2006/620/EC: Commission Decision of 7 May 2004 on State Aid which Italy (Sicily) is planning for the agricultural sector (notified under document number C(2004) 1633)
Date: 2004-05-07
Institutions: European Commission
Subjects: Sicily, State aid, aid to agriculture, control of State aid, indemnification, road transport, strike

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 7 May 2004

on State Aid which Italy (Sicily) is planning for the agricultural sector

(notified under document number C(2004) 1633)

(Only the Italian version is authentic)

(2006/620/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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

Having called on interested parties to submit their comments
pursuant to the provision cited above (1) and having regard to
their comments,

Whereas:

(1)

(2)

I.

PROCEDURE

In accordance with Article 88(3) of the EC Treaty, Italy
notified the Commission, by letter dated 2 March 2001,
recorded as received on 5 March 2001, of the aids provided
in Sicilian Regional Law No 27/2000 on Urgent Measures
to compensate farmers for the harm caused by the strike of
road hauliers (hereinafter Regional Law No 27/2000).

sent

In response to Commission telexes Nos AGR 009603 of
20 April 2001 and AGR 034235 of 18 December 2001,
Italy
letter of
7 November 2001, recorded as received on 13 November
2001, and by letter of 31 July 2002, recorded as received on
5 August 2002.

information by

supplementary

(3)

By telex AGR 022152 of 20 September 2002 the
Commission asked for additional clarification and informa-
tion.

(4) Having received no reply, the Commission sent the Italian
authorities telex AGR 30656 of 20 December 2002, asking
them to reply within one month.

(5) After failing to receive a reply, the Commission informed
the competent authorities by telex AGR 07156 of 7 March
2003 that the notification had to be considered withdrawn
in accordance with Article 5(3) of Council Regulation (EC)
No 659/1999 of 22 March 1999 laying down detailed rules
for the application of Article 93 of the EC Treaty (2).

(6) On the same day the Commission departments concerned
received from Italy a letter dated 5 March 2003, recorded as
received on 6 March 2003, which,
in accordance with
Article 5(3) of Regulation (EC) No 659/1999, informed the
Commission that the notification was to be regarded as
complete because the information requested was not
available and asked the Commission to adopt a decision
pursuant to Article 4(5) of Regulation (EC) No 659/1999
on the basis of the information already provided.

(7)

(8)

By telex AGRI 09066 of 27 March 2003 the Commission
departments concerned informed the competent authorities
that they would accede to their request and that, in the light
of the information available, they would probably propose
that the Commission initiate the procedure provided for in
Article 88(2) of the Treaty.

By letter dated 25 April 2003 (SG(2003)D/229510), the
Commission informed Italy that it had decided to initiate
the procedure laid down in Article 88(2) of the Treaty in
respect of the aid measures provided for in Regional Law
No 27/2000.

(1) OJ C 127, 29.5.2003.

2003.

(2) OJ L 83, 27.3.1999, p. 1; Regulation amended by Act of Accession of

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(9)

The Commission decision to initiate proceedings was
published in the Official Journal of the European Union (3).
The Commission called on interested parties to submit their
comments.

(10) The Commission received comments from Italy by letter
dated 13 August 2003, recorded as received on 18 August
2003.

II.

DETAILED DESCRIPTION OF THE AIDS

(11) The notified aid is provided for in Article 1 of Regional Law
No 27/2000 and is aimed at compensating individual
thereof operating in the
undertakings and/or groups
production, processing and marketing of agricultural
products listed in Annex I of the Treaty for harm suffered
as a result of a road hauliers’ strike and roadblocks which
took place from 30 September to 8 October 2000 (at 3am)
in Sicily.

(12) According to the information provided, the strike and
roadblocks made it impossible to find vehicles for the
transport of agricultural produce and caused economic
harm to the operators concerned.
In particular it was
impossible to deliver the products which were ready for
transport or which had been collected and stored in
ripe produce, which as a
warehouses, or
consequence became overripe and could no longer be
marketed normally.

to collect

(13) Within the limit of the resources available, the envisaged
compensation would cover the total harm suffered by the
beneficiaries in the form of a reduction in income. The aids
would be granted to any farmers and undertakings
operating in Sicily whose annual turnover has demon-
strably fallen as a result of the event concerned.

(14) According to the information supplied, the detailed rules
governing the calculation of the losses and specifying the
documentation to be submitted by the beneficiaries were
laid down by the Regional Minister for Agriculture. The
compensation would concern in particular easily perishable
goods, such as fruit and vegetables, flowers, milk and milk
products the time of collection and/or delivery of which
corresponds to the period concerned by the strike and
roadblocks. The aid would be granted only for the products
which had to be delivered or collected between 30 Sep-
tember and 8 October 2000 and for which no alternative
form of preservation was possible or could be implemented
by the undertaking concerned. The documents produced to
the administration must make reference to the period
concerned. Priority in the compensation would be given to
the undertakings that could not deliver produce already
collected or harvested.

