1999/298/EC: Commission Decision of 10 June 1998 on State aid that the Liguria region (Italy) plans to grant to agricultural cooperatives [notified under document number C(1998) 1714] (Only the Italian text is authentic)
Date: 1998-06-10
Institutions: European Commission
Subjects: Italy, Liguria, State aid, agricultural cooperative, regional aid

L 117/42

EN

Official Journal of the European Communities

5. 5. 1999

COMMISSION

COMMISSION DECISION

of 10 June 1998

on State aid that the Liguria region (Italy) plans to grant to agricultural co-
operatives

(notified under document number C(1998) 1714)

(Only the Italian text is authentic)

(1999/298/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

The Commission has received no comments from the
other Member States or the other parties concerned.

Having regard to the Treaty establishing the European
Community, and in particular the first subparagraph of
Article 93(2) thereof,

Having, in accordance with the abovementioned Article,
given notice to the parties concerned to submit their
comments (1),

Whereas:

I. BACKGROUND

By letter of 31 July 1997, receipt of which was recorded
on 1 August 1997, the Permanent Representation of Italy
in
to the European Union notified the Commission,
accordance with Article 93(3) of the Treaty, of the aid
measures that the Liguria Region plans to grant to agri-
cultural cooperatives by draft Law No 85 of 9 May 1997
(hereinafter referred to as ‘the draft Law'). By letter of 23
October 1997, recorded on 27 October 1997, the Perma-
nent Representation of Italy sent the Commission the
additional information requested.

By letter of 12 January 1998, the Commission informed
Italy of its decision to initiate the procedure provided for
in Article 93(2) of the Treaty in respect of those aid
measures.

The Commission’s decision to initiate the procedure was
published in the Official Journal of
the European
Communities (2); the Commission has called on the other
Member States and the other parties concerned to submit
their comments on the matter.

II. DESCRIPTION OF THE MEASURES

The draft Law relates to structural measures for agricul-
tural cooperatives. It provides for capital grants of up to
55 % of the total permissible expenditure on investments
in the following:

(cid:190) the

construction,

restructuring,

and
purchase of
storage,
for
processing and marketing of agricultural products and
the purchase of plant and equipment,

the collection,

extension

facilities

(cid:190) the construction of marketing centres,

(cid:190) the purchase of the land required to establish the

abovementioned facilities.

aid in connection with investments

The investments must comply with the ‘Guidelines for
State
in the
processing and marketing of agricultural products' (3)
(hereinafter referred to as ‘the Community guidelines')
and with the limits laid down for specific sectors in
Commission Decision 94/173/EC (4).

The overall budget for the measures amounted to ITL 300
million for 1997. For the following years, the budget is to
be determined later. By way of a transitional measure,
Article 6 of the draft Law extends the benefit of the
measure
implementation was
commenced after 1 January 1996.

projects where

to

The draft Law notified by the Italian authorities falls
within the scope of the Community guidelines. In partic-
ular, certain provisions of the draft Law seek to ensure
compliance with the limits applying to specific sectors.

(1) OJ C 101, 3.4.1998, p. 2.
(2) See footnote 1.

(3) OJ C 29, 2.2.1996, p. 4.
(4) OJ L 79, 23.3.1994, p. 29.

5. 5. 1999

EN

Official Journal of the European Communities

L 117/43

Furthermore, all expenditure permissible under the draft
Law (on land, buildings, plant and equipment) falls within
in point 3(a)(ii) of
the definition of
the
investment
Community guidelines. Lastly,
the rate of aid (55 %)
corresponds to the maximum admissible for investments
in regions (like Liguria) falling outside Objective 1.

Nevertheless, the fact that, under the draft Law, invest-
ment projects whose implementation was commenced
after 1 January 1996 are considered eligible for the aid
means in practice that aid could be granted retroactively
to cooperatives for projects that are being executed or
have even been completed.

As a general principle, the existence of clauses providing
for retroactive application of State aid for productive
investments normally does not foster the development of
the sector or the region concerned. In such cases, the role
of the aid in stimulating investment may be non-existent
since these investment projects have been started without
any supporting law. The Commission usually regards
measures of this type as operating aid. The aid in question
cannot therefore be regarded as contributing to the devel-
opment of the sector and does not qualify under the
derogation provided for in Article 92(3)(c) of the Treaty (1).

In the light of the above, the Commission takes the view
that the aid in question is operating aid, which it has
consistently opposed when applying Articles 92, 93 and
94 of the Treaty in so far as by its very nature such aid
does not contribute to the development of the sector or
the region concerned (2). The planned measures directly
improve the processing and marketing conditions enjoyed
by the beneficiary producers as compared with those of
other Community operators not benefiting from compar-
able aid. As a consequence, the aid measure under exam-
ination appears to fall within the scope of Article 92(1) of
the Treaty but as far as the Commission can tell at
present it does not match any of the exceptions provided
for in paragraphs 2 or 3 of that Article.

The Commission has accordingly decided to initiate the
procedure for in Article 93(2) of the Treaty in respect of
the aid measure notified.

III. OBSERVATIONS OF THE ITALIAN AUTHORITIES

By letter of 10 March 1998, the Permanent Representa-
tion of Italy informed the Commission that the Liguria
region was deleting Article 6 of the draft Law, which

contained the transitional provisions on the granting of
the aid with retroactive effect.

By letter of 15 April 1998, the Italian authorities sent the
Commission a copy of the draft Law adopted by the
the
Liguria Regional Council,
previous version had been deleted.

in which Article 6 of

IV. APPRAISAL OF THE AID MEASURE

At the time the Article 93(2) procedure was initiated, the
Commission took the view that, once Article 6 of the
draft Law was deleted, it complied with the Community
guidelines.

The eligible expenditure does in fact correspond to that
laid down in the Regulations, the limits applicable by
sector are met and the rate of aid does not exceed the
maximums laid down for regions falling outside Objec-
tive 1.

The deletion of Article 6 of the draft Law, which provided
for the aid to apply retroactively before 1 January 1996,
neutralises
to the aid
the Commission’s objections
measure under examination. The aid can therefore qualify
under the derogation provided for in Article 92(3)(c) of
the Treaty,

HAS ADOPTED THIS DECISION:

Article 1

The aid measures provided for in draft Liguria Regional
Law No 85/97 to assist agricultural cooperatives are
compatible with the common market. The aid may
accordingly be granted.

Article 2

This Decision is addressed to the Italian Republic.

Done at Brussels, 10 June 1998.

For the Commission

Franz FISCHLER

Member of the Commission

(1) Judgment of

the Court of Justice in Case 730/79 Philip

Morris v. Commission [1980] ECR, p. 2671.

(2) Judgment of

the Court of First Instance in Case T-459/93

Siemens SA v. Commission [1995] ECR II, p. 1675.