1999/678/EC: Commission Decision of 3 March 1999 concerning aid granted by Italy to firms affected by the bankruptcy of Sirap SpA (notified under document number C(1999) 584) (Text with EEA relevance) (Only the Italian text is authentic)
Date: 1999-03-03
Institutions: European Commission
Subjects: Italy, State aid, aid to undertakings, bankruptcy, guarantee, interest rate subsidy

19. 10. 1999

EN

Official Journal of the European Communities

L 269/29

COMMISSION

COMMISSION DECISION

of 3 March 1999

concerning aid granted by Italy to firms affected by the bankruptcy of Sirap SpA

(notified under document number C(1999) 584)

(Only the Italian text is authentic)

(Text with EEA relevance)

(1999/678/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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

failing a reply from the Italian authorities within ten working
days, the aid would be removed from the register of notified
aid and entered in the register of unnotified aid in view of the
fact that draft Law No 835 of the Region of Sicily provided for
a first aid tranche for 1995. As no reply was received, the aid
was entered in the register of unnotified aid under NN 196/95.

Having regard to the Agreement on the European Economic
Area, and in particular Article 62(2)(a) thereof,

By letters dated 15 May and 3 June 1996, the Italian authorities
indicated that the draft Law had been enacted on 24 March
1996 and provided some of the information requested.

Having,
given interested parties notice to submit their comments,

in accordance with the abovementioned provisions,

Whereas:

I

By letter dated 9 March 1995, the Italian authorities, in accord-
ance with Article 93(3) of the EC Treaty, notified measures to
assist firms affected by the winding-up of Sirap SpA, a publicly-
owned company responsible for the economic development of
the Region.

incomplete inasmuch as

The notification was
the Italian
authorities announced that the list describing the aid measures
planned for the firms would be communicated to the Commis-
sion as soon as possible. When it acknowledged receipt of the
letter, the Commission informed the Italian authorities that the
two-month period within which it had to reach a decision on
the aid would start to run when the promised information was
received.

By decision of 3 July 1996, the Commission initiated Article
93(2) proceedings in respect of the aid. The Italian authorities
were informed of the commencement decision by letter dated
17 July 1996. Following publication of the letter in the Official
Journal of the European Communities (1), comments were received
from a third party, a lawyer representing one of the share-
holders of Sirap SpA. The comments were forwarded to the
Italian authorities on 14 March 1997. Despite several re-
minders,
the Italian authorities gave the Commission their
views on the comments only on 5 May and 22 September
1997.

Finally, on 8 October 1997, the Italian authorities notified a
new aid scheme to the Commission relating to the regeneration
and setting-up of craft centres, which were to have been carried
out by Sirap SpA. The scheme is being examined separately by
the Commission. As the new measure also provides for finan-
cial assistance for companies and/or persons having carried out
work on behalf of Sirap SpA, the Commission questioned the
Italian authorities about
the connection between the new
measure and the measures concerned by these proceedings.
The reply from the Italian authorities was received on 15
January 1998.

II

Despite several reminders, the Italian authorities did not supply
the information requested. The most recent reminder was sent
on 20 November 1995, when the Commission stated that,

The reasons why the Commission initiated the proceedings
may be summarised as follows.

(1) OJ C 359, 28.11.1996, p. 3.

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The scheme allows suppliers and creditors of Sirap SpA or
firms having carried out work on its behalf to apply to credit
institutions for loans of up to ITL 700 million, subject to a
ceiling which must not exceed their claims on Sirap SpA.

The loans are granted over a period of five years, with a
one-year grace period. The interest rate is 4 %, the difference as
compared with the reference rate applied in the relevant market
sector being covered by the Region. The loans are guaranteed
by the transfer to the banks of any claims the firms may have
against Sirap SpA and by an additional guarantee from the
Region.

The guarantee from the Region should be regarded as aid to
the firms as they would probably not have obtained the loans
without it. Given that Sirap SpA is bankrupt, it is unlikely that
the claims will be met in full and, therefore, recovered by the
banks.

