2006/225/EC: Commission Decision of  2 March 2005  on the aid scheme implemented by Italy for the reform of the training institutions  (notified under document number C(2005) 429)   (Text with EEA relevance)
Date: 2005-03-02
Institutions: European Commission
Subjects: Italy, State aid, aid for restructuring, control of State aid, educational institution, vocational training

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Official Journal of the European Union

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COMMISSION DECISION

of 2 March 2005

on the aid scheme implemented by Italy for the reform of the training institutions

(notified under document number C(2005) 429)

(Only the Italian version is authentic)

(Text with EEA relevance)

(2006/225/EC)

initiate the procedure laid down in Article 88(2) of the
EC Treaty in respect of the aid scheme at hand, imple-
mented not only by Piemonte Region but almost all over
the Country.

The Commission decision to initiate the procedure was
published in the Official Journal of the European Union (2).
The Commission called on interested parties to submit
their comments.

By letter of 06.06.2003 (A/33954),
the Commission
received comments from interested parties. They were
transmitted to Italy by letter D/55630 of 04.09.2003.
A demand for prorogation of the delay for reply was
sent by Italy by letter A/37007 of 10.10.2003. By
letter A/37736 of 11.11.2003 Italy submitted its
comments.

After a meeting between the Italian authorities and the
Commission's Services, which took place on 16 April
2003,
Italy to the opening of
proceedings were submitted by letter of 13.06.2003
(A/34148).

comments of

the

By letter of 18.12.2003 (D/58151)
asked Italy for further information to be submitted.

the Commission

accepted

The Italian authorities asked, by letter A/31204 of
19.02.2004, for a prorogation of the deadline, which
was
the Commission (D/51435 of
26.02.2004), and supplied the requested elements by
letters A/32487 of 07.04.2004 and A/32628 of
14.04.2004.

by

(5)

(6)

(7)

(8)

(9)

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 regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof,

Having regard to the decision C(2003)793fin (1), by which the
Commission decided to initiate the procedure laid down in
Article 88(2) of the Treaty,
in respect of the aid C22/2003
(ex NN168/2002),

Having called on interested parties to submit their comments
pursuant to the provisions cited above, and having regard to
their comments,

Whereas:

I. PROCEDURE

By letter dated 27 May 2002, registered on 31 May 2002
(A/14263),
complaint
the Commission received a
concerning the Decision No 57-5400, of the Regional
Executive of the Region Piemonte, of 25 February 2002.

A request for information was addressed to the Italian
authorities by letter D/55115 of 13 September 2002.
the
The
complainant, who has been informed of
the
follow-up given to the complaint by letter of
Commission D/55127
2002,
submitted additional
information by letter A/38090 of
05.11.2002.

September

16

of

(1)

(2)

(3)

(4)

II. DETAILED DESCRIPTION OF THE AID

By letter No 12998 of 24 October 2002, registered on 8
November 2002 (A/38204),
Italian authorities
replied.

the

By letter dated 21.03.2003 (SG(2003)D/229057),
Commission informed Italy that

the
it had decided to

(10) According to the complainant,

illegal aid would have
been awarded to certain training institutions, active on
the territory of
to
Decision No57-5400, of the Regional Executive of the
Region Piemonte, of 25 February 2002, which would
have been put into effect in contravention of Article
88(3) of the Treaty.

the Region Piemonte, pursuant

(1) OJ C110 8.5.2003, p. 8.

(2) See footnote 1

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that

(11) Nevertheless, it soon came out, from the documentation
attached to the reply of the Italian authorities to the
request for additional
information of the Commission
(A/38204),
the Decision 57-5400/2002, which
resulted in the complaint, only constituted the imple-
menting rule, as
the Piemonte Region, of
the national Ministerial Order(decreto ministeriale)
173/2001 (hereinafter referred to as MO 173/2001),
and particularly of one of
i.e.
“grants for payment of past burdens”.

sub-programmes,

regards

its

(12) Aid provided by the above mentioned sub-programme is
mainly targeted to reimburse debts of the training insti-
tutions for financial burdens and bygone wage costs. It is
provided in the form of non-repayable grants. In receipt
of aid are training institutions, constituted in different
forms, both profit-making and no-profit; large enterprises
are not excluded.

