Brussels, 18 th June 2009
State aid: Commission refers Spain to Court of Justice for failure to recover illegal aid from Magefesa Group
The European Commission has decided under EC Treaty state aid rules to refer Spain to the European Court of Justice for failure to comply with a Commission decision of 14 October 1998 (see ). The decision ordered Spain to recover illegal and incompatible state aid from Indosa-CMD, a subsidiary of the Magefesa Group. To date, Spain has not achieved full recovery of the illegal aid.
On 20 December 1989, the Commission found that the Magefesa Group, a producer of domestic articles of stainless steel and small electrical appliances, had received illegal and incompatible aid from several Spanish regions through four subsidiaries of the Group (Migasa, Gursa, Cunosa and Indosa). The aid was granted in the form of loan guarantees, loans at non-market conditions, non-refundable subsidies and interest subsidies. On 14 October 1998, the Commission adopted a second negative decision concerning new unlawful and incompatible aid granted to the Magefesa Group in the form of the persistent non-payment of taxes and social security contributions. According to the Commission's 1998 decision, the main burden of the aid repayments was to remain with the subsidiaries.
Already back in 1999, the Commission brought an infringement action against Spain for failure to implement this decision (case C-499/99). In the subsequent 2002 judgment, the ECJ ruled that Spain had failed to adopt all necessary measures concerning the 1998 decision as regards three of the four subsidiaries. As regards the fourth beneficiary, Indosa, the Court only ruled that Spain had failed to inform the Commission of its planned actions, since Spain had claimed during the Court proceedings that this subsidiary was due to be put into liquidation. However, following a close investigation of this liquidation process, which raised complex and lengthy judicial issues in national courts, it now appears that the measures taken as regards Indosa are not satisfactory. This is because, contrary to the information submitted by Spain to the ECJ, Indosa has continued its activity through a new subsidiary, CMD, without repaying the aid.