(15)

In order to prove the existence and extent of the harm the
beneficiary undertakings must produce the contract of
supply (requiring delivery of a certain quantity of produce
within a certain date), the transport document (indicating
the producer, the transporter, the produce to be transported
and the date of delivery) and, where the produce has already

(3) Cf. footnote [1].

been delivered, the invoice. Compensation would be paid to
the undertakings which demonstrate the non-performance
of the contract terms envisaged in their contracts of supply
(time, quantity, quality and price). If the price was not
established in the contract the competent authorities would
use as a reference the price indicated in the lists of the
Chambers of Commerce.

(16) There also appears to be provision for compensation for
farmers who, as a result of the strike and the roadblocks,
could not collect their produce at all and therefore lost it. In
this respect the competent authorities explained that the
harm suffered by the farmers would be calculated on the
basis of ‘expert reports drafted by qualified agronomist and
concerning the value of the production on the plants/trees’
which the beneficiaries must produce together with the
relevant contracts.

(17)

If the beneficiary delivers the produce to cooperatives or
other groups (organismi associativi), the compensation can be
paid either to the individual producer belonging to the
group or to the group itself. According to the clarification
provided, the loss and the compensation would in any case
be determined for the producer concerned.

(18) Overcompensation and cumulation with other aid mea-
sures have been excluded. Possible payments made under
insurance policies and revenue deriving from an alternative
use/sale of the agricultural products concerned would be
taken into consideration in the calculation of the aid. In
order to avoid any duplication of the compensation, due to
contractual harm or penalties paid to them by the striking
transporters, the beneficiaries will have to declare that they
have not initiated proceedings against the road hauliers
concerned.

(19) The budget for the aid measure amounts to ITL 1 300
million (about €671 394) for the financial years 2000 and
2001. Compensation would be in the form of a one-off
payment.

(20) Article 2 of the law providing for the aid measure contains
a suspensory clause which makes the implementation of
the aid conditional upon its approval by the Commission.

(21)

In its decision to initiate proceedings in respect of the
measure under scrutiny, the Commission noted that at that
stage of the procedure the derogations set out in paragraph
(2)(a) and (c) and in paragraph (3) (a), (b), (c), (d) and (e) of
Article 87 did not appear to be applicable in view of the
the
features of
notification was not intended to meet the conditions for
the application of those derogations.

the aid and the

circumstance that

(22) The Commission also noted that the Italian authorities had
indicated in their notification that
the strike and the
roadblock concerned should be regarded as an exceptional
occurrence, as referred to in Article 87(2)(b), and that the
aid measure should therefore be assessed in accordance
with that provision.

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(23) The Commission recalled in the decision to initiate a
procedure that according to its practice, because they
constitute exceptions to the general principle of
the
incompatibility of State aid with the common market
enshrined in Article 87(1) of the Treaty, the Commission
has consistently held that ‘natural disaster’ and ‘exceptional
occurrence’, as referred to in Article 87(2)(b), must be
interpreted restrictively. 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 accidents and fires which result in widespread
loss (4). Once the existence of a natural disaster or an
exceptional occurrence has been demonstrated, the Com-
mission will permit aid of up to 100 % to compensate for
material harm. Compensation should normally be calcu-
lated at the level of the individual beneficiary, and in order
to avoid over-compensation, any payments due,
for
example under insurance policies, should be deducted from
the amount of aid. The Commission will also allow aid to
compensate farmers for loss of
income resulting from
the destruction of the means of agricultural production,
provided that there is no over-compensation.

(24)

In its decision to initiate the procedure the Commission
the information available did not make it
noted that
possible to conclude that the event concerned by the case
under examination constituted an ‘exceptional occurrence’
within the meaning of Article 87(2)(b).

(25)

In their notification the Italian authorities had indicated
that the strike and the roadblocks concerned were to be
considered an exceptional occurrence such as referred to in
Article 87(2)(b) of
the Treaty, as an event of similar
proportion and with similar consequential harm to the
local economy had never previously taken place in Sicily.

(26)

In order to prove the exceptional nature of the event under
examination the competent authorities had submitted some
newspaper cuttings and a copy of a report from the Office
of the Prefect for Palermo. According to the said report, on
29 September 2000 the road hauliers gave the police
authorities one day’s notice of
the demonstration they
planned to hold at
the points of access to Palermo.
According to the information provided in the report, the
demonstration should have featured the distribution of
leaflets aimed at raising the public’s awareness of the road
hauliers’ problems and the road hauliers had expressly
undertaken not to block the traffic at access points to the
port of Palermo or the Palermo-Catania and Palermo-
Trapani motorways. However the next day (30 September
2000) a demonstration of an entirely different nature was
said to have taken place, with roads being blocked in
Palermo and in other Provinces.

(4) Point 11.2 of

the Community Guidelines for State aid in the

agriculture sector (OJ C 232 of 12.8.2000, p. 19).

