State aid: Commission refers Italy to Court for failure to recover incompatible aid from Italian metal producers

European Commission - Press release

State aid: Commission refers Italy to Court for failure to recover incompatible aid from Italian metal producers

Brussels, 08 February 2012 - The European Commission has referred Italy to the Court of Justice for not complying with a Commission decision of 23 February 2011 (see IP/11/215) finding that subsidised electricity tariffs that Italy had granted to metal producers Portovesme, ILA and Eurallumina were incompatible with EU state aid rules and needed to be recovered from the beneficiaries. To date, Italy has not implemented this decision.

'The swift recovery of incompatible aid is essential to remedy the distortion of competition that it caused in the Internal Market' said Commission Vice President in charge of competition policy Joaquín Almunia.

On 23 February 2011, the Commission found that preferential electricity tariffs granted by Italy to Portovesme, ILA and Eurallumina provided those companies with an undue economic advantage over their competitors and distorted competition in the internal market. The aid, which was financed by all electricity users in Italy, merely reduced their operating costs and improved their competitive position without furthering any goal of common interest. The Commission, therefore, ordered Italy to recover approximately €18 million from the beneficiaries.

Italy was under an obligation to immediately and effectively implement the decision. However, almost a year after the adoption of the decision, Italy has not recovered the aid. The Commission has therefore decided to refer Italy to the Court.

Background

Member States have to recover State aid that has been found incompatible by the Commission, within the deadline set out 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 size the Court for violations of EU state aid rules.

If a Member State does not comply with the Court's judgment, the Commission may ask the Court to impose penalty payments under Article 260 of the TFEU.