2002/597/EC: Commission Decision of 3 April 2002 concerning the aid provided for by Article 4 of Law No 290 of 17 August 1999 (notified under document number C(2002) 1188) (Only the Italian version is authentic)
Date: 2002-04-03
Institutions: European Commission
Subjects: Italy, State aid, aid system, farmer

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COMMISSION

COMMISSION DECISION

of 3 April 2002

concerning the aid provided for by Article 4 of Law No 290 of 17 August 1999

(notified under document number C(2002) 1188)

(Only the Italian version is authentic)

(2002/597/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community, and in particular the first subparagraph of Article
88(2) thereof,

Having called on interested parties to submit their comments
pursuant
to the aforementioned provisions (1), and having
regard to those comments,

Whereas:

I. PROCEDURE

By letter dated 6 August 1998, registered as received on
12 August 1998, the Italian Permanent Representation
to the European Union notified the Commission,
pursuant to Article 88(3) of the EC Treaty, of a draft law
extending time limits in the agricultural sector. The aid
was registered under number N 490/98.

invited the Italian authorities to confirm press reports
that the draft law had been enacted by the Parliament as
Law No 290 of 17 August 1999, published in the
Official Gazette of the Italian Republic No 195 of 20
August 1999.

(4)

By letter dated 25 October 1999, registered as received
on 5 November 1999, the Italian authorities confirmed
that the draft law had been adopted as Law No 290 of
17 August 1999. The same letter attached the text of the
law as adopted and also supplied some of the informa-
tion sought by the Commission in its letter of 28
January 1999.

(5)

Based on this information, the aid scheme was trans-
ferred onto the register of non-notified aid under
number NN 155/99.

By letters dated 1 October 1998 and 28 January 1999,
the Commission asked the Italian authorities for further
information. By letter dated 30 November 1998, regis-
tered as received on 4 December 1998,
the Italian
authorities replied to the Commission's letter of 1
October 1998.

(6)

Italian authorities

By letter of 13 September 1999, the Commission asked
the
information
requested in its letter of 28 January 1999, which it had
In the same letter the Commission
not yet received.

to provide

the

(1) OJ C 148, 27.5.2000, p. 2.

By letter dated 24 February 2000, SG(2000) D/101808,
the Commission informed Italy of its decision to initiate
the procedure laid down in Article 88(2) EC in respect
of Articles 4 and 5 of Law No 290 of 17 August 1999
as well as of Article 15(16) of Law No 67 of 11 March
1988 (the 1988 Finance Act) and Law No 252 of 8
August 1991, which constituted the legal basis for the
granting of the subsidies cited in Article 5 of Law 290/
99. In the same letter the Commission also informed
Italy that it raised no objections to the other Articles
(Articles 1, 2, 3, 6, 7 and 8) of Law No 290 of 17
August 1999 in that they did not constitute aid within
the meaning of Article 87(1) EC.

(1)

(2)

(3)

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(7)

(8)

(9)

(10)

(11)

By the same letter, the Commission enjoined Italy to
provide, pursuant to Article 10(2) and (3) of Council
Regulation (EC) No 659/1999 (1), within one month of
receipt of that letter, all documents,
information and
data needed for assessment of the compatibility of the
measures in question.

The Commission decision to initiate the procedure was
published in the Official
the European
Communities (2). The Commission invited interested
parties to submit their comments.

Journal

of

By letter dated 23 March 2000, the Italian authorities
asked for a 30-day extension of the deadline set by the
Commission for the submission of
the information
requested in its opening of procedure.

By letter dated 18 May 2000, the Italian authorities
submitted to the Commission their comments with
respect to the opening of the procedure.

(18)

By letter dated 17 July 2000, the Commission asked for
further information with respect to the comments trans-
mitted by the Italian authorities in their letter of 18 May
2000.

(12)

By letter dated 13 October 2000, the Italian authorities
transmitted the information requested by the Commis-
sion in its letter of 17 July 2000.