(27) After scrutinising the said report, the Commission depart-
ments concerned asked the competent authorities to reply
to a number of specific questions in order to evaluate the
possible exceptional nature of the event in question. Since
these questions did not receive a reply, the Commission
departments concerned expressed doubts as to whether the
event concerned could constitute an ‘exceptional occur-
rence’ within the meaning of Article 87(2)(b),
for the
following reasons:

a)

b)

c)

Advance notice in Palermo. In the case at hand the road
hauliers had given the police authorities one day’s
notice of the demonstration in Palermo. If a day’s
notice is sufficient under national law, it follows that
the competent authorities were informed of
the
demonstration in good time and could have taken
the necessary measures to keep it under control. In the
absence of a reply from the competent authorities the
Commission was unable to evaluate the extraordinary
nature of the demonstration.

that

Possible advance notice in other provinces. From the
information provided it would appear
the
demonstration took place not only in Palermo, but
also in other Provinces. In the absence of a reply from
the competent authorities the Commission cannot
exclude that the road hauliers also gave advance notice
of demonstrations to the authorities in Provinces
other than Palermo and that therefore those were
informed in advance of the events and were in a
position to foresee their likely extent.

reply from the

Possible application of the Law on strikes to the events
concerned. In order to evaluate the possible exceptional
nature of the events concerned, the Commission had
asked the Italian authorities to provide information as
to the possible application of the Italian Law on strikes
(Law No 146 of 12 June 1990, as amended by Law
No 83 of 11 April 2000) to the case at hand. In the
competent
absence of a clear
authorities, the Commission was unable to rule out
that, had the Law been applied/or applicable, the
adverse effects of the strike and the roadblocks would
reduced to a
or could have been eliminated or
minimum (e.g. essential services could have been
provided, the advance notice required would have
given the farmers sufficient time to seek alternative
means of transport or storage, and if the situation had
become so serious as to affect rights guaranteed under
the Constitution,
the competent authorities could
have ordered the transporters to interrupt the strike,
etc.). In order to assess the extraordinary nature of the
strike and roadblocks, the Commission also asked for
information on the types of offences allegedly linked
to them, information which has not been provided.

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d)

e)

f)

Reasons for the demonstration. The report from the
Office of the Prefect of Palermo indicated that the
strike did not end until 8 October (at 3am), an
agreement having been reached the day before
between the representatives of
the association of
Sicilian road hauliers, the regional government and
the then Minister of Transport. In order better to
understand the reasons for the strike and the road-
blocks,
the competent authorities were asked to
indicate the content of the agreement and to state
whether demonstrations by road hauliers had taken
place for the same reasons in other regions, or at
national
level, or whether the demonstration con-
cerned only Sicily. In the absence of a reply from the
the Commission expressed
competent authorities
doubts regarding the reasons for the events concerned
and whether the latter constituted an ‘exceptional
occurrence’.

Size and extent of the demonstration, strike and roadblocks.
From the information provided, it would appear that
the demonstration also took place also in other
Provinces. The competent authorities did not clarify in
which other Provinces the demonstration, strike and
roadblocks took place, did not indicate their extent
and consequences, and, apart from some newspaper
cuttings, did not provide any official documentary
evidence of such events in other areas of Sicily (e.g. the
report from the Office of the Prefect of Palermo). The
Commission therefore expressed doubts regarding the
geographical spread and extent of the demonstrations,
strike and roadblocks in the rest of Sicily.

Number of participants. The notice of the demonstra-
tion submitted by the association of road hauliers, a
copy of which was annexed to the report of the Office
of the Prefect of Palermo, appeared to indicate that
around 50 hauliers would take part in the demonstra-
tion in Palermo. In the absence of a reply from the
competent authorities indicating, with supporting
evidence, how many road hauliers were operating in
Sicily and roughly how many of them actually took
part in the demonstration in Palermo and in the rest
of Sicily, the Commission has doubts regarding the
number of people involved in the events concerned.

(28)

In addition to the doubts as to whether the notified event
qualified as an ‘exceptional occurrence’ the Commission
also expressed, in its decision to initiate the procedure, its
doubts regarding other aspects of the aid, namely: (a) the
(b) certain detailed rules for
beneficiaries of
calculating the harm suffered, (c) the products covered by
the aid and (d) the possibility that the measure might
constitute indirect aid to the striking transporters. The
reasons for these doubts are set out below.

the aid,

(a)

The beneficiaries of
the aid measure. According to
Article 1 of the notified Law and the standard form,
‘individual or
the beneficiaries of

the aid are:

associated enterprises engaged in the production,
processing and marketing of agricultural products’.
However the explanations provided by the competent
authorities regarding the detailed rules for calculating
the harm suffered and the compensation appear to
refer only to harm suffered by individual primary
producers of agricultural products. In the absence of
clarification from the competent authorities,
the
Commission has doubts as to who the beneficiaries
of the aid measure are and, if the aid is granted also to
operators engaged in processing and marketing, as to
the type of harm suffered by each of
these two
categories of operators and the detailed rules for
calculating and evaluating it.

