State aid - Italy

(Articles 87 to 89 of the EC Treaty)

Commission notice under Article 88(2) of the EC Treaty to other Member States and interested parties on aid notified by Italy (Sicily) in favour of agricultural guarantee consortia (consorzi fidi) - Regional Law No 23/95 and Article 5 of draft Law No 975-955 as far as applicable to the production, processing and marketing of Annex I agricultural products

(2002/C 1/04)

By letter of 19 September 2001, reproduced below, the Commission informed Italy of its decision to close the Article 88(2) procedure.

"The Commission wishes to inform Italy that, having examined the withdrawal of notification supplied by your authorities on the measure referred to above, pursuant to Article 8(2) of Council Regulation (EC) No 659/1999(1) it has decided to close the procedure laid down in Article 88(2) of the EC Treaty.

I

By letter dated 9 March 1995, registered on 14 March 1995 the Italian Permanent Representation to the European Union notified the Commission, in accordance with Article 88(3) of the Treaty, of draft Regional Law (Sicily) No 839 (aid scheme N 271/95) on aid which the region intended to grant to SMEs in various sectors (agriculture, fisheries, industry, transport, tourism, trade, services) with a view to establishing and operating collective guarantee consortia to facilitate access by their members to credit and various financial services.

By letter of 28 April 1995, registered on 7 June 1995, the same authorities sent the Commission the text of Regional Law No 23/95 (approving the above draft law, with amendments) and the text of draft Regional Law No 975-955, Article 5 of which amended Law No 23/95 (aid scheme N 518/95).

Since the second notification (registered as aid N 518/95) covered the scope of, and replaced the first notification (registered as aid N 271/95), the latter was deleted from the register of notifications.

The Commission decided to scrutinise the texts in question individually according to the production sector involved. The aid scheme was, therefore, subdivided as follows:

No 518/B/95 agriculture,

No 518/C/95 transport,

No 518/D/95 fisheries,

No 518/A/95 other sectors.

With regard to aid No 518/B/95 (agriculture), following the request of information by Commission services sent by telex dated 2 August 1995/VI/029959, and the subsequent reminder sent by telex dated 8 November 1995/VI/041218, the competent authorities sent additional information by letter of 20 November 1995, registered on 23 November 1995. Following the request of Commission services by letter dated 15 January 1996, by telex of 31 January 1996 the competent authorities consented to a prolongation of the deadline for the examination of the file.

II

By letter dated 16 April 1996 SG(96) D/3905, the Commission informed Italy that it had decided to initiate the procedure laid down in Article 88(2) of the EC Treaty in respect of the aids provided by Regional Law (Sicily) No 23/95(2) and by Article 5 of draft Law No 975-955(3) as far as the production, processing and marketing of agriculture products were concerned.

In particular the aid scheme introduced by the provisions in question consisted of a new mechanism to support agricultural enterprises by facilitating their access to credit and various financial services (factoring, leasing, collective guarantee, subsidised credit operations, etc.) which had been little used by small-scale undertakings. The scheme applied to the agricultural sector the model already in place for small businesses in other production sectors (accepted by the Commission under the 'de-minimis' rule).

The purpose was to encourage businesses to form legal entities, either a cooperative or consortium of cooperatives (called consorzi fidi), which run one or several separate funds to guarantee (and/or reduce the cost of) certain financial operations carried out by their members.

This involved in particular 'risk coverage funds' ('fondi rischi') to guarantee borrowing, leasing and factoring operations and a 'guarantee fund' ('monte fideiussioni') to guarantee credit operations.

The public intervention took the form of aid (usually subsidies) granted to the guarantee consortia at various moments in time. These subsidies were aimed at enabling the consortia to offer their members aid in the form of guarantees for the financial operations involved and reductions in the financial costs of these operations.

The aid measures concerned were in particular the following ones:

- public contribution to the guarantee funds and risk funds,

- start-up aid for the guarantee consortia,

- reduction in factoring and leasing costs,

- subsidised credit for management operations and for consolidation of liabilities,

- coverage of losses when guarantees were called in.

The Commission had doubts about the compatibility of the above aid measures with Article 87(3)(c) as, on the basis of the information available, they did not appear to meet the requirements established by the State aid rules which were then applied for the examination of these types of aid measures. The said rules were specified in the Commission decision to initiate the procedure envisaged by Article 88(2) of the Treaty on the aid measures concerned, which was published in the Official Journal of the European Communities(4).

Following the above Commission decision Italy submitted comments by letters of 17 March 1997, registered on 26 March 1997. Following the publication of the decision in the Official Journal of the European Communities(5) no comments were received from third parties.

III

By letter of 25 April 2001, the Italian authorities asked the withdrawal of the notification registered under aid C 9/96 (Regional Law 28 March 1995, No 23 - Aid to guarantee consortia in the agricultural sector) and specified that the measures concerned had not been implemented(6).

In view of the letter from the Italian authorities announcing the withdrawal of the contested part of the aid measure and in accordance with Article 8(2) of Regulation (EC) No 659/1999(7) the Commission has decided to close this procedure."

(1) Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (OJ L 83, 27.3.1999 p. 1).

(2) Law No 23, 28 March 1995 - Rules for collective guarantee financial consortia between SMEs. Provisions interpreting and modifying the provisions of Regional Laws No 36/1991, No 15/1993 and No 25/1993.

(3) The said Article 5 (Integration to the regional law on guarantee consortia) provides that: "The provisions contained in Article 1 and ff. of the Law approved by the Regional Assembly on 16 March 1995, providing for "Rules for collective guarantee financial consortia between SMEs. Provisions interpreting and modifying the provisions of Regional Laws No 36/1991, No 15/1993 and No 25/1993" apply also to undertakings which request a financing for the consolidation of short-term banking debts, for a period no longer than seven years".

(4) OJ C 150, 24.5.1996.

(5) OJ C 150, 24.5.1996.

(6) In the said letter the competent authorities also specified that Article 99 of Regional Law No 32/2000 had introduced a new aid regime for the establishment of guarantee consortia ("consorzi fidi") concerning also the agricultural sector, and that the said Regional Law was in the course of notification. Moreover, it must be noted that Article 13 of Regional Law No 23/95 made the envisaged financing conditional on the respect of the applicable EC State aid rules and on the conclusion of the procedure envisaged by paragraphs 2 and 3 of Article 93 (now Article 88) of the EC Treaty.

(7) OJ L 83, 27.3.1999, p. 1.