(13)

By letter dated 13 December 2000, the Commission
information.
asked for additional

does not concern, nor extend its effects to, the very
farming, operating and improvement loans due on 31
March 1998 for which an extension is provided for by
Article 4 of Law No 290 of 17 August 1999. Likewise,
this decision does not concern Article 5 of Law 290/99
nor Article 15(16) of Law No 67 of 11 March 1988 (the
1988 Finance Act) and Law No 252 of 8 August 1991
which constituted the legal basis for the granting of the
subsidies cited in Article 5 of Law 290/99 which will
continue to be assessed within the framework of State
aid No C/7B/2000 and will be dealt with in a separate
decision.

II. DESCRIPTION OF THE AID

Law No 290 of 17 August 1999, published in the
Official Gazette of the Italian Republic No 195 of 20
August 1999, provides for an extension of the time
limits for various operations in the agricultural sector.
The Law comprises eight articles. In its decision of 24
February 2000, the Commission decided not to raise
objections against Articles 1, 2, 3, 6, 7 and 8 of the Law
in that they did not constitute aid within the meaning of
Article 87(1) of the EC Treaty. The decision to initiate
the proceedings provided for by Article 88(2) concerned
on the other hand Articles 4 and 5 of that law as well as
Article 15(16) of Law No 67 of 11 March 1988 (the
1988 Finance Act) and Law No 252 of 8 August 1991
which constituted the legal basis for the granting of the
subsidies cited in Article 5 of Law 290/99.

(14)

By letter dated 31 January 2001, the Italian authorities
the deadline set by the
asked for an extension of
Commission for the presentation of
the information
requested in its letter of 13 December 2000.

(19) As already stated in recital 17 above,

this decision
concerns only the aid provided for by Article 4 of Law
No 290 of 17 August 1999, which has been assessed as
State aid C/7A/2000.

(15)

By letter dated 12 July 2001, the Italian authorities
transmitted the information requested.

(16)

The Commission also received comments from inter-
ested third parties by letter dated 30 June 2000.
It
forwarded them to Italy, which was given the oppor-
tunity to express its views. No specific comments with
respect to this letter were sent by the Italian authorities.

(17) On 12 March 2002, on the grounds of the different and
unrelated nature of the aid measures provided for by
Article 4 of Law 290/99 on the one hand and of those
provided for by Article 5 of that law and by Article
15(16) of Law 67/88 and Law 252/91, the Commission
decided to split the case into two different parts, namely
case C/7A/2000 concerning Article 4 of Law 290/99
and C/7B/2000 concerning Article 5 of Law 290/99,
Article 15(16) of Law 67/88 and Law 252/91. This
decision concerns only the aid measures provided for by
Article 4 of Law 290 of 17 August 1999. However, it

(1) OJ L 83, 27.3.1999, p. 1.
(2) OJ C 148, 27.5.2000, p. 2.

Article 4 of Law No 290 of 17 August 1999

(20) Article 4 of Law 290 of 17 August 1999 provides for
measures to facilitate agricultural credit operations. In
particular, it extends for twelve months the repayment
period for operating,
improvement and agricultural
loans due on 31 March 1998. The beneficiaries are
agricultural holdings primarily engaged in olive produc-
tion in Apulia, Calabria and Sicily, run by owner-occu-
piers or full-time farmers or olive-growing cooperatives
who have been hit by the serious crisis on the market
for olives and olive oil. Agricultural holdings and olive-
growing cooperatives in other olive-growing regions can
also qualify for these measures under the same rules and
procedures if similarly affected by the crisis on the
market for olives and olive oil. The Article defines an
agricultural holding or an olive-growing cooperative
primarily engaged in olive growing as an entity that
derives at least 50 % of its gross commercial production
from olives.

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The extended repayment schedule is supported by a
public contribution to the interest payments pursuant to
the Decree of the President of the Council of Ministers of
9 November 1985 laying down the rules for establishing
the minimum annual subsidised rates to be used for
agricultural credit operations. An appropriation of
ITL 10 billion in public funding has been provided for
1999 from the ‘National Solidarity Fund’.

