WRITTEN QUESTION P-3047/02

by Benedetto Della Vedova (NI) to the Commission

(18 October 2002)

Subject: Compatibility of the Italian special wages guarantee fund (CIGS) with Article 87 of the EC Treaty

On 6 June 2002, the author of the present question tabled question P-1680/02, on the compatibility of the Italian special wages guarantee fund (CIGS) with Community law on state aids for companies and employment(1). The Commission's answer, dated 5 July 2002, stated:

- that the CIG (Cassa integrazione guadagni) fulfils the function in Italy of providing a minimum degree of protection for employees in the event of the insolvency of their employer, while also in practice having functions that go beyond that objective; and

- that where such measures in support of employees benefit enterprises selectively, whether through discretionary granting, or by applying only to certain sectors, only in certain geographical regions or only to firms of a certain size, state aid may be involved; and that in such cases, the compatibility of any such aid would need to be assessed against paragraphs 2 and 3 of Article 87 of the EC Treaty.

CIGS support is granted on a discretionary basis, in practice almost exclusively from the funds of the Italian state, and only the employees of certain types of undertaking are eligible.

In the past, the CIGS has frequently been used to benefit employees known to have been made redundant and to have no chance of returning to their original employment. This has happened despite the fact that Law No 223/1991 (Articles 1 and 24) prohibits use of the CIGS for this purpose. Nonetheless, such use of the CIGS appears to be on the cards, according to statements made by Italian government representatives, in the wake of the severe crisis now affecting Fiat.

Does the Commission believe that the CIGS is compatible with Article 87 of the EC Treaty?

(1) OJ C 92 E, 17.4.2003, p. 79.

Answer given by Mr Monti on behalf of the Commission

(26 November 2002)

In almost all the Member States there are national systems, often complex, to deal with the temporary or partial unemployment or the protection of workers in the event of the insolvency of their employer(1).

As the Commission has already indicated in its answer to Written Question P-1680/02 from the Honourable Member(2), it may be the case, under certain circumstances, that measures which were intended at the outset to protect workers in the event of the insolvency of their employer may have the effect of state aid within the meaning of Article 87 of the EC Treaty. This may be the case in several Member States.

It is undeniable, however, that these measures are all, to a certain extent, types of risk pooling and that they form part of the social safety net of each Member State.

The Commission's approach must therefore be to act responsibly towards European citizens while respecting the rules on state aid in particular. It must avoid destabilising systems which guarantee the social protection of workers and, at the same time, ensure fair play between Member States.

The Commission feels that the best and most balanced approach is to tackle the problem as a whole, taking into account both the competition and employment aspects, in close cooperation with the Member States themselves. This approach should allow us to reach a real Community solution in a consistent manner in all of the Member States.

(1) Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer OJ L 283, 28.10.1980.

(2) OJ C 92 E, 17.4.2003, p. 79.