(b) Certain detailed rules for calculating harm suffered. The
competent authorities provided examples of how the
harm suffered by farmers would be calculated where
products were delivered which were inferior, in quality
or quantity, to those originally agreed in the contract.
In these cases the harm suffered is the difference
between the agreed price for the agreed merchandise,
as established in the contract, and the price actually
paid to the farmer after goods were delivered which
lower quantity and/or quality (owing to
were of
overripeness). The
intend,
competent authorities
however, to compensate also farmers who, as a result
of the strike and the roadblocks, could not collect/
their produce and whose production was
harvest
therefore lost. In this case the harm suffered by the
farmers will be calculated on the basis of
‘expert
reports by qualified agronomists concerning the value
of the production on the plants/trees’ which were to
accompany the contracts. In the absence of clarifica-
tion from the competent authorities, the Commission
expressed doubts regarding the detailed rules for
calculating the harm suffered and the aid applicable in
this specific case, and why the detailed rules applicable
to this case would differ from those applicable in
other cases mentioned above. Moreover the Commis-
sion expressed doubts
regarding the nature and
purpose of the expert reports, when and how they
would be drafted, and the type of products in respect
of which the said expert reports would be used to
evaluate the harm suffered.

(c)

The products covered by the aid measure. The competent
authorities had indicated that the aid would concern
products that, because of their nature (perishability,
harvesting period, etc), needed to be delivered or
collected/harvested rapidly over the period concerned
(30 September to 8 October 2000) and for which no
alternative form of storage (freezing for example)
could be envisaged. In order to evaluate this aspect the
Commission departments concerned asked the com-
petent authorities to provide a list of the products. The
competent authorities did not provide such a list, but

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undertook to supply one at a later stage, before the
payment of the aid. Since such a list was deemed
necessary for the possible purpose of authorising the
aid measure,
the Commission expressed doubts
regarding the nature of the products for which the
competent authorities intend to grant aid.

IV.

COMMENTS FROM ITALY

(32) The Commission received comments from Italy, on behalf
of Regione Siciliana, by letter dated 13 August 2003,
recorded as received on 18 August 2003.

(d)

The possibility that the measure might constitute indirect aid
to the striking transporters. Since the aid measure aims
to make good the harm suffered by agricultural
undertakings because of the road hauliers’ demonstra-
tion, strike and roadblocks, the Commission could not
exclude that, should the road hauliers be required
under national law to pay compensation to agricul-
tural undertakings for (contractual and non contrac-
tual) harm caused by their demonstration, the aid
measure could be regarded as an indirect operating aid
to the striking road hauliers. Since in order to avoid
any duplication of compensation due to contractual
harm or penalties paid to them by the striking
transporters, the beneficiaries would have to declare
that they have not initiated proceedings against the
road hauliers concerned, and since the explanation
provided by the competent authorities — i.e. that the
road hauliers would be liable as private individuals
and not as undertakings — did not appear convincing
and did not appear to exclude that under national law
the striking road hauliers might indeed be liable for
harm to the farmers,
the Commission expressed
doubts regarding the nature of the actual recipients of
the aid, which could therefore also be seen as
operating aid to the road hauliers themselves or to
some of them.

(29) Having regard to the rules applicable to State aids, the
Commission expresses,
in its decision to initiate the
procedure, doubts both on the qualification of the notified
event as an ‘exceptional occurrence’,
to which the
derogation provided for in Article 87(2)(b) of the Treaty
would apply, and on some of
the aid
measure, doubts which did not allow the Commission to
conclude that the proposed measure was indeed intended to
compensate the harm suffered because of the event and did
not simply constitute operating aid.

the features of

(30) Accordingly, the aid referred to in Article 1 of Regional Law
No 27/2000 did not appear to be eligible for exemption
under Article 87(2) or (3) of the Treaty.

III.

COMMENTS FROM INTERESTED PART IES

(31) No comments from interested parties were received.

(33)

In this letter the Italian authorities communicated that they
did not have other information besides the information that
they had already provided in the notification and confirmed
that the aid scheme had not been implemented. The Italian
authorities also informed the Commission that
they
intended to publish its decision to initiate the procedure
on the measures concerned by publishing on the Regional
Gazette a notice containing a reference to the Official
Journal of the European Union No C 127 of 29 May 2003.

V.

