemption for newly created firms in the three Basque Provinces provided a selective advantage to certain companies and ordered Spain to recover aid paid under the schemes (see IP/01/1875 ). On 20 September 2007 (case C-177/06) , the ECJ held that Spain had failed to fulfil the recovery obligations stemming from these decisions.

On 14 April 2009, the Commission requested information on the recovery of the aid from Spain through a Letter of Formal Notice, the first step of infringement proceedings for failure to respect a Court ruling (Art. 228 of the EC Treaty). On the basis of the information provided by the Spanish authorities, the Commission's reasoned opinion concludes that the illegal aid granted by the Provinces of Guipúzcoa and Álava has not yet been paid back entirely.

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 by the Commission 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:

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