(25)

(21)

(22)

The Italian authorities initially justified the measures
provided for by the said Article 4 by stating that ‘these
provisions are needed to help olive growers in Calabria,
Apulia and Sicily who have had serious and unsustain-
able difficulties in marketing their products in the 1997
to 1998 marketing year because of adverse weather
conditions, significant imports of olive oil from non-
Community countries in the Mediterranean basin and
the sudden fall in the price processors pay for olives,
with serious income and operating consequences for the
In the same letter, the Italian
enterprises concerned’.
authorities added that, for those reasons, ‘olive-growing
holdings found themselves in such serious financial diffi-
culties that they were unable to make the repayments on
the agricultural, operating or improvement loans due on
31 March 1998. To assist individual and grouped olive-
growing holdings unable to repay the debt contracted
with a view to olive production, the authorities therefore
decided to extend by 12 months the expiry date of 31
March 1998, the normal date on which loans for meas-
ures in the olive oil year fell due’. The letter of 30
November 1998 also stated that the credit assistance
was similar to that provided for in Article 4 of Law No
185 of 14 February 1992 (1), which could be activated
where farm holdings suffered financial loss as result of
catastrophic events that made usual harvesting difficult.
According to the Italian authorities, ‘this would therefore
be a one-off aid measure, relating solely to the 1997 and
1998 marketing years and limited to the three regions of
Apulia, Calabria and Sicily’.

could certainly not be invoked by Member States as an
‘exceptional occurrence’ since difficult market conditions
due to competitive pressure from other countries are
just part of the normal play of market forces.

In the following letter of 25 October 1999, the Italian
‘the aid was not based on
authorities specified that
market difficulties, which are a normal part of an open
market, but on riots and public disorder resulting in
road and rail blockades, as set out
in the reports
submitted by the Prefects of the affected Provinces. The
unrest became widespread with the simultaneous land-
ings on the Apulian coast of illegal Albanian immi-
grants, causing fears of economic collapse and increasing
social unease’. For the Italian authorities, it was obvious
that they ‘could not respond to this explosive situation
with public order measures alone, and the measure in
question, adopted out of a sense of need and urgency,
has to be seen in that context’. The Italian authorities
accordingly concluded that
‘an exceptional
measure to tackle a serious, unforeseen and unforesee-
able situation easily qualifying as an “exceptional occur-
rence” under Article 87(2)(b) of the Treaty which, as the
Commission itself correctly concludes, also covers situa-
tions of public disorder or strikes.
the
measure should not be seen as aid per se, but as a
measure to reduce social disorder and prevent more
serious disorder’.

In essence,

it was

(26) No further information on this specific measure was
added by Italian authorities in the letters which followed
the opening of procedure. In the first letter following the
the aid measure
opening (2)
provided for by Article 4 of Law 290 had not been
implemented and the relevant aid not been granted.

they simply stated that

(23)

Based on these comments, the Italian authorities asserted
in their letter of 30 November 1998 that
the aid
measure qualified under Article 87(2)(b) of the EC Treaty
as ‘aid to make good the damage caused by natural
disasters or exceptional occurrences’.

(24)

The Commission replied by letter of 28 January 1999,
reminding the Italian authorities of its policy on national
aid where agricultural production or the means of
production have been harmed,
specifying that an
increase in the volume of imports from third countries

III. COMMENTS FROM INTERESTED PARTIES

(27)

The Commission received only one letter from interested
parties. The letter, dated 30 June 2000, was sent by
Conazo — Consorzio Zootecnico Nazionale Sarl (National
Zootechnic Consortium) writing in its capacity as leader
of a group of companies which benefited from the funds
granted by the Italian authorities on the basis of Laws
No 252/91 and 67/88 which were the subject of the
In its letter,
Commission's opening of proceedings.
Conazo made comments exclusively on Article 5 of Law
290 of 17 August 1999 and Laws 252/91 and 67/88,
which are not covered by this decision.