(13)

Further sub-programmes are also provided for by MO
173/2001 as follow:

(a) “incentive to voluntary departure of personnel”

(b) “adaptation

of

to
compulsory security standard and for improvement
of access to disabled”

equipment

buildings

and

(c) “improvement of information equipment”

(d) “training of trainers,

accreditation requirements”

in order to comply with the

(14)

The Italian authorities confirmed, by letter A/38204 of 8
November 2002, that the aid at hand has been granted
through a national fund, of the global amount of 180
billion ITL ( about EUR 93 million €), implemented and
distributed among the Italian Regions by MO 173/2001.
The latter is the implementing rule of national law 388
of 23 December 2000, “Disposizioni per la formazione
del bilancio annuale e pluriannaule dello Stato (legge
finanziaria 2001)”
law
(hereinafter
388/2000), stipulating at Article 118(9), the reform of
the Italian training institutions in view of their certifi-
cation.

refered

to as

(15)

By the same letter, it has been confirmed that the afore-
mentioned measure was not deemed, by the Italian
authorities, to constitute State aid, as in their view it
was
activities of
general interest.

intended to support non-market

of the training institutions, by means of the agreement of
May 2000, between central Government and Italian
regions, pursuant to the provision of Article 17 of the
law of 24 Juin 1997, No 196 (hereinafter referred to as
law 196/97). This formulation was confirmed by Article
118, par.9 of law 388/2000 and implemented by MO
173/2001.

(17) According to Italy,

training institutions funding was
intended to remove the correspondent organisation
shortcomings of
the beneficiaries, possibly susceptible
to undermine the success of the certification process.
As a matter of
fact, only the certificated training
agencies have been, in principle, allowed to implement
training activities financed by public resources from July
2003 onward.

(18) On the other hand, the training institutions were already
free to supply “private” training -which is to say market
training services on a competitive basis- since 1997,
further to the evolution of the relevant legal national
framework (namely the “pacchetto Treu”; national
law
144/99 and the State-Regions agreement of March
2000) and in several cases indeed implemented it.

(19) Nevertheless, according to Italy,

the measure under
scrutiny would not result in a competitive advantage,
as it is intended to preserve the expertise and know-
how of the “historical” agencies (for example, at least 3
to 5 years running covenant with the funding public
body are
and was
necessary at that stage to make them fulfil the conditions
set down for certification in order to keep them carrying
on training, on a liberalized market. In addition, these
agencies, operating mostly at local (sub regional) level,
would be, in its opinion, incapable to affect trade.

asked to be

eligible

aid)

for

(20) As it concerns the enforcement of the measure under
assessment over the territory of the Country, according
to the information supplied by Italy, the Regions Friuli
imple-
Venezia Giulia, Sicily and Campania have not
mented at all
the scheme at hand. Sardinia and the
Autonomous Province of Trento put the measure into
effect pursuant
to Commission Regulation (EC) No
69/2001 of 12 January 2001, on the application of
Articles 87 and 88 of the EC Treaty to de minimis
aid (3), while Toscana and Umbria did the same them
after the opening of proceedings on the present case.
Only the Autonomous Province of Bolzano was not
allowed any funding under M.O. 173/2001 and conse-
the measure at all. Some
quently did not implement
other regions actually implemented only part of
the
sub-measures in cause.

(16)

Italy also pointed out
the certification system to be
implemented was, at least de facto, tied to the reform

(3) O.J. L10 of 13.01.2001, p.30

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(21)

(22)

(23)

(24)

(25)

(26)

III. GROUNDS FOR INITIATING THE PROCEDURE

First of all, the Commission observed that only training
agencies were in receipt of the aid, granted from a fund
expressly conceived by a national rule. In addition they
were selected on the basis of specific criteria, stipulated
by the Regions, thus the measure was to be considered
selective and implying public expenditure.

Secondly, the Commission expressed strong doubts as to
training in its whole, could be
whether vocational
considered as a non-market activity of general
interest,
as pointed out in the beginning by the Italian authorities.
In that respect, the Commission took the view that these
contributions were able to improve the financial situation
of the recipients of the aid, as they reduced the costs that
the beneficiaries would have normally had to bear by
themselves.

Finally, although training is likely to constitute a limited
object of intra-community exchanges,
it could not be
excluded that some training companies were active at
the community level. These undertakings might be
interested to enter the Italian training market.

The Commission therefore considered that the measure
might constitute State aid within the meaning of Article
87(1) of the Treaty.

Provided it had to be qualified as State aid, the measure
at hand should have been assessed on the basis of the
provisions of
relevant
Community rules.

the Treaty and of

the other

In this respect, the Commission took the view that just
part of
the aid for the adaptation of premises and
equipment, might benefit of an exemption, provided it
referred to additional costs of employment of disabled
workers.
sub-programme
“training of trainers” might benefit of an exemption, as
long as it met the criteria laid down in Commission
Regulation (EC) No68/2001 of 12 January 2001 on
the application of Articles 87 and 88 of the EC Treaty
to training aid (4).

Likewise,

under

the

aid

(27) On the contrary, at that stage of the dossier, all the other
measures had to be qualified, to the Commission’s mind,
as operating aid, hence not susceptible to be granted any
exemption, under any provisions of the Treaty.

IV. COMMENTS FROM INTERESTED PARTIES

(28)

from interested parties has only been
Comments
submitted to the Commission by an Italian training

agency, allegedly active at least at national level, which
is also a beneficiary of the measure taken into consid-
eration.

