28. 2. 90 Official Journal of the European Communities No C 48/5 
STATE AID 
C 37/89 (ex NN 50/89) 
(Italy) 
(Articles 92 to 94 of the Treaty establishing the European Economic Community) 
(90/C 48/05) 
Commission communication pursant to Article 93 (2) of 
the EEC Treaty to other Member States and interested 
parties concerning aid which the Italian Government has 
decided to establish under the draft Law No 4230 
entitled 'Regularization of the effects produced by 
Orders No 174 of 15 May 1989, No 254 of 13 July 1989 
and No 318 of 13 September 1989'. 
By letter SG(89)D/10505 of 7 August 1989 to the Italian 
Government, the Commission decided to initiate the 
procedure provided for in Article 93 (2) of the EEC 
Treaty in respect of Order No 174 of 15 May 1989 
entitled 'Tax measures to promote the reorganization of 
the structures of industrial production'. 
By letter from the Italian Permanent Representation 
dated 18 September 1989, the Italian Government 
informed the Commission that it had on 13 September 
1989 introduced a new order under the same title and 
bearing the number 318. 
In notifying the new order, the Italian Government 
stated that, in its opinion, the order now met in full the 
concerns expressed by the Commission in its letter 
initiating infringement proceedings. 
Before it could express its views on the content of the 
new order, which did at first sight seem to take account 
of the objections earlier expressed, the Commission 
learned that the order was no longer effective, since it 
had not been ratified by Parliament. 
The Commission subsequently learned through the press 
that the Italian Government had adopted draft Law No 
4230, tabled on 4 October 1989 before Parliament, to 
maintain the validity of the acts and provisions adopted 
and safeguard the effects produced and the legal 
relationships established by Orders No 174 of 15 May 
1989, No 254 of 13 July 1989 and No 318 of 13 
September 1989. The Commission deplores the fact that the new draft 
Law was not notified to it in accordance with the 
provisions of Article 93 (3) of the EEC Treaty. As far as 
the content of the draft is concerned, the Commission 
has serious doubts as to its compatibility with the 
common market. The new draft Law has the same 
content as Order No 174, in respect of which the 
Commission had initiated the Article 93 (2) procedure. 
Indeed, whereas the order could in theory be applied to 
several operations, albeit limited in time, the sole purpose 
of the draft Law is to safeguard the legal effects of the 
Enimont operation, the only operation carried out under 
the non-ratified order in the period from 15 May to 28 
September 1989, having been endorsed by the CIPE 
(interministerial economic planning committee). There is 
no doubt that Montedison, the sole recipient of the tax 
allowances in question, will see its financial situation 
enhanced, which will allow it to influence competition 
both in Italy vis-d-vis Italian competitor firms operating 
in the same industrial sector and on the European 
market. 
On the basis of the arguments set out in its letter of 7 
August 1989, the Commission has decided to extend the 
Article 93 (2) procedure to include draft Law No 4230. 
Consequently, within the framework of the proceedings 
already initiated, the Commission hereby gives the 
Italian Government notice to submit its comments on the 
extension of the procedure to the abovementioned draft 
Law. 
In addition, the Commission would draw the Italian 
Government's attention to the letter it sent all Member 
States on 3 November 1983 on the subject of their obli­
gations under Article 93 (3) of the EEC Treaty and the 
communication it published in the Official Journal of the 
European Communities, No C 318, 24 November 1983, 
page 3, in which it reminded Member States that, where 
they grant aid unlawfully, i. e. before the Article 93 (2) 
procedure has resulted in a final decision, the 
Commission may require them to recover it. 
No C 48/6 Official Journal of the European Communities 28. 2. 90 
It should be pointed out to the Italian Government that 
pursuant to Article 93 (3) of the EEC Treaty, which 
stipulates that the initiation of proceedings has a 
suspensory effect, the tax measures introduced by means 
of Order No 174, which has now ceased to be effective, 
must not be implemented through the Italian 
Parliament's adoption of draft Law No 4230, whose 
object it is to give effect to the acts and provisions 
adopted pursuant to the abovementioned Order, until 
such time as the Commission has taken a final decision 
in accordance with Article 93 (2). 
Commission communication pursuant to Article 93 (2) of 
the EEC Treaty to other Member States and interested 
parties concerning aids which Italy has decided to grant 
for the plan to set up a drop-forging press at Foggia. 
The Commission has learned that the Italian 
Government has granted aid for the abovementioned 
project. 
By letters dated 12 December 1988 and 23 January 1989, 
and again by telex sent on 24 July 1989, the Commission 
asked the Italian Government to notify the abovemen­
tioned measure, in accordance with Article 93 (3) of the 
EEC Treaty, or to inform it whether aid had been 
granted for the abovementioned project under a scheme 
already approved by the Commission. 
It appears in particular that regional aid has been 
granted to 'Figli di Stefano Bertoldo' for the setting up 
of a drop-forging press of 12 000 tonnes at Foggia 
(Southern Italy). 
Since the rate of utilization of existing capacity within 
the Community appears to be very low, the setting up of 
a new unit of this type through State aid threatens to 
distort trade between Member States and to distort 
competition to an extent contrary to the common 
interest. The lack of any reply to the three written 
requests for information presented by the Commission to 
the Italian authorities means that there is at present 
nothing to contradict such a presumption that compe­
tition is being distorted. The Commission hereby gives the other Member States 
and interested parties notice to submit their comments on 
the measures in question within one month from the date 
of the publication of this notice to: 
Commission of the European Communities, 
Rue de la Loi 200, 
B-1049 Brussels. 
The comments will be communicated to the Italian 
Government. 
In the light of these observations, the Commission would 
inform the Italian Government that it has initiated the 
procedure laid down in Article 93 (2) of the EEC Treaty 
in respect of the measure described above. 
The Commission hereby gives the Italian Government 
notice, as part of that procedure, to submit its comments 
within one month from the date of this letter. 
The Commission would remind the Italian Government 
that Article 93 (3) of the EEC Treaty prevents the 
proposed measures being put into effect until the Article 
93 (2) procedure has resulted in a final decision. 
The Commission would draw the Italian Government's 
attention to the letter it sent all Member States on 3 
November 1983 on the subject of their obligations under 
Article 93 (3) of the EEC Treaty and the communication 
it published in the Official Journal of the European 
Communities No C 318, 24 November 1983, p. 3, in 
which it reminded Member States that, where they grant 
aid unlawfully, i. e. before the Article 93 (2) procedure 
has resulted in a final decision, the Commission may 
require them to recover it. 
The Commission hereby gives the other Member States 
and interested parties notice to submit their comments on 
the measures in question within 1 month from the date 
of publication of this notice to: 
Commission of the European Communities, 
200 rue de la Loi, 
B-1049 Brussels. 
The comments will be communicated to Italy. STATE AID 
C 44/89 (NN 1/89) 
(Italy) 
(Articles 92 to 94 of the Treaty establishing the European Economic Community) 
(90/C 48/06)