(1) The law is currently being examined within the framework of

State aid No C 12/95.

(2) Letter of 18 May 2000.

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IV. ASSESSMENT

(28) Article 87(1) EC provides that any aid granted by a
Member State or through State resources in any form
whatsoever which distorts or
to distort
competition by favouring certain undertakings or the
production of certain goods shall, insofar as it affects
trade between Member States, be incompatible with the
common market.

threatens

(29) Articles 87 and 88 of the Treaty apply to the production
and trade in the products in favour of which the Italian
authorities decided to grant aid. Indeed, Article 33 of
Council Regulation No 136/66/EEC of 22 September
1966 on the establishment of a common organisation of
the market in oils and fats (1) lays down that, save as
otherwise provided in the Regulation, Articles 92, 93
and 94 of the Treaty shall apply to the production of
and trade in olives and olive oil.

regions the same serious crisis on the olives and olive oil
market. The extended repayment schedule is supported
by a public contribution to the interest payments which,
for the year 1999, has been set at ITL 10 billion. The
extension in the terms of the repayment gives the bene-
ficiary agricultural undertakings a financial respite which
they would otherwise not be able to enjoy. This advan-
tage is compounded by the public contribution to the
interest payments, which will relieve the same undertak-
ings of the burden associated with the payment of the
full interest rate applicable to their loans. In this respect
the two elements above favour the beneficiary undertak-
ings vis-à-vis other agricultural undertakings which, in
the same situation, would have to rely solely on their
resources by paying the instalments
own financial
immediately they fall due and at the full interest rate
applicable to them. According to the case-law of the
Court of Justice, improvement in the competitive posi-
tion of an undertaking as a result of State financial aid
leads to possible distortion of competition compared
with other competing undertakings not receiving such
assistance (2).

Existence of aid

(30) Article 4 of the Law in question extends the time limits
for repaying loans of various types taken out by partic-
ular agricultural holdings in Apulia, Calabria and Sicily
primarily engaged in olive growing. The Article extends
this benefit under the same terms to all olive-growing
holdings
in other olive-growing
regions which share with holdings in the above three

and cooperatives

(31) Moreover, as shown from the two tables below, there is
heavy intra-Community trade in olives and olive oil and
the measure
distorting
competition and affecting trade between the Member
States.

therefore

capable

of

is

Italian trade with the rest of the EU

Imports

Exports

1998

1999

2000

1998

1999

2000

3 236

2 910

2 377

470

550

634

(EUR '000)

593

386

233

482

478

485

644 154

631 850

611 367

187 450

288 404

265 078

(2) According to the case-law of the Court of Justice,

improvement
in the competitive position of an undertaking resulting from
State
competition
compared with other competing undertakings not receiving such
assistance, Case C-730/79 [1980] ECR 2671, paragraphs 11 and
12.

aid generally points

to a distortion of

fresh

Olives,
refrigerated
(excluding olives for the production
of oil)

or

Olives, fresh or refrigerated, for the
production of oil

Olive oil and its fractions - obtained
from fruits of the olive tree, only by
mechanical or physical processes,
under conditions which do not alter
the oil, even if refined, but not
chemically modified

(1) OJ 172, 30.9.1966, p. 3025/66.

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Total EU trade

Olives, fresh or refrigerated (excluding olives for the
production of oil)

1998

16 369

Exports

1999

14 409

(EUR '000)

2000

16 107

Olives, fresh or refrigerated, for the production of oil

10 280

9 370

9 566

Olive oil and its fractions - obtained from fruits of
the olive tree, only by mechanical or physical
processes, under conditions which do not alter the
oil, even if refined, but not chemically modified

1 129 929

1 187 146

1 131 828

(32)

The Commission therefore concludes that the measure is
caught by the prohibition in Article 87(1) of the EC
Treaty.

(33)

The prohibition in Article 87(1) is followed by exemp-
tions in Article 87(2) and (3).

