European Commission - Press release
State aid: Commission refers Italy to Court for failure to recover aid from shipping companies in Sardinia
The European Commission has referred Italy to the European Court of Justice (ECJ) for failing to comply with a Commission decision of 2007 (see IP/07/1048) which found an aid scheme for Sardinian shipping companies incompatible with EU state aid rules. As Italy had not notified loans granted on preferential terms by the Sardinian region, it has to recover the difference between the terms at which they were granted and the then market rates. Four years later, this has still not been done.
"Member States have numerous possibilities to support business in line with EU state aid rules. However, when subsidies are found to be illegal they must be recovered swiftly to restore a level playing field and to preserve the effectiveness of the rules themselves", said Joaquín Almunia, Vice President of the Commission in charge of competition policy.
On 10 July 2007, the Commission ordered the recovery of illegal and incompatible state aid granted by the Sardinia region to shipping companies wishing to build, acquire, transform, modify or repair ships. The aid scheme provided loans and leasing arrangements on preferential terms for shipping companies which had their head offices, tax domicile and home port in Sardinia, giving those companies an undue economic advantage over their competitors. The interest rate on the loans was between 3.5-4.5%, well below what the companies would have obtained if they had raised the money on the market.
In October 1997, the Commission adopted a first state aid decision on the Sardinian ship support scheme. This decision was annulled by the Court of Justice in October 2000 on grounds of insufficient proof that intra-Community trade was affected by the measure (joined cases C-15/98 and C-105/99). In July 2007, the Commission readopted the decision with a strengthened motivation. This decision has not been challenged.
Member States have to recover state aid that has been found incompatible by the Commission, within the deadline set in the Commission decision. This is very important because delays in the recovery of unlawful subsidies maintain the distortion of competition created by the aid. That is why Article 14 of Regulation n° 659/99 and the Notice on the implementation of decisions ordering the recovery of unlawful or incompatible aid (see IP/07/1609) provide that Member States should effectively recover the aid from the beneficiary(ies) without delay.
If a Member State does not implement a recovery decision, the Commission may refer the matter to the Court of Justice under Article 108(2) of the Treaty on the Functioning of the EU (TFEU) that allows the Commission to directly refer cases to the Court for violations of EU state aid rules.
If a Member State does not comply with the judgment, the Commission may ask the Court to impose penalty payments under Article 260 of the TFEU.