The Commission took the view that the aid element in the
guarantee should therefore be regarded as corresponding to the
amount guaranteed. It was, however, unable to calculate the aid
element in the loans as it did not know the reference rates
applied in the various sectors concerned. However, taking as a
basis the reference rate applied to calculated regional aid, the
Commission estimated an aid intensity of 20 % gross.

The Italian authorities were asked to send further details as it
was not possible, on the basis of the data available, to exempt
the aid measures under Article 92(3) of the Treaty and Article
61(1) of the EEA Agreement.

III

The Italian authorities'
response was simply to send the
Commission a list of the amounts owed to firms that had
carried out work on Sirap SpA's behalf.

The Italian authorities also pointed out that the total amounts
in question considerably exceed the maximum amount
provided for in the regional
law. They also stated that the
regional guarantee is intended for firms with claims on Sirap
SpA and not for Sirap SpA. This fact is sufficient, they claim, to
rebut the Commission's statement that the regional guarantee
has a net grant equivalent equal to the amount of guaranteed
credit granted in connection with the bankruptcy of Sirap SpA.

In their most recent letter, received on 15 January 1998, the
regional authorities explained that the measures in question
constitute direct aid to the creditors of firms that carried out
work on behalf of Sirap SpA. As those firms had been unable
to obtain payment of their claims owing to the bankruptcy of
Sirap SpA, they in turn had been unable to pay their own
creditors.

In view of the delay in the application of the measures in
question, most of the firms that carried out work for Sirap SpA
have filed for bankruptcy on account of insolvency resulting
from the suspension of payments by Sirap SpA. As a result, the
creditors of those firms will have to wait for the liquidation of

their debtors' assets in order to recover the amounts owed to
them.

Lastly, no comments were made by the Italian authorities
concerning the only response received by the Commission
from a third party in this case.

IV

As part of the procedure, the Commission received comments
from the legal representative of Finanziaria Meridionale SpA
(hereinafter referred to as ‘FIME’), one of the shareholders of
Sirap SpA.

holding

FIME wished to draw the Commission's attention to the finan-
cial prejudice it had suffered as a result of a negative decision
taken by the Commission in 1994 concerning various aid
measures promised by the Region of Sicily to a number of
regional
ref.
SG(94)D/4720). One of the measures which the Commission
declared incompatible with the Treaty was aid of ITL 4 billion
to Ente Siciliano per la Promozione Industriale SpA (hereinafter
‘ESPI’) intended to cover the losses of its subsidiary Sirap SpA.
The Commission accordingly prohibited the Italian Govern-
ment from granting the aid.

(aid No C 12/92,

companies

FIME considers that the Commission based its decision on the
wrong assumptions and without seeking clarification from the
Region. It alleges that the Commission wrongly believed that
Sirap SpA was engaged in the engineering industry, whereas
FIME regards it as a firm aiming to achieve ‘the industrial
development of the territory of Sicily through the creation and
development of enterprises’.

More specifically, Sirap SpA's activities were limited to plan-
ning, carrying out and managing the creation of the infrastruc-
ture and other facilities which would encourage productive
for
investments.
the
production, organisation and management of
small and
medium-sized firms.

It also provided specialised services

Sirap SpA was set up with capital subscribed equally by FIME
and ESPI. The capital was fully guaranteed by the Region,
which undertook to cover the expenditure incurred by the firm
in the course of its activities.

FIME considers that, although Sirap SpA was technically a
public limited company, it did not constitute a normal business
structure since it acted on behalf of the Region.

The decision of the Sicilian Regional Government in 1991 and
1992 no longer to cover the entire capital, and the negative
Commission decision of 1994 resulted, it is claimed, in the
demise of Sirap SpA. As a result, FIME's shareholding no longer
has any financial value. FIME therefore asks the Commission to
review where possible its position on the matter or, alter-
natively, to take steps to allow the Region to fulfil its obliga-
tions for 1991 and 1992 to guarantee the entire capital of
Sirap SpA.

