Judgment of the Court (Sixth Chamber) of 12 March 2020 – Commission v Italy (Recovery of unlawful aid granted to the hotel industry in Sardinia)

(Case C‑576/18) ( 1 )

(Failure of a Member State to fulfil obligations – Judgment of the Court establishing a failure to fulfil obligations – Non-compliance – Recovery of unlawful aid granted to the hotel industry in Sardinia – Article 260(2) TFEU – Pecuniary penalties – Penalty payment and lump sum)

1. Actions for failure to fulfil obligations – Judgment of the Court establishing the failure of a Member State to fulfil its obligations – Period for implementation – Reference date for assessing whether there has been a failure to fulfil obligations – Date of expiry of the period prescribed in the letter of formal notice (Art. 260(2) TFEU) (see paras 88, 89)

2. Actions for failure to fulfil obligations – Non-compliance with the obligation to recover unlawful aid – Defences – Absolute impossibility of implementation – Absolute impossibility of implementation not being able to arise from a stay of execution ordered by the national court (Art. 260 TFEU) (see paras 101-105)

3. Actions for failure to fulfil obligations – Non-compliance with the obligation to recover unlawful aid – Defences – Legitimate expectations entertained by the recipients – Not included (Art. 108 TFEU) (see para. 106)

4. Actions for failure to fulfil obligations – Judgment of the Court establishing the failure of a Member State to fulfil its obligations – Breach of the obligation to comply with the judgment – Pecuniary penalties – Subject matter – Choice of the appropriate penalty – Elements to be taken into consideration – Discretion of the Court – Duplication of penalties – Whether permissible (Art. 260(2) TFEU) (see paras 134-136, 163)

5. Actions for failure to fulfil obligations – Judgment of the Court establishing the failure of a Member State to fulfil its obligations – Breach of the obligation to comply with the judgment – Pecuniary penalties – Periodic penalty payment – Imposition of a penalty payment – Condition – Failure to comply continuing up to the time of the Court’s examination of the facts (Art. 260(2) TFEU) (see paras 137-146)

6. Actions for failure to fulfil obligations – Judgment of the Court establishing the failure of a Member State to fulfil its obligations – Breach of the obligation to comply with the judgment – Pecuniary penalties – Periodic penalty payment – Determination of the form to be taken and of the amount – Discretion of the Court – Criteria (Art. 260(2) TFEU) (see paras 147-149)

7. Actions for failure to fulfil obligations – Judgment of the Court establishing the failure of a Member State to fulfil its obligations – Breach of the obligation to comply with the judgment – Pecuniary penalties – Periodic penalty payment – Calculation of the amount – Criteria – Gravity of the infringement – Failure to recover aid incompatible with the internal market – Vital nature of the Treaty rules State aid – Mitigating circumstance – Phased aid recovery plan accepted by the Commission (Art. 260(2) TFEU) (see paras 150-155)

8. Actions for failure to fulfil obligations – Judgment of the Court establishing the failure of a Member State to fulfil its obligations – Breach of the obligation to comply with the judgment – Pecuniary penalties – Periodic penalty payment – Calculation of the amount – Criteria – Duration of the infringement – Assessment at the date of assessment of the facts by the Court (Art. 260(2) TFEU) (see paras 156, 157)

9. Actions for failure to fulfil obligations – Judgment of the Court establishing the failure of a Member State to fulfil its obligations – Breach of the obligation to comply with the judgment – Pecuniary penalties – Periodic penalty payment – Calculation of the amount – Criteria – Payment capacity – Assessment at the date of assessment of the facts by the Court (Art. 260(2) TFEU) (see paras 158, 159)

10. Actions for failure to fulfil obligations – Judgment of the Court establishing the failure of a Member State to fulfil its obligations – Breach of the obligation to comply with the judgment – Pecuniary penalties – Imposition of a lump sum payment – Discretion of the Court – Criteria for assessment – Effective prevention of future repetition of similar infringements (Art. 260(2) TFEU) (see paras 164-167)

Operative part

The Court:

1. Declares that, in failing to take, by the date of expiry of the period prescribed in the letter of formal notice issued on 11 July 2014 by the European Commission, all the measures necessary to comply with the judgment of 29 March 2012, Commission v Italy (C‑243/10, not published, EU:C:2012:182), the Italian Republic has failed to fulfil its obligations under Article 260(1) TFEU;

2. Orders the Italian Republic to pay the European Commission a penalty payment of EUR 80000 per day from the date of delivery of the present judgement until the date of compliance with the judgment of 29 March 2012, Commission v Italy (C‑243/10, not published, EU:C:2012:182);

3. Orders the Italian Republic to pay to the European Commission a lump sum EUR 7500000;

4. Orders the Italian Republic to pay the costs.

( 1 ) OJ C 399, 5.11.2018.