Judgment of the Court (Fifth Chamber) of 24 February 1994. - Terni SpA and Italsider SpA v Cassa Conguaglio per il Settore Elettrico. - Reference for a preliminary ruling: Consiglio di Stato - Italy. - State aid - Interpretation of Decision Nº 83/396/ECSC - Determination of the beneficiaries of aid - Validity of Decision Nº 83/396/ECSC - Principle of equal treatment of public and private undertakings. - Case C-99/92.



European Court reports 1994 Page I-00541



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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1. ECSC - Aid for the steel industry - Authorization by the Commission - Interpretation of an authorization decision for the purposes of determining the beneficiaries of the aid authorized

(Commission Decision No 83/396)

2. ECSC - Aid to the steel industry - Authorization by the Commission - Separate aid for undertakings in the public sector and those in the private sector, but authorized on the basis of the same criteria - No discrimination

(ECSC Treaty, Art. 4(b); Commission Decision No 83/396)

Summary

1. Article 1 of Decision No 83/396 concerning the aids that the Italian Government proposes to grant to certain steel undertakings authorizes the grant of aid consisting in the reimbursement of increases in the electricity surcharge solely to undertakings belonging to the private sector when the decision was adopted.

2. A Commission decision authorizing aid that a Member State proposes to grant solely to private undertakings does not infringe Article 4(b) of the ECSC Treaty, which prohibits measures or practices which discriminate between producers, if, first, other aid also authorized is intended solely for undertakings in the public sector of that Member State and, secondly, all authorized aid was assessed on the basis of capacity reductions to which each recipient or group of recipients had agreed.

Parties

In Case C-99/92,

REFERENCE to the Court under Article 41 of the ECSC Treaty by the Consiglio di Stato (Italy) for a preliminary ruling in the proceedings pending before that court between

Terni SpA,

Italsider SpA

and

Cassa Conguaglio per il Settore Elettrico

on the interpretation and validity of Commission Decision No 83/396/ECSC of 29 June 1983 concerning the aids that the Italian Government proposes to grant to certain steel undertakings (Official Journal 1983 L 227, p. 24),

THE COURT (Fifth Chamber),

composed of: J.C. Moitinho de Almeida, President of the Chamber, D.A.O. Edward, R. Joliet (Rapporteur), G.C. Rodríguez Iglesias and F. Grévisse, Judges,

Advocate General: C. Gulmann,

Registrar: L. Hewlett, Administrator,

after considering the written observations submitted on behalf of:

- Terni SpA and Italsider SpA, by Nico Schaeffer, of the Luxembourg Bar, and Filippo Lubrano and Giuliano Lemme, of the Rome Bar,

- the Italian Government, by Professor Luigi Ferrari Bravo, Head of the Department for Contentious Diplomatic Affairs at the Ministry of Foreign Affairs, acting as Agent, assisted by Ivo M. Braguglia, Avvocato dello Stato,

- the Commission of the European Communities, by Lucio Gussetti and Vittorio Di Bucci, members of its Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Terni SpA and Italsider SpA, the Italian Government and the Commission at the hearing on 27 May 1993,

after hearing the Opinion of the Advocate General at the sitting on 15 July 1993,

gives the following

Judgment

Grounds

1 By a decision of 6 February 1992, which was received at the Court Registry on 27 March 1992, the Consiglio di Stato referred questions to the Court pursuant to Article 41 of the ECSC Treaty on the interpretation and validity of Commission Decision No 83/396/ECSC of 29 June 1983 concerning the aids that the Italian Government proposes to grant to certain steel undertakings (Official Journal 1983 L 227, p. 24).

2 The questions arose in the course of actions for annulment brought by the Italian companies Terni SpA and Italsider SpA against the decisions by which the Cassa Conguaglio per il Settore Elettrico (Compensation Fund for the Electricity Sector) refused to allow them State aid, on the basis of the above-mentioned Commission decision.

3 Article 1 of Decree-law No 495 of 4 September 1981 on urgent measures to assist the steel industry and on pollution abatement plants (GURI No 244 of 5.9.1981, hereinafter referred to as the "Decree-law"), as amended by Conversion Law No 617 of 4 November 1981 (GURI No 303 of 4.11.1981), introduced an aid to assist electric steel-makers in the form of a reduction in the price of electricity. The aid consisted in the reimbursement by the Italian State of increases in the "sovrapprezzo termico", a surcharge on the price of electricity introduced to encourage energy savings, the amount of which was revised periodically by the Interministerial Price Committee.

4 Pursuant to Article 1 of a Ministerial Decree of 26 January 1982 (GURI No 71 of 13.3.1982, hereinafter referred to as "the Ministerial Decree"), the recipients of the aid were to be "electric steel-makers (...) in whose plants the energy consumed annually (...) by electric arc furnaces for steel production is equal to or over 50% of the total electricity consumed by those plants".

5 In accordance with the provisions of Decision No 2320/81/ECSC of 7 August 1981 establishing Community rules for aids to the steel industry (Official Journal 1981 L 228, p. 14), the Italian Government notified the Commission of the aid provided for in the Decree-law.

6 By letters of 1 October, 20 November and 3 December 1981 and 30 September 1982 it also gave notification of other aid planned exclusively to assist two members of the public group Istituto per la Ricostruzione Industriale (Institute for Industrial Reconstruction), namely the Finsider Group, to which Terni and Italsider belonged, and Sisma.

7 After it had obtained the Italian Government' s observations and the latter had altered certain aid, on 29 June 1983 the Commission authorized the various aid designed to assist the Finsider Group, Sisma and other steel producers in a single decision, Decision No 83/396.