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V

include professional firms, architects and engineers to design
and oversee the work.

The notified measures constitute aid to the suppliers and cred-
itors of Sirap SpA or firms which carried out work on its
behalf since they attempt to limit the damage caused by the
bankruptcy of Sirap SpA to such persons and/or firms.
In
practice,
they constitute a temporary measure aimed at
preventing recipients from having to suspend payments owing
to the delay or the impossibility of recovering the sums owed
by Sirap SpA or by the firms that carried out work on its
behalf.

The aid in question is therefore aimed at cushioning the
normal impact of the liquidation of Sirap SpA, where creditors
and suppliers would await the final winding-up in order to
recover all or part of their claims. Pending the outcome, those
firms are unable in their turn to pay their creditors, and this is
liable to trigger a chain of bankruptcies. According to the
Italian authorities, because of the delay in applying the meas-
ures, most of the firms that worked on behalf of Sirap SpA are
themselves being wound up, having become insolvent as a
result of the suspension of payments by Sirap SpA.

On the basis of the information received, it must be concluded
that the measures constitute operating aid aimed at ensuring
the survival of the recipient firms by enabling them to bear the
financial charges resulting from their normal business activities.
Furthermore, the Italian authorities have never claimed that the
investment aid or
measure in question constitutes regional
rescue or restructuring aid for firms in difficulty.

It is worth noting in this respect that, although a number of aid
recipients have in turn filed for bankruptcy, the Italian author-
ities have not at any stage in these proceedings invoked the
application of the Community Guidelines on State aid for
rescuing and restructuring firms in difficulty (1). Furthermore,
they have not provided any information indicating compliance
with the Guidelines, for example by submitting restructuring
plans aimed at restoring the long-term viability of the recipient
firms.

The direct recipients of the aid are engaged in a wide range of
activities, as evidenced by the measure forming the subject of
these proceedings, the interest subsidy being granted on the
basis of the reference rates applied in the different sectors of
the economy. The Commission has no information on the
specific sector of each recipient. However, it concludes from
the information submitted by the Italian authorities that, as
Sirap SpA's creditors are firms which carried out work on its
behalf, they are firms in the building and public works sector.

In addition, according to information received by the Commis-
sion in connection with State aid No N 693/97 concerning the
redevelopment of areas equipped for craft activities which was
to have been carried out by Sirap SpA, the latter's creditors

The aid to Sirap SpA's creditors is therefore sectoral, as it is
limited to one or more sectors. However, no information is
available on the suppliers and creditors of firms which carried
out work on behalf of Sirap SpA.

VI

State aid must be examined to determine whether it affects
intra-Community trade or distorts or
threatens to distort
competition.

According to the Panorama of EU Industry for 1997 (2),
building is inherently a local or regional activity, with most
firms not usually moving far from their local area. Con-
sequently,
in
exports of goods as such, but rather take the form of exports of
capital or services through international mergers, acquisitions
and joint ventures.

transnational activities do not usually result

Nonetheless, whereas small firms tend not to move far from
their region of origin,

larger ones do so.

In the present case, distance does not appear to have acted as
an inhibiting factor. The local nature of the activity is thus
somewhat mitigated by the fact that the firms which carried
out work for Sirap SpA include Italian firms located some
distance from Sicily, notably Bologna and Udine. They took
part in the work through consortia which also included firms
located in Sicily. According to those firms, the value of such
work was the fact that it was supported and funded by the
State, as well as the absence of any risk to the solvency of
Sirap SpA.

The fact that several recipient firms came from a long way
away because of the absence of risk does not rule out the
possibility that foreign firms might have been interested in
taking part in the work and that there was trade between the
Member States on the market in question. The Italian author-
ities have not, indeed, provided any evidence that no such trade
took place.

