IP/09/1789
Brussels, 20 th November 2009
State aid: Commission requests information from Spain on recovery of incompatible aid from Magefesa group (Indosa-CMD)
The European Commission has formally requested Spain to provide information concerning measures taken to implement a European Court of Justice (ECJ) ruling of 2 July 2002 (case C-499/99), condemning Spain to recover illegal and incompatible fiscal aid granted to the Magefesa Group in the 1990s. Although the ECJ judgement dates back to 2002, Spain has still not informed the Commission that the incompatible aid has been fully recovered from the beneficiaries. The Commission has therefore sent a so-called 'letter of formal notice' to Spain, the first step of EC Treaty infringement procedures for failure to respect Court judgements (Article 228).
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".
On 2 July 2002, (case C-499/99), the European Court of Justice (ECJ) declared that Spain had failed to fulfil its obligations under the EC Treaty to execute a Commission decision of 20 December 1989 ordering Spain to recover incompatible state aid from Magefesa group, a producer of domestic articles of stainless steel and small electrical appliances, through four of its subsidiaries (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.
Since the ECJ Judgment of 2 July 2002, Spain has not informed the Commission about any measures adopted to fully recover the aid from Indosa and its subsidiary CMD. Therefore, the Commission has sent a letter of formal notice to Spain, requesting it to submit, within two months, clear information on the measures adopted to implement the decision. On the basis of the Spanish reply, the Commission will then assess whether Spain has fulfilled its recovery obligation. If this is not the case, the Commission may formally request Spain to implement the recovery measures (in the form of a 'reasoned opinion'), and if that fails, refer Spain to Court a second time (Article 228 proceedings for failure to respect a Court judgment) and ask the Court to impose fines (periodic penalties, lump sums or both, see MEMO/05/482 ) on Spain until the aid is fully recovered.
This approach is fully in line with the State Aid Action Plan presented by the Commission in June 2005 (see IP/05/680 ) to ensure an effective state aid control.
More general information on infringements is available at: http://ec.europa.eu/community_law/infringements/infringements_228_en.htm