ASSESSMENT OF THE AID

(34) Article 87(1) of the Treaty provides that any aid granted by
a Member State or through State resources in any form
whatsoever which distorts or threatens to distort competi-
tion by favouring certain undertakings or the production of
certain goods shall, in so far as it affects trade between
Member States, be incompatible with the common market.

resources,

through public regional

(35) The measure under examination provides for the granting
of aid,
to specific
agricultural undertakings in Sicily which will undeniably
derive an undue economic and financial advantage to the
detriment of other undertakings not receiving that aid.
According to the case-law of
Justice,
improvement in the competitive position of an undertaking
as a result of State financial aid leads to possible distortion
of competition compared with other competing under-
takings not receiving such assistance (5).

the Court of

(36) The measure affects trade between Member States in that
there is substantial intra-Community trade in agricultural
products as indicated by the table (6) below which lists the
overall value of agricultural imports and exports between
Italy and the EU in 1997-2001 (7). It must be considered
that within Italy, Sicily is a major producer of agricultural
products.

(5) See Case C-730/79 [1980] ECR 2671, points 11 and 12.
(6) Source: Eurostat.
(7) According to consistent case-law, the condition of the effect on the
trade is met since the benefiting company carries out an economic
activity which is the subject of trade between the Member States. The
simple fact that aid strengthens the position of this company in
relation to other competing companies in intra-Community trade,
makes it possible to consider that this trade was affected. With
regard to State aids in the agriculture sector it is settled case-law that,
even when the overall amount of aid in question is small and it is
divided among a large number of farmers, intra-Community trade
and competition are affected (see Case C-113/2000 [2002] ECR,
7601, points 30 to 36 and 54 to 56; Case C-114/2000 [2002] ECR
7657, points 46 to 52 and 68 to 69).

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Agriculture generally

EXPORTS

IMPORTS

ECU/EUR million

ECU/EUR million

(43) These aids are not intended to achieve or suitable for
achieving the objectives of promoting culture and heritage
conservation referred to in Article 87(3)(d), nor has Italy
submitted that Article 87(3)(d) is applicable.

1997

9 459

15 370

1998

9 997

15 645

(44) Since they do not facilitate the development of certain
economic activities or of certain economic areas, these aids
are not even intended to achieve or suitable for achieving
the objectives referred to in Article 87(3)(c), nor has Italy
submitted that Article 87(3)(c) is applicable.

1999

10 666

15 938

2000

10 939

16 804

2001

11 467

16 681

(37)

It should also be recalled that, according to the Court of
Justice, aid to an undertaking may be such as to affect trade
between the Member States and distort competition where
that undertaking competes with products coming from
other Member States, even if it does not itself export its
products. Where a Member State grants aid to an
undertaking, domestic production may for that reason be
maintained or increased with the result that undertakings
established in other Member States have less chance of
exporting their products to the market in that Member
State. Such aid is therefore likely to affect trade between
Member States and distort competition (8).

(38) The Commission therefore concludes that

the measure
under examination is caught by the prohibition in Article 87
(1) of the EC Treaty. The Italian authorities have never
contested this point.

(39) The prohibition in Article 87(1) is followed by derogations

in Article 87(2) and (3).

(40) The derogations listed in Article 87(2)(a) and (c) are
manifestly inapplicable given the nature of the aid measures
in question and their objectives.
Italy has not
submitted that either Article 87(2)(a) or (c) are applicable.

Indeed,

(41) Article 87(3)(a) is also inapplicable since the aids are not
intended to promote the development of regions where the
standard of
living is abnormally low or where there is
serious underemployment. Moreover Italy has not sub-
mitted that Article 87(3)(a) is applicable.

(42) Article 87(3)(b) is also inapplicable as the aids in question
are not intended to promote the implementation of an
important project of common European interest or to
remedy a serious disturbance in Italy’s economy. Moreover
Italy has not submitted that Article 87(3)(b) is applicable.

(8)

Judgment of the Court of Justice in Case 102/87 French Republic v
Commission of the European Communities [1988] ECR 4067.

(45) Considering the specific reference made by the Italian
authorities to Article 87(2)(b) and the nature of the aids
under examination which do not fall under any other
derogation from Article 87(1) of
the only
derogation which may be applicable is the one provided for
in Article 87(2)(b).

the Treaty,

Applicable provisions

(46) The applicability of the above-mentioned derogation must
be assessed in the light of the provisions applicable to the
granting of State aids in the agriculture sector, namely the
Community Guidelines for State aid in the agriculture
sector (9)(hereinafter the ‘Guidelines’), which entered into
force on 1 January 2000 (10).

(47) According to point 23.3 of the Guidelines, the Commission
applies the said Guidelines with effect from 1 January 2000
to new notifications of State aid and to notifications which
are pending on that date. Unlawful aid within the meaning
of Article 1(f) of Regulation (EC) No 659/1999 (11)
is
assessed in accordance with the rules and the Guidelines in
force at the time the aid is granted.

(48) Regional Law No 27/2000 was notified to the Commission
by letter of 2 March 2001, recorded as registered on
5 March 2001. Its Article 2 contains a suspensory clause
which makes the implementation of the State aid measures
contained in the Law conditional upon their approval by
the Commission (12).
In their observations the Italian
authorities confirmed that the aid measures had not been
implemented.