As regards the planning of the work, the Panorama of EU
Industry for 1997 points out that, whilst the architectural
profession does not as yet have a sufficient number of
economic observations to allow a satisfactory assessment of the
wide and varied range of its numerous activities, architects do
supply services
in other Member States. Furthermore, as
regards ‘engineering’ services in the Community, the Panorama
states that, with the exception of Italy and the United Kingdom,
which both have higher percentages, an average of 25 % of
annual
is derived from contracts
performed in other countries.

in that sector

turnover

(1) OJ C 368, 23.12.1994, p. 12.

(2) Published by the Office for Official Publications of

the European

Communities.

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19. 10. 1999

It cannot therefore be concluded (nor have the Italian author-
ities, during the proceedings, made any claim to the contrary)
that aid to such recipients does not distort trade between
Member States.

The aid in question cannot be regarded as investment aid, as it
is not intended to promote productive investment. It must
therefore be regarded as operating aid.

The measure in question allows the recipients partially to avoid
the consequences of the bankruptcy of the promoter. The firms
are thus artificially placed in a more favourable position than
similar firms in Italy and other Member States that are unable
to rely on State aid in similar circumstances. It must therefore
be concluded that
the aid distorts or is liable to distort
competition.

Accordingly, as the measure satisfies the tests of Article 92(1)
of the Treaty, it constitutes State aid within the meaning of that
Article. The next step is to determine whether the aid is lawful
and compatible with the Treaty.

In its communication on the method for the application of
Article 92(3)(a) and (c) to regional aid (1), the Commission
provided for the possibility of operating aid being granted
under certain conditions, namely:

1. The aid is limited in time and designed to overcome the
structural handicaps of enterprises located in Article 92(3)(a)
regions.

2. The aid is designed to promote a durable and balanced
development of economic activity and does not give rise to
a sectoral overcapacity at the Community level such that the
resulting Community sectoral problem produced is more
serious than the original regional problem.

VII

3. Such aid must not be granted in violation of the specific

rules on aid granted to companies in difficulty.

As to whether the aid is lawful, it is necessary to consider the
timing of the various legislative documents. The Italian author-
ities informed the Commission that the notified draft Law had
been approved by the Region of Sicily on 24 March 1996 but
had been the subject of a legal action brought by the Commis-
sario dello Stato (Government representative). The Law was
adopted on 22 March 1997 (Law No 8/97) and published in
the Official Journal of the Region of Sicily of 29 March 1997.
The difference between the second version of the Law and the
first
the articles concerning the
employment by the Region of Italter staff — a matter not
covered by these proceedings (in the second version, the article
in question was removed by Order No 60 of the Constitutional
Court, sitting on 26 February to 4 March 1997).

is the removal of one of

For the reasons given above,
the Commission entered the
notified aid in the register of unnotified aid. Although the
Italian authorities subsequently informed the Commission that
the law had been approved and adopted one year later, they
did not challenge the classification of the measure as unnotified
aid.

Furthermore, although they were specifically requested to do so
when these proceedings were initiated, the Italian authorities
did not confirm that the implementation of the measures had
been suspended pending the outcome of the Commission's
assessment. The most that can be concluded from the recent
correspondence concerning aid N 693/97 is that the delay in
implementing Regional Law No 8/97 frustrated the intentions
of the legislator.

This, however, is not enough to rule out completely the poss-
ibility that the measures concerned by these proceedings were
implemented before the Commission took a decision and that
they are, therefore,

illegal.

VIII

With regard to the compatibility of the aid, it should be noted
that the whole of Sicily is eligible for aid to promote regional
development under Article 92(3)(a) of the Treaty.

4. An annual report on the application of the aid must be sent
to the Commission, indicating total expenditure by type of
aid and the sectors concerned.

5. Aid designed to promote exports to other Member States

must be excluded.