However, because of the inherent difficulties in fore-
seeing such events, the Commission evaluates proposals
to grant aid in accordance with Article 87(2)(b) on a
case-by-case basis, having regard to its previous practice
in this field. Once the existence of a natural disaster or
an exceptional occurrence has been demonstrated, the
Commission will permit aid of up to 100 % to compen-
sate for material damage.

(34)

(35)

Italian authorities have always maintained that the meas-
ures to facilitate agricultural credit operations provided
for by Article 4 of Law 290 fall under Article 87(2)(b) of
the Treaty, which states that aid to make good the
damage caused by natural disasters or exceptional occur-
rences is compatible with the common market.

In order to establish whether the aid at issue can actually
benefit from the exception laid down in Article 87(2)(b)
of the Treaty, they need to be assessed in the light of
point 11(2)(1) of the Community Guidelines for State
aid in the agriculture sector (1) (hereinafter the Guide-
lines) which concerns aid to make good the damage
caused by natural disasters or exceptional occurrences.
As stated in the abovementioned point, this aid consti-
the
tutes exceptions from the general principle of
incompatibility of State aid with the common market
laid down by Article 87(1) of the Treaty. For this reason,
the Commission has consistently held that the notions
‘exceptional occurrence’
of
contained in Article 87(2)(b) must be interpreted restric-
tively.

disaster’

‘natural

and

(36) Hitherto the Commission has accepted that earthquakes,
avalanches, landslides and floods may constitute natural
disasters. Exceptional occurrences which have hitherto
been accepted by the Commission include war, internal
disturbances or strikes and with certain reservations and
depending on their extent, major nuclear or industrial
in widespread loss.
accidents and fires which result

(1) OJ C 232, 12.8.2000, p. 19.

(37) With regard to the above, and as already recalled in the
opening of procedure, it must first of all be pointed out
that Article 4 of Law No 290 speaks in quite general
terms of a ‘serious crisis on the olives and olive oil
market’, a wording which could be used to justify
supporting the holdings in all kinds of disturbance or
difficulty that are not necessarily the exceptional cases
referred to by the Italian authorities and required if
Article 87(2)(b) of the EC Treaty is to apply.

(38)

To explain the crisis,
in their letter of 30 November
1998 the Italian authorities initially spoke of ‘serious
and unsustainable difficulties in marketing their products
because of significant imports of olive oil from non-
Community countries in the Mediterranean basin and
the sudden fall in the price processors pay for olives,
with serious income and operating consequences for the
enterprises concerned’. The authorities maintained that
the occurrence was so serious and exceptional that the
Italian Parliament had been compelled to adopt Law No
313 of 3 August 1998, the purpose of which was to
protect
Italian olive oil and increase its commercial
value. They went on to say, however, that the measures
to safeguard Italian oil did not resolve the crisis affecting
olive-growing holdings in such difficulties that
they
could not make the repayments on their agricultural,
operating and improvement loans due on 31 March
1998.

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(39)

to the fact

In reply to these comments, the Commission drew the
Italian authorities' attention (1)
that an
increase in the volume of imports from third countries,
with the inevitable drop in prices and marketing difficul-
ties this brings about, cannot be cited by a Member State
as an exceptional occurrence warranting the grant of aid
of this kind or, in general, aid of any kind, regardless of
the seriousness of the problem and its impact on produ-
cers. Difficult market conditions arising from competi-
tive pressures from other countries are a normal part of
the play of market forces. All producers operating in the
market are exposed to these conditions and must adopt
appropriate measures to deal with them. The adoption
of aid measures in favour of the producers of specific
areas of one Member State or of one Member State as a
whole would simply shift the market difficulties from
the undertakings beneficiary of the aid to those of other
Member States, which,
though affected by the same
crisis, cannot benefit from similar forms of aid and
therefore have to cope with the market crisis with their
own resources and means. Such an aid would by defini-
tion distort competition and affect
trade between
Member States.

