Case C-290/02: Action brought on 8 August 2002 by the Italian Republic against the Commission of the European Communities
Date: 2002-09-28
Institutions: Court of Justice
Subjects: Italy, State aid, action for annulment (EU), public service, restriction on competition, services company

C 233/18

EN

Official Journal of the European Communities

28.9.2002

Pleas in law and main arguments

The applicant claims that the Court should:

— Breach of Article 8 of Commission Regulation (EC)
No 1663/95 (2): the Commission adopted the decision
which is the subject of this action,
including certain
corrections differing from those which may be directly
inferred from the documents produced by the Kingdom
of Spain, thereby failing to observe the procedure laid
down in Article 8(1) of Regulation No 1663/95, which
required it to wait for a reply from the Member State,
then to initiate a bilateral discussion to assess the
seriousness of the infringement and the harm caused to
the European Community, and, where appropriate, to
allow the Member State to take part in the conciliation
procedure.

As a result of that failure, Spain has been prevented from
adducing evidence and from submitting the documenta-
tion necessary to justify the expenditure made, something
which may be regarded as entailing a breach of the rights
of defence.

— In the alternative: the figure to be corrected, in particular
as regards the paying agency of Castilla-La Mancha, is
wrong.

( 1) Commission Decision of 12 June 2002 on the clearance of the
accounts of Member States’ expenditure financed by the European
Agricultural Guidance and Guarantee Fund (EAGGF), Guarantee
Section, for the 2001 financial year, OJ L 160 of 18.6.2002,
p. 28.

( 2) Commission Regulation (EC) No 1663/95 of 7 July 1995 laying
down detailed rules for the application of Council Regulation
(EEC) No 729/70 regarding the procedure for the clearance of the
accounts of the EAGGF Guarantee Section, OJ L 158 of 8.7.1995,
p. 6.

Action brought on 8 August 2002 by the Italian Republic
against the Commission of the European Communities

— annul Article 2 of the Commission’s decision of 5 June
2002 concerning the fiscal exemptions and loans on
preferential terms granted by Italy in favour of public-
service undertakings in the capital of which the State
holds a majority interest, which reads as follows:

‘The three-year exemption from income tax provided for
by Article 3(70) of Law No 549 of 28 December 1995
and by Article 66(14) of Decree-Law No 331 of 30 August
1993, as converted into law by Law No 427 of 29 Octo-
ber 1993, and the advantages deriving from the loans
granted pursuant to Article 9a of Decree-Law No 318 of
1 July 1986, as converted into law, with amendments, by
Law No 488 of 9 August 1986, in favour of joint-stock
companies established pursuant to Law No 142 of 8 June
1990 in the capital of which the State holds a majority
interest, constitute State aid within the meaning of
Article 87(1) of the Treaty. The aid in question is not
compatible with the common market.’

Pleas in law and main arguments

The Italian Government maintains that the measures to which
the Commission’s decision relates could not be regarded as
aid, at least at the time when they were adopted, and that,
consequently, they may now be regarded as existing aid within
the meaning of Article 1(b) of Regulation (EC) No 659/
1999 (1).

Having regard to the factual and legal circumstances in
which predominantly State-owned companies providing local
services have been operating up until now — and, in particular,
the system of exclusive rights which, in total compliance with
the Treaty, has characterised the economic activities pursued
by those companies — it has not been possible for them in
any way to distort competition, so that the measures in
question cannot be classified as aid within the meaning of
Article 87(1) of the Treaty.

(Case C-290/02)

(2002/C 233/29)

In any event, those measures fully satisfy the conditions
according to which they may be regarded as compatible
aid within the meaning of Article 87(3)(c) and, possibly,
Article 86(2) of the Treaty.

An action against the Commission of the European Communi-
ties was brought before the Court of Justice of the European
Communities on 8 August 2002 by the Italian Republic,
represented by Umberto Leanza, acting as Agent, assisted by
Maurizio Fiorilli, avvocato dello Stato.

(1) Council Regulation (EC) No 659/1999 of 22 March 1999 laying
down detailed rules for the application of Article 93 of the EC
Treaty (OJ L 83 of 27.3.1999, p. 1).