(9) OJ C 232, 12.8.2000, p. 19.
(10) Since the notification does not specify that the aid scheme under
examination applies only to small and medium-sized enterprises in
accordance with Commission Regulation (EC) No 1/2004,
this
Regulation is not applicable (see Article 20 of Commission
Regulation No 1/2004 of 23 December 2003 on the application
of Articles 87 and 88 of the EC Treaty to State aid to small and
medium-sized enterprises active in the production, processing and
marketing of agricultural products, OJ L 1 of 3.1.2004).

(11) OJ L 83, 27.3.1999, p. 1.
(12) Article 2 reads: ‘1. The measures provided for in this law are subject
to compliance with EC rules on State aid, and to the conclusion of
the procedures under by Article 88(2) and (3) of the Treaty’.

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(49) The examination of the aid measure therefore falls within
the scope of the Guidelines (13), and in particular Point 11.2
thereof (Aid to make good the harm caused by natural
disasters or exceptional occurrences).

(53) Since the Italian authorities have not provided any new or
further element of information or evaluation, the reasons
which led the Commission to adopt that decision remain
valid.

(50) Point 11.2 of the Guidelines provides that because they
the
constitute exceptions to the general principle of
incompatibility of State aid with the common market
enshrined in Article 87(1) of the Treaty, the Commission
has consistently held that the notions of ‘natural disaster’
and ‘exceptional occurrence’ contained in Article 87(2)(b)
must be interpreted restrictively. Hitherto the Commission
has accepted that earthquakes, avalanches, landslides and
floods may constitute natural disasters. Exceptional occur-
rences which have hitherto been accepted by the Commis-
sion include war, internal disturbances or strikes, and with
certain reservations and depending on their extent, major
nuclear or industrial accidents and fires which result in
widespread loss. The Commission did not, however, accept
that a fire at a single processing plant which was covered by
normal commercial insurance could be considered as an
exceptional occurrence. As a general rule, the Commission
does not accept that outbreaks of animal or plant diseases
can be considered to constitute natural disasters or
the
exceptional occurrences. However,
Commission did recognise a widespread outbreak of a
completely new animal disease as an exceptional occur-
rence. Because of the inherent difficulties in foreseeing such
events, the Commission will continue to evaluate 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 Com-
mission will permit aid of up to 100 % to compensate for
material harm. Compensation should normally be calcu-
lated at the level of the individual beneficiary, and in order
to avoid over-compensation, any payments due,
for
example under insurance policies, should be deducted from
the amount of aid. The Commission also authorises aid to
compensate farmers for loss of
income resulting from
the destruction of the means of agricultural production,
provided that there is no over-compensation.

in one

case

(51)

In its decision to initiate the procedure with regard to this
aid, the Commission set out clearly its doubts as to whether
the event giving rise to compensation constituted an
exceptional occurrence (see Recital 27 above).

(54) Regarding the exceptional nature of the event concerned,
the Commission took the view,
in accordance with its
consistent practice, that the implicit assumption for the
is that an exceptional
application of Article 87(2)(b)
occurrence is something is, by its nature, unforeseeable (14).

(55) The Commission also considered that it had in the past
accepted in one case (15) that a roadblock could constitute
an exceptional occurrence, in so far as that roadblock could
be assimilated to a strike that had disrupted the economic
activity in the country concerned to an appreciable extent
(between 29 June and 18 July 1992) and in so far as it was
possible, on the basis of the information available, to find a
direct link between the aid and the roadblock.

(56)

In the case at hand, despite receiving a request to that effect,
the Italian authorities have not provided the information
that would allow the Commission to regard the strike and
roadblocks as an exceptional event. In particular, in the
absence of information to the contrary, the Commission is
entitled to conclude that since the demonstration con-
cerned had been announced beforehand to the public
authorities it cannot be regarded as an unforeseen event
either for the public authorities or for the economic sectors
concerned by it. Strikes can be a frequent event and, if there
is advance notice, suitable precautions may be taken. The
element of unforeseeability is therefore missing in this case.
Moreover, since neither the actual causes of the strike nor
the reasons for it ending after eight days were clearly
indicated, it cannot be excluded that the possibility of an
imminent strike taking place in the transport sector were
known to the public, through the mass media, for a long
time.

(57) The fact

that

the announced demonstration may have
developed into a bigger event than expected does not per se
serve to transform it into an exceptional occurrence within
the meaning of Article 87(2)(b). Since the competent
authorities did not specify the numbers taking part (which,
according to the information provided should have
originally been 50) in relation to the total number of road
hauliers operating in Sicily, or the geographical extent of
the strike, the Commission cannot even conclude that, in
terms of dimension and developments, the event may have
exceptionally disrupted the economic activity in the
country concerned to a significant and appreciable extent.

(52)

In the same Decision the Commission also set out clearly its
doubts on other aspects of the aid measure, in particular on
some aspects which are essential for establishing a link
between the event concerned and the losses allegedly
caused by it for which the compensation is planned (see
Recital 28 above).

(13) OJ C 232, 12.8.2000.

