WRITTEN QUESTION E-1648/97 by Leoluca Orlando (V) to the Commission (14 May 1997)

Subject: Assumed conflict between Sicilian regional law 1/9/93 and Articles 92 and 93 of the Treaty of Rome

Regional law 1/9/93 of the Sicilian Regional Assembly amended the rules on incentives for charter and IT (inclusive tour) flights to Sicily already operating under regional law 12.4.1967, No 46. Those eligible for the financial aid thus provided by the regional administration are indiscriminately tour operators and travel agencies (Sicilian, Italian, European and non-European) that intend to arrange tourist travel to Sicily.

As the aid is granted not to the operators but to the consumers through the operators concerned and the rules apply absolutely indiscriminately between Sicilian and non-Sicilian tour operators and travel agencies who intend to make use of it, I do not consider there to be any distortion of competition within the meaning of Articles 92 and 93 of the Treaty of Rome. The aid in question does not constitute a reduction of costs for tour operators and travel agents but takes the form of price reductions for tour packages to Sicily for the exclusive benefit of tourists.

Why therefore has the Commission initiated infringement proceedings under Article 93 of the Treaty of Rome without taking account of the justification sent to Commission DG IV by the regional administration on 22 March (ref. No 2756) which had been agreed on by officials of DG IV (Director A. Peterson) and a delegation from the regional administration?

Answer given by Mr Van Miert on behalf of the Commission (13 June 1997)

The Commission has found that grants amounting to 20% of the transport costs which are paid to tour operators and travel agents for the transport of tourists to Sicily have as their object and effect to increase the number of tourists staying there. This involves a deflection of flows of Community tourists to the region.

Although travel agents and tour operators are required to transfer those benefits to tourists, the grants confer advantages on those operators and on the Sicilian tourist industry in general since there is an increase in the numbers of tourists transported to and staying in Sicily.

Since the grants are not conditional on an investment, they constitute an operating aid. In view of its particularly adverse effects on competition, such aid can only be authorized as an exception, when it is for a limited time and degressive. Since the aid is not subject to those restrictions, the Commission considers it doubtful whether it is compatible with the common market and has therefore decided to initiate the adversary proceedings provided for in Article 93(2) of the EC Treaty. It has nevertheless given the Italian Government and other interested parties the opportunity to submit their observations.

Regarding the note justifying the aid sent by the regional authorities on 22 March 1997, which in any event arrived after the Commission's decision was adopted on 12 March, that note does not contain any information in addition to that contained in the observations already submitted by the authorities and taken into account by the Commission in reaching its decision.