(29) While it

is of

the opinion that

the Italian rules for
accession to the training market are the same for
national and other Community undertakings,
it also
points out that the operational units of the training insti-
tutions are requested,
to be charged with
in order
training supported by public funding, to have reached
an efficiency threshold in the activity carried on in the
past and to have a close link with the productive and
social environment, according to criteria established by
the Regions. This is why no foreign training agency
would have been able to fulfil the conditions set down.

V. COMMENTS FROM ITALY

(30) According to Italy, the measure at hand does not affect
trade between Member States, as the certification system
(sistema di accreditamento), which is based on objective
criteria laid down in regional implementing rules, does
not establish any barrier or limit to the establishment
right of agencies coming from other regions or MS.

(31) Moreover, to the Italian authorities' mind, the newcomers
would not be damaged by the aid allowed to the Italian
agencies which are supposed to be already in trouble to
serve their own area, as confirmed by the losses suffered
in the past, the measure under examination was intended
to compensate for. Thus, in particular, aid in the form of
compensation for losses suffered in the past, engendered
by the
the
training institutions were entrusted with, given in the
framework of the public educational system, would not
constitute aid in the meaning of Art.87§1, according to
Italy.

implementation of vocational

training,

(32)

(33)

Furthermore, in Italy's view, there would be no interest
for foreign undertakings to enter the Italian “public”
training market, because of its lack of profitability. This
would be proved inter alia by the need for the aid under
examination.

Finally, non-profitable vocational training, subsidised by
public resources, not directly paid by the beneficiaries,
the public educational
given in the framework of
system, should not be qualified as market activity,
in
Italian authorities' opinion, an this in particular in the
light of the case law “Humbel” (5) and “Wirth” (6).

(4) O.J. L10 of 13.01.2001, p.20, and amended by Commission Regu-
lation (EC) No363/2004 of 25 February 2004 (OJ L63 of
28.02.2004,p.20)

(5) judgment of the Court of 27 September 1988 on the case C263/86,

E.C.R. 1988, p.5365, points 9-10; 15-18

(6) judgment of the Court of 7 December 1993 on the case C109/92,

E.C.R. 1993, p.I-6447

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(34)

(35)

(36)

the measure is
Piemonte region, while agreeing that
selective
resources, denied that
and involves State
advantage and effects on intra-community trade were
involved. With regard to the former,
it took the view
that the grants allowed only represented the compen-
sation for services provided by the training agencies, as
long as training supplied in the framework of public
education is at
in its
opinion there is no training services trade among MS,
the major obstacles being represented by language and
lack of
contrary a
community market of the “private” training (i.e. compe-
titive market training services),
in its mind, can indeed
exist.

stake; concerning the latter,

territory. On the

link to the

In any event, no prejudice would be brought to the
newcomers by these measures, as they would have not
had to undertake the costs the beneficiaries of the aid
were obliged to face in the past. And, even if
this
advantage would be proved,
in the view
the Region Piemonte, matter of distortion of a
of
in its opinion, Art.87(1)
merely local market, so that,
would not be applicable.

it would be,

the aid
(39) Only training agencies are beneficiaries of
the aid are
scheme. Furthermore the recipients of
the
light of
selected on a regional basis,
in the
available budget and of possible additional criteria,
in
respect of each Italian region, thus the selectivity of the
measure is twofold.

(40)

The presence of selectivity and public resources have
been also confirmed by Italy, in its observations.

VI.1.1 Presence of economic activity

(41)

It has first to be underlined that, in general terms, “the
in the context of competition
concept of undertaking,
law, covers any entity engaged in an economic activity,
regardless of the legal status (e.g. non-profit-making) and
of the entity or the way in which it is financed” and that
“any activity consisting in offering goods and services on
a given market is an economic activity” (7)

VI. ASSESSMENT OF THE AID

(42)

This view was also expressed in the 1996 (8) and
2000 (9)
the Commission on
services of general interest in Europe as well as in the
Commission report to the Laeken European Council (10).

communications by

The Commission's analysis concerns the aid scheme
constituted by the general measures in question, and
not individual grants of aid to particular subjects. Since
the opening of the procedure, the Italian authorities have
been fully aware of the Commission's doubts concerning
the scheme. If they considered that some particular cases
should have been assessed on an individual basis, they
should have had informed the Commission of
their
specific
information
needed for an individual assessment to be made.

and provided all

features

the

it has

underlined

been recently

(43) As regards in particular the distinction between services
of an economic nature and services of a non-economic
nature,
the
Commission (see in particular point 44 of the green
paper on SGI (11)), quoted, among others in the white
paper on SGI (12) that any activity consisting in offering
goods and services on a given market is an economic
activity. Thus, economic and non-economic services can
co-exist within the same sector and sometimes even be
provided by the same organisation. The internal market,
competition and state aid rules apply to the former.