(14) See point 92 of Commission Decision 2000/625/EC of 13 June
2000 on the aid scheme implemented by Ireland to promote the
transport of Irish livestock by sea to continental Europe (OJ L 263 of
18.10.2000, p. 17). See also point 33 of the Communication from
the Commission to the European Parliament and the Council — The
repercussions of the terrorist attacks in the United States on the air
transport industry/* COM/2001/0574 final */.

(15) See Commission Decision 96/148/EC of 26 July 1995 on the
measures decided by France as a result of the blockade of the French
road network in 1992 (OJ L 34 of 13/02/1996 p. 38).

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Lastly the event concerned lasted only eight days (from
30 September to 8 October at 3am, according to the
information provided), compared with the three weeks
(between 29 June and 18 July 1992)
in the case the
Commission regarded as
constituting an exceptional
occurrence (16).

(62)

In particular, Article 1 of the notified Law and the standard
notification form provide for the following beneficiaries:
‘enterprises, or groups thereof, engaged in agricultural
production, processing and marketing’. However
the
explanations provided by the competent authorities as to
the detailed rules for calculating the harm suffered and the
related compensation appear to refer only to the harm
suffered by individual agricultural primary producers. In the
absence of information from the competent authorities, the
Commission does not know exactly what type of operators
would benefit from the aid measure and, should the aid be
granted also to operators in the processing and marketing
sectors, the Commission does not know what type of harm
each of these two categories of operators suffered and
according to what criteria this harm was assessed and
calculated. The Commission therefore considers that the
losses for which compensation could be granted to (at least
some of) the beneficiaries may therefore be linked (also) to
causes other than the strike and the roadblocks concerned.

(63) With regard to primary producers, the competent autho-
rities planned to provide compensation also to those
farmers who, as a result of the strike and of the roadblocks
could not collect/harvest their produce and therefore lost
their production. In this case the harm suffered by the
farmers would be calculated on the basis of ‘expert reports
drawn up by qualified agronomists concerning the value of
the production on the plants/trees’ which will be presented
In the absence of any
together with the contracts.
clarification from the competent authorities, the Commis-
sion cannot accept
for
calculating the harm suffered and the related aid proposed
in this specific case since it is not clear why the said detailed
rules would in this case differ from those used for other
producers (see point 28 above); the nature and purpose of
the expert reports concerned are not clear either; it is not
specified when and how the said reports were drafted and,
lastly, it is not known for what type of products the said
expert reports would be used to evaluate the harm. The
Commission therefore considers that, for this reason too,
the losses for which compensation could be granted to (at
least some of) the beneficiaries may therefore be linked
(also) to causes other than the strike and the roadblocks
concerned.

the proposed detailed rules

(64) Moreover,

the

Italian
although repeatedly requested,
authorities never provided the Commission with a list of
products which, because of
their nature (perishability,
harvesting period, etc) actually needed to be delivered or
collected rapidly over the period concerned (30 September
to 8 October 2000), for which no alternative form of
storage (freezing for example) could be envisaged and for
which the Italian authorities envisaged the compensation.
Since this list was deemed to be necessary for the possible
authorisation of
the aid measure and in particular to
establish the link between the strike and the roadblocks and
the losses for which aid could be paid to the beneficiaries,
the Commission cannot establish such a link.

(58) Moreover, since it is not known whether and to what extent
the law regulating strikes was applied to the event in
question, it is not possible on the one hand to conclude that
the event was so serious as to make it necessary for the
public authorities to order the striking transporters to give
up the strike in order to protect the constitutional rights of
other citizens, and on the other hand to exclude that in
compliance with the said law, adequate precautions to
minimise or cancel the effects of the strike may have been
taken.

(59) Accordingly, on the basis of the information provided, the
Commission therefore conclude that the event in question
is an exceptional occurrence that has unforeseeably and
exceptionally disrupted the economic activity in the
country concerned to an appreciable extent. Actually from
the information available it appears that the event was
announced in advance, that it may have affected some
economic activities in a limited area in the country
concerned, and that its relatively short duration (compared
to the blockades that
the Commission has previously
accepted as an exceptional occurrence (17) cannot lead to
the conclusion that this event has caused to a significant
and appreciable extent a disruption in the economy of the
country concerned.

(60) Therefore, on the basis of Commission practice, the event
concerned constitutes a normal business risk and caused to
the economic operators concerned a type of harm which
they should either face with their own resources as falling
for which they should seek
within business risk, or
compensation under national
legally
law from the
responsible subjects.

(61) Moreover on the basis of the information available, unlike
in the case which the Commission held to be an exceptional
occurrence, in the case under examination, it is not possible
to conclude that there is a direct link between the strike and
the roadblocks and the aid to be granted. Indeed, since the
competent authorities confirmed that they do not have the
information requested by the Commission regarding,
in
particular, the products for which compensation would be
the measure (primary
provided,
producers or also processing and marketing operators)
and, in certain cases, also the detailed rules for calculating
the compensation (see point 28 above), the Commission
cannot conclude that the planned aid is necessarily and
exclusively linked to the losses caused by the strike and the
roadblocks in Sicily which occurred between 30 September
and 8 October 2000).

the beneficiaries of

(16) See footnote 15 above.
(17) See footnote 15 above.