As regards the first condition, it is worth noting that, although
the aid is limited in time, it is not intended to overcome the
structural handicaps of enterprises located in Sicily. First, at
least two of the firms having participated in the temporary
associations of undertakings responsible for the work are
located outside the region. To grant aid to such enterprises
would be tantamount to removing the distinction between
assisted and non-assisted areas as regards regional develop-
ment.

Furthermore, the aid is not intended to overcome the structural
handicaps of the economic situation in Sicily, since it is aimed
at helping the victims of the bankruptcy to stay afloat until the
liquidation procedure has been completed. Such situations can
occur throughout the Community, and no evidence has been
adduced by the Italian authorities to show that the structural
situation is worse because it is in Sicily.

As for the second condition, neither the object nor the effect of
the aid can be regarded as promoting a durable and balanced
development of economic activity. The aid is not intended to
assist marketing or to cover the extra transport or commun-
ication costs which might be justified by the physical distance
preventing firms from participating in the Community internal
market.

As regards the third condition, it is unlikely that the suppliers
and creditors of Sirap SpA or of firms carrying out work on its
behalf could, when Sirap SpA went into liquidation, have been
regarded as ‘firms in difficulty’. It is, however, clear that the
especially
aid was

intended to prevent

recipients,

the

(1) OJ C 212, 12.8.1988, p. 2.

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the firms carrying out work on behalf of Sirap SpA, from
having to suspend payments. This is confirmed by the Italian
authorities, which acknowledged that, because of delays in
granting the aid, most of the firms which had carried out work
for Sirap SpA filed for bankruptcy owing to the latter's
cessation of payments.

The aid is thus tantamount to rescue or restructuring aid for
firms in difficulty. However, as was stated above, the Italian
authorities have not invoked the application of the Community
Guidelines on State aid for rescuing and restructuring firms in
difficulty.

Yet, even had they done so, the aid does not qualify as a rescue
measure since the loans were not granted at market rates, the
Region having borne part of the interest, and were granted for
more than the six months which the Commission regards as
the period normally necessary for them to be defined as a
recovery measure. Similarly, the aid does not qualify as restruc-
turing aid since, among other things, the Commission did not
receive any restructuring plan guaranteeing the long-term
viability of the firm.

Although the last two conditions do not appear to be applic-
able in the present case, the failure to comply with the other
conditions is already sufficient to rule out the possibility of
exemption under Article 92(3)(a).

Exemption under Article 92(3)(b) is not possible as the aid is
not intended to promote the execution of an important project
of common European interest or to remedy a serious disturb-
ance in the Italian economy.

The exemption provided for in Article 92(3)(c) is not applicable
either because, in the context of that provision, the Commis-
sion does not authorise operating aid.

Lastly, the exemption provided for in Article 92(3)(d) is not
applicable as the aid is not intended to promote culture and
heritage conservation.

IX

In its letter initiating the proceedings, the Commission stated
that, without the guarantee provided by the Region of Sicily,
the recipients would probably not have obtained a bank loan.
The only security the firms were required to provide to the
banks issuing the loans were their claims on Sirap SpA, which
was already bankrupt and in the process of being wound up. It
therefore follows that Sirap SpA's creditors had very little
chance of recovering a significant part of the claims in ques-
tion. The Commission accordingly took the view that the aid
element in the guarantee should be regarded as corresponding
to the amount guaranteed.

State aid is to ward off the normal effects of the liquidation of
Sirap SpA by preventing a chain reaction of bankruptcies
among its creditors owing to their failure to pay their own
creditors.

In order to secure a loan from a bank, Sirap SpA's creditors are
required to transfer their claims to that bank as a primary
guarantee. Given that Sirap SpA is in liquidation, it is doubtful
whether the claims have any significant value. According to
information received as part of the proceedings, Sirap SpA
simply acted as intermediary in the execution of development
projects for the Region. It is therefore doubtful that the firm
possessed any solid assets which could be sold in order to pay
creditors. Even if this were to be the case, which is unlikely in
view of Sirap SpA's activities, the Italian authorities have not
invoked this as an argument. This is why the Region provides
an additional guarantee.