(42)

(43)

(40)

In reply to the Commission's objections,
the Italian
authorities in their letter of 25 October 1999 corrected
their position by stating, as cited in recital 25 above,
that the aid was not based on ‘market difficulties —
which are a normal part of an open market — but on
riots and public disorder resulting in road and rail block-
ades, as set out in the reports submitted by the Prefects
of
the affected Provinces’. According to the Italian
authorities, the situation was further worsened by the
‘simultaneous landings on the Apulian coast of illegal
Albanian immigrants, causing fears of economic collapse
and increasing social unease’. The Italian authorities,
therefore, considered this to be an urgent and necessary
public order measure which should accordingly be
included in the definition of internal disorder or strikes
under Article 87(2)(b) of the Treaty.

(41) Aside from the contradiction in the two versions
provided by the Italian authorities in their first two
letters (2) to the Commission prior to the opening of
procedure, the same authorities never provided informa-
tion in support of the grounds put forward by them in
such letters nor have they provided any information
justifying their claims after the opening of procedure,

(1) Commission letter of 28 January 1999.
(2) Letters of

the Italian authorities to the Commission dated 28

October 1998 and 25 October 1999.

despite the Commission's injunction to provide all the
information necessary to assess the case.

The doubts expressed by the Commission in its opening
of procedure have not been dispelled by the Italian
authorities and the Commission therefore doubts that
the derogation in Article 87(2)(b) of the Treaty could be
applied to the measure provided for in Article 4 of Law
290/99.

Based on previous Commission's practice (3), the riots
and public disorder described by the Italian authorities
might qualify under the definition of public disorder and
strikes pursuant to Article 87(2)(b) of the Treaty and,
accordingly, give rise to a reimbursement of up to
100 % for the damage incurred, regardless of its scale.
However, if it is true that public disorder and strikes can,
under certain circumstances, be considered as ‘excep-
tional occurrences’ within the meaning of Article
87(2)(b) of the Treaty, it is also true that, first of all, such
disorder must be shown to have occurred and secondly,
once demonstrated that they indeed took place, it must
also be proved, beyond any reasonable doubt, that there
is a direct link between such disorder and the damage
incurred by the potential aid beneficiaries.

(44) No evidence in this respect has ever been supplied by
the Italian authorities, either before or after the opening
of procedure, even though, according to the Italian
authorities, the street riots and disorder cited apparently
resulted in road and rail blockades described in reports
which were sent by the Prefects in the affected prov-
inces. These documents were never sent to the Commis-
sion and the Italian authorities sent no other document
capable of proving that an effective state of emergency
existed as a result of these events. The authorities did
not give exact dates for the events or their time frame,
nor did they specify the exact locations where they
occurred or the circumstances that brought them about.

(45)

It is also not clear why these events only selectively
affected the olive sector and not the entire agricultural
sector or indeed the entire economy of
the regions
involved. No quantified figures for the damage caused
have ever been supplied. No information whatsoever has
been supplied to explain how the riots and road block-
ades at issue could actually result in the severe disrup-
tion to olive and olive-oil production claimed by the
Italian authorities.

(3) See, for example, Aid C 3/94 — France — Road blocks.

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(46) Moreover, given that the Italian authorities maintain the
geographically limited and temporary nature of
the
measure, it is not clear why they decided to extend the
facilities, at the same conditions, to all olive-growing
holdings or cooperatives in other olive-growing regions
facing a serious crisis on the olives and olive oil market
in addition to holdings located in Calabria, Apulia and
Sicily, which were the prime beneficiaries of the aid. The
aid was therefore never exclusively restricted to agricul-
tural undertakings in Apulia, Calabria and Sicily which,
according to the Italian authorities, were directly affected
by the events in question. Extending the measure to all
olive-growing holdings or cooperatives located in all
Italian olive-growing regions would have been justified
only where the events had assumed national importance,
something the Italian authorities have failed to demon-
strate.