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(65) Lastly, the Italian authorities did not exclude the doubt that
the road hauliers may be liable under national
law for
compensation to agricultural undertakings for the (con-
tractual and non-contractual) harm caused by their
demonstration, strike and roadblocks, and therefore that
the aid measure might be considered as constituting
indirect operating aid to the striking road hauliers
themselves.

the

(66) Since, in order to avoid any duplication of compensation
due to potential contractual harm or penalties paid to them
by the striking transporters, the beneficiaries would have to
declare that they did not initiate any proceedings against the
explanation
road hauliers
concerned, and since
provided by the competent authorities,
the road
hauliers would be liable as private individuals and not as
undertakings, did not appear convincing and did not
appear to exclude that under the national law the striking
road hauliers might be indeed liable for harm to the
farmers, the Commission cannot conclude that the real
beneficiaries of the aid measure are the operators of the
agricultural sector and that the measure is not (also) an
operating aid the road hauliers themselves or to some of
them.

that

(67)

In the light of
the above, since the Italian authorities
confirmed that they do not have the information requested
regarding any of the doubts expressed by the Commission
regarding both the exceptional nature of the event and the
other aspects of the aid measure, all the doubts that the
Commission had when it decided to initiate the procedure
remain and preclude a favourable assessment of the aid
measure as an aid to make good the harm caused by an
exceptional occurrence within the meaning of Article 87(2)
(b) of the Treaty.

(68) For the reasons set out above, the Commission therefore
concludes that the event concerned cannot be considered as
an exceptional occurrence within the meaning of the Treaty
and that,
in any case, the necessary and exclusive link
between the said event and the losses of the beneficiaries
which the aid is aimed at compensating could not be
established.

the common market. Furthermore, by their very nature,
such aids are also likely to interfere with the mechanisms of
the common organisations of the market.

(70) The aid under examination does not contain any incentive
element and does not require any counterpart on the part
of the beneficiary. As shown above, it does not even meet
the requirements under point 11 of the Guidelines for
consideration as a compensatory aid compatible with the
common market. The aid in question merely improves the
financial situation of producers, without contributing to the
development of the sector and, in particular, provides for
operating aids aimed at
relieving the beneficiaries of
operating costs linked to normal business risk.

(71) Consequently there is no justification, under the State aid
rules applicable to agriculture, for the aid measure provided
for in Article 1 of Regional Law No. 27/2000, in favour of
undertakings engaged in the production, processing and/or
marketing of agricultural products listed in Annex I of the
Treaty. The Commission therefore regards this type of aid as
operating aid which is not compatible with the common
market. This type of aid, which relieves the recipients of a
part of
their management costs, has no durable and
structural effect on the sectors concerned and it only gives
an advantage to Sicilian products over products which do
not benefit from comparable measures, in Italy or in other
Member States.

(72) The aid provided for in Article 1 of Regional Law No 27/
2000 cannot therefore benefit from a derogation under
Article 87(2)(b) or Article 87(3)(c) of the Treaty or from any
other derogation provided for by the Treaty.

VI.

CONCLUSION

(73)

In the light of the points set out above, the aid measure
provided for in Article 1 of Regional Law No 27/2000 is
incompatible with the common market and may not be
implemented.

(74) According to Article 2 of Regional Law No 27/2000, the
implementation of the aid measures envisaged by this Law
is conditional upon their approval by the Commission. In
their observations the competent authorities confirmed
that the aids had not been implemented,

(69) Regarding the possibility that

the aid measure under
scrutiny may satisfy other State aid rules for the agricultural
sector, point 3.5 of the Guidelines establishes that in order
to be considered compatible with the common market, any
aid measure must contain some incentive element or
require some counterpart on the part of the beneficiary.
Unless exceptions are expressly provided for in Community
legislation or
in these guidelines, unilateral State aid
measures which are simply intended to improve the
financial situation of producers but which in no way
contribute to the development of the sector are considered
to constitute operating aids which are incompatible with

HAS ADOPTED THIS DECISION:

Article 1

The State aids which Italy is planning to implement in favour of
undertakings engaged in the production, processing and/or
marketing of Annex I agricultural products under Article 1 of
Sicilian Regional Law No 27/2000 of 23 December 2000 to
make good the harm caused by the road hauliers’ strike and the

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roadblocks in Sicily between 30 September and 8 October 2000
are incompatible with the common market.

This Decision is addressed to The Republic of Italy.

Article 3

The above aids may accordingly not be implemented.

Article 2

Done at Brussels, 7 May 2004.

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

For the Commission
Franz FISCHLER
Member of the Commission