It is, of course, possible that recipient firms in sound financial
health could have obtained a loan on the capital market in the
normal way. However, the Italian authorities have not provided
any evidence that Sirap SpA's creditors could have obtained
financing solely on the basis of the primary guarantee or their
own financial position,
i.e. without the additional guarantee
provided by the Region.

It would seem, in fact, according to statements by the legal
representatives of FIME which have not been denied by the
Italian authorities, that the solvency of Sirap SpA was closely
tied to capital injected by the Region in order to maintain the
capital
the latter's difficulties
began when the Region refused to contribute capital in 1991
and 1992, leading to the suspension of payments by Sirap SpA
to the firms and the cessation of work.

integrity of

the firm.

Indeed,

Furthermore, FIME claims that
its holding in Sirap SpA,
formerly worth ITL 2 billion, should now be regarded as
worthless.

In view of the foregoing, it must be concluded that the Italian
authorities have not furnished any evidence that the claims on
Sirap SpA, which were transferred as security in exchange for
loans, had any significant financial value. As a result, apart
from the healthy firms which could have obtained a loan on
the market under normal conditions (the Italian authorities
have not provided any evidence that such a situation consti-
tutes the rule), the Commission has no option but to maintain
its position, namely that the aid element in the guarantee must
be regarded as equal to the amount guaranteed.

X

The Italian authorities' rejection of
is not
supported by any evidence allowing the Commission to reverse
its assessment. As already stated above, the purpose of the

that assessment

As was stated above, in the course of these proceedings the
Commission received comments from a former Sirap SpA
shareholder. The comments call for the following observations:

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Official Journal of the European Communities

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1. The information on the characteristics and activities of Sirap
SpA was communicated to the Commission by the Italian
authorities under proceedings initiated in respect of various
aid measures promised by the Region of Sicily to several
regional holding companies (aid C 12/92). In their letter of
21 July 1992, the authorities stated that Sirap SpA was a
company established under Article 53 of Regional Law No
105 of 5 August 1982 in order to provide technical design
services for public works and/or services on behalf of public
bodies (regions, municipalities, etc.) and, accordingly, was
not involved in products that could be assessed on the
market.

In its final decision on the case (ref. SG 94 D/4720), the
Commission took the view that, according to the descrip-
tion of its activities provided by the Italian authorities, Sirap
SpA operated in the engineering sector. This is also in line
with the definition of engineering given in the Panorama of
EU Industry for 1997,
intellectual services aimed at
optimising investment projects in industry, construction and
infrastructure as well as at all the stages of a project, from
its initial conception to its completion.

i.e.

The Commission had concluded that the amount of aid was
such that, in view of the generally small size of engineering
firms, it could prevent private-sector competitors of Sirap
SpA from gaining access to the market or force them out of
the market, both in Italy and in other Member States, as
they would not benefit from State aid to cover any losses.

2. The comments made by the legal representatives of FIME to
the Commission as part of the proceedings confirm that at
least some of Sirap SpA's activities comprised the activities
described above, as defined by the Commission in its 1994
decision.

3. It should be noted that neither Sirap SpA, nor its share-
holders or their legal representatives nor the Italian author-
ities challenged the Commission decision of 1994 within
the specified period. The decision is therefore final.

4. With regard to the preceding point, the Commission notes
the Italian authorities have not responded to the
that
comments received as part of
the proceedings, despite
having been invited to do so. This constitutes further con-
firmation of the statements in the preceding point.

XI

1210) and adopted as Regional Law No 8 of 22 March 1997
and which take the form of guarantees and interest subsidies,
constitute aid within the meaning of Article 92(1) of
the
Treaty.