by

VI.1. Existence of aid under Article 87(1) of the EC

Treaty

(37) Article 87(1) of the EC Treaty states that “any aid granted
by a Member State or through State resources in any
form whatsoever which distorts or threatens 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”.

that

these

(44) On the contrary, internal market and competition rules
do not apply to non-economic activities and therefore
have no impact on services of general
interest to the
indeed constitute non-
extent
economic activities. With regard to national education
in
the European court of Justice ruled that the State,
establishing and maintaining such a system,
is not
seeking to engage in gainful activity but is fulfilling its
duty towards its own population in the social, cultural
and educational field (13).

services

(38)

The aid under scrutiny is realised through the grant of
public resources from a fund of 180 billion ITL (about
93million EUR) which was expressly conceived by a
national rule and shared among almost all the Italian
regions, as it comes out from the annexe to the MO
173/2001. Therefore there is public fund expenditure.

(7) see judgments in joined Cases C-180/98 to C-184/98 Pavlov and

others [2000] ECR I-6451, paragraphs 74 and 75.

(8) OJ C281 of 26.09.1996, p.3.
(9) OJ C17 of 19.01.2001, p.4.
(10) COM(2001) 598fin
(11) COM(2003) 270 of 21.5.2003
(12) COM(2004) 374fin.
(13) see footnote 5

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(45)

(46)

technical

institute under

in particular stipulates that courses
Judgement Humbel
taught
the national
in a
education system cannot be regarded as services for the
purposes of Article 50 of the EC Treaty. Actually the first
paragraph of the latter Treaty provides that only services
“normally provided
to be
considered to be services within the meaning of
the
Treaty.

remuneration”

are

for

remuneration lays

Judgement Wirth (14) confirms the findings of the Court
in Case Humbel, according to which the essential char-
acteristic of
it
the service in question,
constitutes consideration for
and is normally agreed upon between the provider and
the recipient of the service. In the same judgment the
Court considered that such a characteristic was absent in
the case of courses provided under the national education
system.

in the fact

that

(47) More in general, according to the case law of the Court
of
Justice, many activities conducted by organisations
functions, which are not
performing largely social
profit oriented and which are not meant to engage in
industrial or commercial activity, will normally be
excluded
and
internal market rules (15).

from the Community

competition

(48)

In the case at hand,
it resulted, from the information
supplied by Italy, that the activity carried out by the
training institutes concerned was twofold. On the one
hand they assured institutional, social targeted vocational
training, they had been entrusted with, addressed to indi-
viduals, delivered in the framework of public education
system and paid by the State or its regions on the basis
of the mere reimbursement of certain eligible costs. On
in several
the other hand they were entitled to, and,
cases,
activities,
training
addressed both to undertakings and their employees
and individuals, paying a market price. Accordingly, an
obligation to separate the accounts, related to these two
fields of activity, had been imposed by Italy to the bene-
ficiaries.

exploited market

indeed

(49)

Thus, the former can be considered not to involve any
economic activity. This would result in the activity in
cause not being subject to the competition and internal
market rules, thus not falling under the scope of Article
87(1).

(50) Nevertheless the Commission notes that recent case law
also shows that the concept of economic activity is an
evolving concept linked in part to the political choices of
each Member State. Member States may decide to
transfer
traditionally
certain tasks
falling within the sovereign powers of
regarded as
States. Member States may also create the conditions
for a
necessary to ensure the existence of a market

to undertakings

(14) see footnote 6
(15) see footnote 6

(51)

(52)

(53)

product or service that would otherwise not exist. The
result of such state intervention is that the activities in
question become economic and fall within the scope of
the competition rules.

for

against

remuneration

In its judgment in “Ambulanz Glockner” (16) case, the
Court pointed out that the transport of patients is an
various
offered
activity
by
emergency transport
operators on the market
services and patient transport services.
In the case in
point,
services were provided by non-profit
making bodies. However, the Court recalled that these
particular characteristics are not such as to rule out clas-
sification as an undertaking within the meaning of
Article 87 of
the EC Treaty in cases where those
bodies carry out an economic activity.

these

In its judgment on “Henning Veedfald” (17) case,
the
Court ruled that the manufacture within a hospital of a
substance used in the course of a medical service at the
hospital constitutes an economic activity. The fact that
the service is not paid for directly by the patient but is
financed from public funds does not affect its classifi-
cation as an economic activity.