(47)

(48)

The national coverage of the measure corroborates the
Commission's belief that the measure was adopted to
help undertakings in difficulty to confront a serious debt
crisis arising from factors that had nothing to do with
the reasons put forward by the Italian authorities. The
aid in question could therefore have been granted to
save from bankruptcy the enterprises in question, and as
such should be evaluated not on the basis of Article
87(2)(b) of the Treaty but under Article 87(3)(c) in the
light of the relevant ‘Community guidelines on State aid
for the rescuing and restructuring of
firms in diffi-
culty’ (1).

The Commission made inquiries in this regard in its first
request for further information to the Italian authorities.
The Commission's doubts were based on the fact that in
the summary of
the Parliamentary proceedings sent
along with the original draft law (subsequently approved
as Law No 290) the rapporteur pointed out that the
Article providing for easy agricultural credit terms (the
then Article 5) was the same as an Article already
presented in the draft of an earlier law but then deleted
in response to the European Commission's comments in
a letter sent to Italy on 5 March 1998. In this regard the
rapporteur also pointed out that, while the provisions in
question might have breached Article 87 of
the EC
Treaty, specific provisions did exist on State aid for firms
in the Commission document ‘Community guidelines on
State aid for rescuing and restructuring firms in diffi-
culty’. These considerations led the Commission to the
view that the Article could be interpreted in this way
and also led it to ask the Italian authorities for clarifica-
tion of this point. This request for clarification was

(49)

(50)

(51)

however completely ignored by the Italian authorities
who insisted on the applicability of Article 87(2)(b) to
the measure at issue.

This doubt was reiterated by the Commission in its
opening of procedure. In this case too, despite the infor-
mation injunction contained therein, no information
was given on this aspect and no attempt whatsoever was
made by the Italian authorities to justify the measure on
the basis of the Community guidelines on State aid for
rescuing and restructuring firms in difficulty. In their
letter of 18 May 2000, the Italian authorities simply
stated that the measure had not been implemented and
the relevant aid had not been granted. In their opinion,
the non-implementation of the measure put an end to
the debate with the Commission on the nature of the
measure and on the legal basis on which it should be
assessed.

It results from the above that the aid measures provided
for by Article 4 of Law No 290 of 17 August 1999
cannot benefit either from the exception provided for by
Article 87(3)(c) of the Treaty.

The Commission, therefore, can only conclude that the
aid measures provided for by Article 4 of Law No 290
of 17 August 1999 constitute operating aid and, as
such, are incompatible with the common market. The
present decision concerns only the aid scheme, which is
of a general and abstract nature and which, for the
abovementioned reasons, does not comply with the
applicable requirements. Such a decision is without
prejudice of any individual aid given to individual under-
takings which might qualify for a derogation and which
should be notified to the Commission pursuant
to
Article 88(3) of the Treaty to be assessed on its own
merits. Moreover, this decision does not concern, nor
farming, operating and
the
extend its
improvement loans due on 31 March 1998 for which
an extension is provided for by Article 4 of Law No 290
of 17 August 1999 and which are mentioned in that
Article.

effects

to,

V. CONCLUSIONS

(52)

From the abovementioned considerations, it results that
the aid measures provided for by Article 4 of Law No
290 of 17 August 1999 are incompatible with the
common market and cannot therefore benefit of any of
the exceptions to Article 87(1) of the Treaty.

(1) OJ C 288, 9.10.1999, p. 2.

(53) No recovery of the aid is necessary since the aid has not

been implemented nor paid,

L 194/44

EN

Official Journal of the European Communities

23.7.2002

HAS ADOPTED THIS DECISION:

Article 3

Article 1

This Decision is addressed to the Republic of Italy.

The aid measures designed to facilitate agricultural credit opera-
tions provided for by Article 4 of Law No 290 of 17 August
1999 are incompatible with the common market.

The aid may accordingly not be implemented.

Article 2

Italy shall
inform the Commission, within two months of
notification of this Decision, of the measures taken to comply
with it.

Done at Brussels, 3 April 2002.

For the Commission

Franz FISCHLER

Member of the Commission