As the budgetary resources were approved for five years from
1996, the aid is unlawful as regards the portion not covered by
the rules in the Commission notice on de minimis aid (1), which
sets a threshold of EUR 100 000 over three years, given that
the Italian authorities have not confirmed that the measures
were not implemented before the Commission took a decision.

The aid not covered by the de minimis rule is also incompatible
with the common market, as it is not covered by the exemp-
tions provided for in the Treaty for the reasons already given
(see Section VIII).

Where aid is incompatible with the common market,
the
Commission is required, pursuant to Article 93(2) of the EC
Treaty and the case-law of the Court of Justice, in particular its
judgments in Cases 70/72 (2), 310/85 (3) and C 5/89 (4), to ask
the Member State to recover the illegal aid from the recipients.
Consequently, with regard to the portion not covered by the de
minimis rule, the aid must be abolished and, in so far as it has
already been granted, recovered by the Italian authorities.

to the full

loan guaranteed, whilst

This case concerns a guarantee where the aid element can
amount
the loan itself
comprises an aid element in the form of an interest subsidy
with an estimated intensity of 20 %, as was stated when they
were initiated. As
the Italian authorities have not com-
municated the sectoral interest rates applied to calculate the
interest subsidies, the Commission is unable to determine the
extent to which the rates correspond to those applied to calcu-
late regional aid.

Where the financial position of the aid recipients would have
enabled them to obtain the financing in question on the capital
market, without the State guarantee, the aid element consists
solely in the interest subsidy. Otherwise, the aid consists in the
amount of the guaranteed loan and the interest subsidy.

Accordingly, in order to comply with the ceiling provided for
in the de minimis notice, the guarantee may cover only a
maximum amount of EUR 83 333, by adding the aid element
contained in the interest subsidy, a total of EUR 100 000 over
a three-year period is obtained,

HAS ADOPTED THIS DECISION:

Article 1

The measures to assist firms affected by the bankruptcy of
Sirap SpA, which are provided for in the law of the Region of
Sicily approved on 24 March 1996 and subsequently adopted
as Regional Law No 8 of 22 March 1997 and which take the
form of guarantees and interest subsidies, constitute aid within
the meaning of Article 92(1) of the Treaty.

In view of the foregoing, the measures to assist the firms
affected by the liquidation of Sirap SpA, which are provided for
in the regional law approved on 24 March 1996 (DDL 1182-

(1) OJ C 68, 6.3.1996, p. 9.
(2) [1973] ECR 813.
(3) [1987] ECR 901.
(4) [1990] ECR I-3437.

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L 269/35

the ceiling of
that aid which exceeds
The portion of
EUR 100 000 over three years provided for in the de minimis
notice is illegal inasmuch as it was granted before a decision
was taken by the Commission under Article 93(3) of
the
Treaty.

Article 2

The aid not covered by the de minimis rule referred to in Article
1 is also incompatible with the common market as it does not
qualify for exemption under Article 92(2) and (3) of the Treaty.

Article 3

Italy shall abolish the part of the aid scheme in question that is
not covered by the de minimis rule and shall take the necessary
steps to recover the aid granted illegally and described in
Article 1 of this Decision.

Where the financial position of a firm receiving aid referred to
in Article 1 of this Decision would have afforded it normal
access to the capital market without
the State guarantee,
recovery shall apply only to the interest subsidy.

Where a recipient would not have been able to obtain the loan
in question without the State guarantee, the full amount of aid
shall be recovered.

Article 4

The aid shall be recovered in accordance with the procedures
and provisions of Italian law, together with interest starting to
run from the date on which the aid was granted to the date on
which it was repaid. The rate shall be the reference rate,
applicable on the date the aid was granted, used to calculate the
net grant equivalent of regional aid in Italy.

Article 5

The Italian Government shall inform the Commission, within
two months of the date of notification of this Decision, of the
measures taken to comply herewith.

Article 6

This Decision is addressed to the Italian Republic.

Done at Brussels, 3 March 1999.

For the Commission

Karel VAN MIERT

Member of the Commission