This approach has been confirmed in two other Court
judgments (18),
in which certain Member States argued
economic
services did not
that medical
activities on the ground that
receiving
treatment in a hospital needs not necessarily to pay for
the services provided. The Court
ruled that medical
activities are economic activities, irrespective of whether
to be paid for directly by the
the services need not
patients but by the public authorities or sickness funds.

constitute
the patient

(54) Moreover, the presence of an element of solidarity does
not necessarily rule out the possibility of carrying out an
activity in a profit making capacity. Some operators may
agree to take such aspects of solidarity into account in
the light of other benefits they may obtain from inter-
vening in the sector under consideration. Conversely,
non-profit-making entities may compete with profit-
making undertakings and may,
therefore, constitute
undertakings within the meaning of Article 87 of the
EC Treaty.

(55) As a consequence the Commission can not exclude that
some activities carried out by the training institutions,
even in the case of vocational
training given in the
framework of the public education system, were to be
qualified as economic activities.

(16) judgment of 25 October 2001, on case C475/99, point 19, ECR

2001, I-09089

(17) judgment of 10 May 2001, on case C-203/99, ECR 2001, I-3569
(18) judgments of 12 July 2001 on cases B.S.M. Smits/Stichting
and Abdon
[2001]

ECR I-5473)

Ziekenfonds, C-157/99
Vanbraekel, C-368/98 [2001]ECR I-5363

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(56)

Should the latter be the case, Art.86(2) of the Treaty -
undertakings entrusted with the operation of services of
general economic interest – would apply. The quoted
provision states that such undertakings are subject to
the rules of the Treaty, an in particular to the rules on
competition,
in so far as the application of such rules
does not obstruct the performance, in law or in fact, of
the particular tasks assigned to them. It further stipulates
that the development of trade must not be affected to
such an extent as would be contrary to the interest of the
Community.

(57) Accordingly,

the

given

training

institutions were
entrusted with a public service mission, within the
framework of the relevant national and regional rules,
by means of binding acts,
i.e. through the covenants
entered into among Italian regions and training insti-
tutions, and there was no risk of overcompensation, i.e.
as aid could not exceed the amount of the relevant costs,
according to the separate accounting established, an
exemption can be accorded pursuant to Article 86(2)
of the Treaty.

(58) On the contrary, the Commission draws the conclusion
the presence of economic activity is sufficiently
that
proved with respect
to the second type of activity
listed at point 48 above, and this on the basis of the
data supplied by the Italian authorities themselves.

VI.1.2 Distortion of competition and effects on trade

(59)

In order to fall within the scope of Article 87, aid must
distort or threaten to distort competition,
insofar trade
between Member States is affected. As far as State aid is
concerned, these two conditions are often linked.

the

strengthens

(60) As it concerns, in particular, intra-community trade, the
Court of First Instance (19) recalled that when financial
aid
undertaking
position
compared with other undertakings competing in intra-
regarded as
Community trade,
affected by that aid. This is so where the undertaking
receiving the aid is actively involved in trade between
Member States or participates
in contracts awarded
following a tendering procedure in several Member
States.

latter must be

the

an

of

(62)

(63)

(64)

(65)

with undertakings from other Member States, does not
itself participate in cross-border activities. Where a
Member State grants aid to an undertaking,
internal
supply may be maintained or increased, with the conse-
the opportunities for undertakings estab-
quence that
lished in other Member States to offer their services to
the market of that Member State are reduced.

Thus, neither direct participation to the export activities
by the recipients (20), nor proof of actual exchanges, in
the same market segment, between Member States are
necessary to prove the affectation of trade. In addition,
neither the relatively small amount of aid nor the rela-
tively small size of the recipient allow to draw, a priori,
the conclusion that trade is not affected.

In this respect, the Commission notes that in the case
under examination, some of the beneficiaries are active at
least at regional or supra-regional (sometimes national)
level and have a sizeable economic turnover which is
deemed to allow them to bridge the barriers to training
services supply being spread over the community market.
Furthermore, the Commission observes that some bene-
ficiaries are already active at a supra-national level.

States

(Switzerland)

Thus, in particular, a single recipient of the aid is already
operating in some Member States like Belgium (4 seats),
France (7 seats), Germany (4 seats) and U.K. (1 seat), non
Member
European
Countries (Argentine) as well. It is furthermore partner
in the “Exemplo” international network, composed by 14
European Training agencies, which is intended to reach
some targets as knowledge sharing, benchmarking, coop-
eration in the framework of the European projects, the
e-
development of a
commerce and on-line training.

specific market

segment

non

and

for

In the light of the above and as far as the effects on trade
are at stake, the Commission comes to the conclusion
in the meaning of
that the qualification of State aid,
to the
Art.87§1 of
intra-
measures
community trade is indeed susceptible to be affected.

the EC Treaty, with respect

confirmed,

at hand,

to be

as

is

(61) Moreover, aid may also be of such a kind as to affect
trade between Member States and distort competition
even if the recipient undertaking, which is in competition

VI.2. Assessment of the legality of the aid

(66)

The Commission observes that the notification obligation
pursuant to Article 88(3) of the EC Treaty has not been
fulfilled in the present case.