8 Article 1 of that decision provides:

"The following aids which the Italian Government plans to grant to the Finsider Group, Sisma and steel producers over 50% of whose annual consumption of electricity is accounted for by the use of electric arc furnaces are compatible with the orderly functioning of the common market to the extent that the conditions and requirements set out in Article 2 to 5 are satisfied:

(1) Aids to Finsider:

- investment aid:

...

- aid for continued operation:

- interest subsidies and State guarantee on a LIT 2 000 000 million loan to Finsider from IRI,

- coverage of losses of plants formerly belonging to the EGAM group: LIT 494 400 million,

- coverage of so-called "indirect" or "non-inherent" charges: LIT 313 000 million;

- Aid for research and development up to LIT 57 000 million.

- endowment of a fund from which IRI can carry out a recapitalization of Finsider: LIT 5 937 900 million.

(2) Aids to Sisma: endowment of a fund from which IRI can carry out a recapitalization: LIT 49 007 million.

(3) Aids to private steel producers:

- defrayal by the exchequer of increases in the electricity surcharge (sovrapprezzo termico) decided by the Interministerial Price Committee between 31 March 1981 and 31 December 1982,

- ..."

9 On the basis of that Commission decision, the Cassa Conguaglio per il Settore Elettrico, the body responsible, under the national legislation, for refunding increases in the electricity surcharge, decided on 21 March 1984 that it would no longer reimburse Terni and Italsider. It also decided to recover the sums which had already been reimbursed to those two companies pursuant to the Decree-law and the Ministerial Decree, amounting to LIT 82 814 829 and LIT 293 833 262 respectively. According to the Cassa Conguaglio per il Settore Elettrico, the Commission had allowed that type of aid solely to assist private producers, and Terni and Italsider were not private producers because of the shares held by public authorities in their capital.

10 The Tribunale Amministrativo Regionale del Lazio dismissed the actions brought by Terni and Italsider for the annulment of the decisions of the Cassa Conguaglio per il Settore Elettrico and the companies appealed to the Consiglio di Stato. That court considered that the cases turned on the scope of the Commission' s decision and asked the Court to rule on the following questions:

"Did Commission Decision No 83/396, in authorizing the aids provided for by the domestic provisions under review and in determining the limits thereof, treat the appellant undertakings as private or public producers, in the light of their internal legal rules or the public holding in their capital and, thus, was authority granted in their case for the exchequer to defray the increases in the electricity surcharge?"

and

"Were those companies, being regarded by the said decision as public producers but not taking any share of the various aids authorized for Finsider and Sisma, exposed to unequal treatment by comparison with private producers regarding the defrayal by the exchequer of the increases in the electricity surcharge?"

Eligibility for the aid

11 In its first question, the national court is asking essentially whether the Commission decision authorizes the granting to Terni and Italsider of the aid consisting in reimbursement of increases in the electricity surcharge.

12 It should be noted that Article 1 of the Commission decision makes a distinction, amongst those eligible for aid, between the Finsider Group, Sisma and private producers; for each recipient or group of recipients, it lists the aid authorized and expressly authorizes the reimbursement of increases in the electricity surcharge only to private producers.

13 It is apparent from the tenth recital in the decision that the Commission regarded the aid consisting in the reimbursement of increases in the electricity surcharge which had been submitted for its consideration as concerning the private sector exclusively.

14 Since Terni and Italsider belonged to the public group Finsider when the Commission decision was adopted, it did not therefore authorize the grant to those companies of aid consisting in the reimbursement of increases in the electricity surcharge.

15 The reply to the first question must therefore be that Article 1 of Commission Decision No 83/396 of 29 June 1983 concerning the aids that the Italian Government proposes to grant to certain steel undertakings does not authorize the grant of aid consisting in the reimbursement in the increases in the electricity surcharge to Terni and Italsider.

Validity of the decision

16 In its second question the national court asks essentially whether, assuming that Terni and Italsider were not entitled to the aid consisting in the reimbursement of increases in the electricity surcharge, the Commission' s decision is invalid on the ground that it involved an unjustified disparity in the treatment of private steel producers and steel producers belonging to public groups.

17 First it must be pointed out that, although Decision No 83/396 does not authorize the grant to Terni and Italsider of aid consisting in the reimbursement of increases in the electricity surcharge, the aid for investment and continued operation which it also authorizes were specified by the Italian legislation as intended for the Finsider group alone and it appears from the replies of the Italian Government, the Commission, Terni and Italsider to the questions put by the Court that the two companies did in fact receive that aid.

18 Secondly, it is clear from the recitals in Decision No 83/396 that the Commission evaluated the aid intended for the Finsider Group, Sisma and private producers on the basis of the capacity reductions to which each recipient or category of recipients had agreed.

19 In the circumstances, the validity of the decision cannot reasonably be contested on the ground that the Commission infringed Article 4(b) of the ECSC Treaty, which prohibits measures or practices which discriminate between producers, by not authorizing the grant to Terni and Italsider of aid consisting in the reimbursement of increases in the electricity price.

20 The reply to the second question must be that its consideration has disclosed no factor of such a kind as to affect the validity of Commission Decision No 83/396.

Decision on costs

Costs

21 The costs incurred by the Italian Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,

THE COURT (Fifth Chamber),

in answer to the questions referred to it by the Consiglio di Stato by decision of 6 February 1992, hereby rules:

1. Article 1 of Commission Decision No 83/396/EEC of 29 June 1983 concerning the aids that the Italian Government proposes to grant to certain steel undertakings does not authorize the grant of aid consisting in the reimbursement of increases in the electricity surcharge to Terni and Italsider.

2. Consideration of the second question has disclosed no factor of such a kind as to affect the validity of Commission Decision No 83/396/ECSC.