WRITTEN QUESTION E-1506/97 by Gianni Tamino (V) to the Commission (30 April 1997)

Subject: EU contribution for restructuring of the Enichem Manfredonia plant (Italy)

On 21 June 1995 the Commission agreed to grant funding to Italy to implement a detailed plan to restructure the plant operated by Enichem Agricoltura S.p.A. in Manfredonia. with a view to upgrading and converting it to other lines of production, given the crisis in the fertilizer industry. Responding to an explicit call to uphold competition, the Italian Government stated that the Lit 2 818 bn allocated to Enichem had been used to clear and upgrade all the plants concerned and make them safe. Article 1 of the Commission decision lays down the financial aid to Enichem, which, in accordance with paragraph 2 of that article, must undertake to comply fully with the liquidation, restructuring, and privatization plan submitted to the Commission. Paragraph 3 specifies which industrial sites are to be closed, genuinely and irreversibly, in order to reduce productive capacity and to that end scrapped, rendered incapable of producing, or converted to another use. On 25 March 1997 the newspaper Il Sole 24 Ore reported that the Italian Ministry for Industry and the Commission were investigating the possibility of reopening the Manfredonia plant, which is included among the sites to be scrapped, because Probant & Associates had offered to buy it.

Is the above information correct? Is it acceptable for the Italian Ministry to propose that the plant be reopened when the EU has helped to pay for it to be dismantled? Does the Commission not believe, moreover, that, in cooperation with the Italian Government, it should seek to ascertain how far the commitments entered into have been honoured, since the Manfredonia plant is apparently not only not being scrapped, but is not even being upgraded?

Answer given by Mr Van Miert on behalf of the Commission (4 June 1997)

By Decision adopted on 21 June 1995 ((OJ L 28, 6.2.1996. )), the Commission decided that the aid granted by the Italian State to Enichem Agricoltura, namely the capital injections effected in the years 1991 to 1994, totalling LIT 1 918 billion, and the expected final cost of Enichem Agricoltura's liquidation of LIT 900 billion, fulfilled the conditions laid down by the Community guidelines on state aid for rescuing and restructuring firms in difficulty.

In the Decision, the Commission stressed that, in return for the aid granted, the capacity reduction resulting from the plant closures which the Italian authorities had presented as final must be genuine and irreversible. The relevant plants cannot be put back into service, even by their buyers, since this would amount to bringing subsidized capacity back onto the market, which would constitute a serious distortion of competition.

In response to the request by the Italian authorities regarding the possible reopening of the Manfredonia plant following the offer by Probant & Associates to purchase it, the Commission pointed out that, under the Decision of 21 June 1995, the undertaking to close certain plants was regarded as one of the necessary conditions for authorizing the plan for restructuring Enichem Agricoltura.

In addition, as regards compliance with the conditions laid down in the above-mentioned Decision, the Italian authorities cooperate in monitoring compliance with the Decision by providing half-yearly reports indicating in particular the progress of the liquidation, the situation of each individual production plant which has been closed, and the progress of the restructuring and privatization operations. As far as the Manfredonia plant is concerned, the information available to the Commission indicates that the plant is being cleaned up in preparation for dismantlement.

However, so as to check whether its information is correct, the Commission will request clarification on the progress being made in cleaning up the Manfredonia plant.