(19) judgment of 29 September 2000, on case T-55/99,‘Confederacion

Espanola de Transporte de Mercancias’, [2000] ECR II-03207.

(20) see among others judgment of 13.7.1988 on case 102/87 French
Rep v/s CCE, ECR 1988, p.04067 and judgment of 24.7.2003 on
case C280/00 Altmark, ECR 2003, p.07747, points 77 and 78.

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(67) Having not been previously notified to the Commission
as regards its compatibility with the State aid rules, the
aforementioned scheme has been put
in
contravention of Article 88(3) of the Treaty. It is conse-
quently unlawful.

into effect

decrease of
normally to bear by themselves.

the general costs the undertakings have

VI.3. Assessment of the compatibility with Article
87 of the EC Treaty

Grants for payment of past burdens

(68) While the sub-programme “grants for payment of past
burdens” could in principle qualify as “de minimis” (21), as
neither the sectors which are not covered by the “de
minimis” Regulation, nor aid to export related activities
or contingent upon the use of domestic goods are taken
into consideration by the scheme, it has to be stressed
that the amount of the aid often exceeds the ceiling of
100 000€.

(69)

Thus, the Commission holds the view that the measure
under consideration could not be deemed to be in
Regulation.
compliance with
Furthermore,
invoke
the qualification of the scheme at hand as “de minimis”.

the Italian authorities did never

“de minimis”

the

(73) As a matter of fact, operating aid may exceptionally be
granted only in regions eligible to the derogation of
Article 87(3)(a),provided that requirements set down at
point 4.15 of the regional aid guidelines (24) are met. In
the case at hand,
it is to be stressed that the relevant
national rule is applicable, unchanged, over the whole
territory of the Member State, without any distinction
aiming to bridge regional gaps.

(74)

(75)

The Commission takes the view that the scheme under
above
consideration does not
satisfy
mentioned requirements.
In addition, neither the SME
Regulation nor the regional aid guidelines have been
invoked by the Italian authorities with respect
to a
possible compatibility of the scheme.

any of

the

Furthermore,
the aid in question does not seem to
promote any other horizontal Community objective
according to Article 87(3)(c) of
the Treaty, such as
research and development, employment, environment
or rescue and restructuring, within the meaning of the
relevant guidelines, frameworks and regulations.

(70) As the present sub-programme does not take in consid-
eration any of the eligible costs laid down at Article 4,
point 7,
letters a) to f) of the Regulation on training
aid (22),
it could not be granted an exemption on the
basis of the above mentioned Regulation. Furthermore,
it has not been qualified as training aid by the Italian
authorities themselves.

(71)

If the aid is assessed on the basis of Commission Regu-
lation (EC) No 70/2001 of 12 January 2001, on the
application of articles 87 and 88 of the EC Treaty to
State aid to small and medium-sized enterprises (23), the
Commission notes that no investment aid is foreseen by
the present sub-programme, either in tangible or in
intangible assets. On the contrary it just aims to reduce
the current expenses, through the granting of aid related
to past burdens, to be qualified as operating aid, which
does not normally enjoy a favourable prejudice by the
Commission.

(72)

In particular, the grant of operating aid, not linked to any
extra-cost engendered by the accomplishment of a
is susceptible to result in a
mission of public service,

(21) see footnote 3
(22) see footnote 4
(23) O.J. L10 of 13.01.2001, p.33

(76)

The derogations laid down at Article 87(2) (a) to (c) (25)
of the Treaty are clearly not applicable in the present file.
The same conclusion may be drawn with respect to the
exemptions set down at Art.87(3), letters b) and d) (26).

Concerning sub-programmes “incentive to voluntary departure
of personnel” and “improvement of information equipment”

(77)

The reasoning applied with respect to sub-programme
“grants for payment of past burdens” is also applicable
for these sub-programmes.

(24) Guidelines on national regional aid, published in the O.J. C74 of

10.03.1998, p.9.

(25) Article 87(2) stipulates that the following aid shall be compatible
with the common market: (a) aid having a social character, granted
to individual consumers, provided that such aid is granted without
discrimination related to the origin of
the products concerned;
(b) aid to make good the damage caused by natural disasters or
exceptional occurrences; (c) aid granted to the economy of certain
areas of the Federal Republic of Germany…

(26) Article 87(3) declares compatible with the common market b) aid
to promote the execution of an important project of common
European interest; c)“aid to remedy a serious disturbance in the
economy of a Member State”, and d) “aid to promote culture and
heritage conservation where such aid does not affect
trading
conditions and competition in the Community to an extent that
is contrary to the common interest”.

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(78)

In fact, the Commission takes the view that the most part
of these aids have to be qualified as operating aid; hence
they can not be granted any exemption.

previous points 44-49, and according to the separate
accounts maintained,
an
is not
economic activity, aid granted vis-à-vis costs related to
such activity does not
the provision of
Art.87(1) of the Treaty, thus not qualifying as State aid.

considered to be

fall under

(79)

(80)

In particular, aid to encourage voluntary resignations of
to confer an undue
the employees, which appears
competitive advantage to the extent
it allows
training agencies in receipt of aid to decrease artificially
their personnel costs with respect to their competitors is
not deemed to qualify for any exemption, either in the
light of Commission Regulation No2204/2002 of 12
December 2002, on the application of Articles 87 and
88 of the EC Treaty to State aid for employment (27) or
on the basis of any other relevant rule.

that

infor-
Likewise, the expenses for the improvement of
mation equipment are not susceptible to qualify for an
exemption,
initial
neither
investment in the meaning of the SMEs Regulation (28),
nor represent a tool for the regional development, in the
sense of the guidelines on national regional aids (29).

constitute

they

an

as

Concerning sub-programmes
equipment
compulsory
to
improvement of access
trainers”

“adaptation of buildings and
for
standard
security
to the disabled'” and “training of

and

(81) Aid for the adaptation of buildings and equipment to
compulsory security standard may not be allowed any
exemption under any of the State aid rules in force at
for the reasons outlined at points 68 to 76
present,
above.

(82) On the contrary, the part of the aid for the adaptation of
premises and equipment, referring to additional costs of
employment of disabled workers, may benefit of an
exemption, under the Employment Regulation (30),
in
particular Art.6, par.2, letters (a) and (c).

(83)

Likewise, aid under sub-programme “training of trainers”
can enjoy an exemption,
in the light of the training
Regulation (31).

VII. CONCLUSIONS

(84)

To the extent that vocational training making part of the
public education system given to individuals, as set out at

(27) O.J. L337 of 13.12.2002, p.3.
(28) see footnote 23
(29) see footnote 24
(30) see footnote 27.
(31) see footnote 4

(85) On the other hand, should some activities carried out in
the public education system, be
the framework of
considered as an economic activity,
to the
evolution of the concept of economic activity as high-
lighted at points 50 to 55 above, they can be granted an
exemption under Article 86(2) of the Treaty.

further

(86) On the contrary, aid towards costs engendered by market
activities fulfils all the requirements to be qualified as
State aid, thus falling under the provision of Art.87(1)
of the Treaty.

(87)

The Commission regrets that, having been implemented,
to the extent it constitutes State aid in the sense of
Article 87(1),
in breach of Article 88(3) of the Treaty,
the aid scheme for the reform of the training institutions
is consequently unlawful.

(88)

and

security

standard

compulsory

Sub-programmes “adaptation of buildings and equipment
for
to
the
improvement of access to the disabled”,
for the part
concerning additional costs of employment of disabled
workers, and “training of trainers” may be granted an
exemption pursuant respectively to Commission Regu-
lation (EC) No2204/2002 of 12 December 2002 on
the application of Articles 87 and 88 of the EC Treaty
to State aid for employment (32) and Commission Regu-
lation (EC) No68/2001 of 12 January 2001 on the appli-
cation of Articles 87 and 88 of the EC Treaty to training
aid (33).

(89) Aid granted pursuant

“incentive

to sub-programmes “grants for
payment of past burdens”,
to voluntary
departure of personnel”, “improvement of
information
equipment”, “adaptation of buildings and equipment to
compulsory security standard and for the improvement
of access to the disabled'” -for the part concerning adap-
tation to compulsory security standard- are incompatible
with the common market.

(32) see footnote 27
(33) see footnote 4

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(90)

(91)

(92)

(93)

(94)

(95)

are

The commission observes that “de minimis” Regulation
No 69/2001 (34) could in principle apply to all
the
measures concerned, as neither the sectors which are
not covered by the regulation itself, nor aid to export
related activities or contingent upon the use of domestic
taken into consideration. Consequently,
goods
provided all
the requirements of Regulation (EC) No
69/2001 are met, and in particular the threshold of
100 000 EUR in any relevant
is
observed with respect to the single beneficiaries, the aid
allowed pursuant
to the measures at hand can be
qualified as “de minimis” aid, thus not falling under the
provision of Article 87(1) of the Treaty.

three years period,

be

This Decision concerns the aid scheme in question and
must
the
immediately.
implemented
is
Commission’s long established practice,
in accordance
with Article 87 of the EC Treaty, to require recovery
from the recipient of aid which under Article 88 of the
EC Treaty, has been unlawfully granted and is incom-
patible. This practice has been confirmed by Article 14
of the Council Regulation (EC) No 659/1999 (35).

It

to the possibility that

Commission also notes that a decision on aid schemes is
individual
without prejudice
measures may not consitute aid (because the individual
grant of aid is covered by the de minimis rules) or may
be deemed, wholly or partially, compatible with the
common market on its own merits (for instance, by
virtue of a block exemption regulation).

In the light of Article 14(2) of the Council Regulation
(EC) No 659/1999, the aid to be recovered pursuant to a
recovery decision shall include interest at an appropriate
rate fixed by the Commission. Interest shall be payable
from the date on which the unlawful aid was at the
disposal of the beneficiary until the date of its actual
recovery.

The interest shall be calculated in conformity with the
provisions laid down in Chapter V of Commission Regu-
lation (EC) No 794/2004 of 21 April 2004 imple-
menting Council Regulation (EC) No 659/1999 laying
down detailed rules for the application of Article 93 of
the EC Treaty (36).

To this end, Italy shall enjoin to the potential benefi-
ciaries of the scheme, within the two months of this
decision,
to reimburse the aid with the interests as
specified below. The total recovery shall be completed
at the latest at the end of the first fiscal year following
the date of notification of the present decision.

(34) see footnote 3
(35) JO L83 of 27.3.1999, p.1.
(36) OJ, L 140, 30.4.2004, p.1.

(96)

Italy shall provide the information requested using the
questionnaire attached in annex 1 of the decision, setting
up a list of the beneficiaries concerned and indicating
clearly the measures planned and already taken to
the
obtain an immediate and effective recovery of
illegal state aid. The Commission asks Italy to submit
within the two months of the decision all documents
giving evidence that
the recovery proceedings have
been initiated against the beneficiaries of the illegal aid
(such as circulars, recovery orders, etc.).

HAS ADOPTED THIS DECISION:

Article 1

1.
Aid granted by Italy, under law 388/2000 implemented
by MO 173/2001, vis-à-vis costs related to vocational training
the public
activities given to individuals, making part of
education system, according to the separate accounts main-
tained, does not fall under the provision of Art.87(1) of the
EC Treaty, thus not qualifying as State aid, to the extent that
these activities do not qualify as economic activities.

2.
Aid referred to at paragraph 1 above, granted vis-à-vis
the
economic activities, carried out
public education system, can be granted an exemption under
Article 86(2) of the Treaty.

in the framework of

Article 2

As long as it falls under the scope of Article 87(1) of the
1.
EC Treaty, the aid scheme which Italy has implemented on the
basis of national
law 388/2000, Art.118, par.9, Ministerial
Order (Decreto Ministeriale) No 173 of 30 May 2001, and
related implementing rules put
into force by the Italian
Regions, having not been previously notified to the Commission
pursuant to Article 88(3) of the EC Treaty, is unlawful.

The aid scheme referred to at paragraph 1 above,

is
2.
compatible with the common market with respect
to sub-
programmes “adaptation of buildings and equipment for the
improvement of access to disabled” and “training of trainers”.

The aid scheme, referred to at paragraph 1 above,

is
3.
incompatible with the common market, with respect to sub
programmes “grants for payment of past burdens”, “incentive
to voluntary departure of personnel”, “improvement of infor-
mation equipment”, “adaptation of buildings and equipment to
compulsory security standard”.

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Article 3

mentioned in Article 2, par.3 to reimburse the illegal aid and
the interests.

Italy shall take all necessary measures to recover from the
the aid referred to in Article 2, par.3 and

1.
beneficiaries
unlawfully made available to the beneficiaries.

Article 4

Recovery

shall be

2.
and in
accordance with the procedures of national law provided that
they allow the immediate and effective implementation of the
decision.

effected without delay

The Republic of Italy shall inform the Commission, within two
months of the date of notification of this Decision, of the
measures already taken and planned to comply with it. It will
provide this information using the questionnaire attached in
Annex 1 of this Decision.

3.
The recovery shall be completed at the latest at the end of
the first fiscal year following the date of notification of the
present decision.

Italy shall submit within the same period of time, all documents
giving evidence that
the recovery proceedings have been
initiated against the beneficiaries of the illegal aid.

4.
The sums to be recovered shall bear interest throughout
the period running from the date on which they were first put
at the disposal of the beneficiaries until their actual recovery.

5.
The interest shall be calculated in conformity with the
provisions laid down in Chapter V of Commission Regulation
(EC) No 794/2004 of 21 April 2004 implementing Council
Regulation (EC) No 659/1999 laying down detailed rules for
the application of Article 93 of the EC Treaty.

6. Within a time period of two months from the notification
of the decision, Italy shall enjoin to all beneficiaries from the aid

Article 5

This Decision is addressed to the Republic of Italy.

Done in Brussels, 2 March 2005.

For the Commission

Neelie KROES
Member of the Commission

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ANNEX

Information regarding the implementation of the Commission Decision C(2005)429

1. Total number of beneficiaries and total amount of aid to be recovered

1.1. Please explain in detail how the amount of aid to be recovered from individual beneficiaries will be calculated?

— The principal

— The interests

1.2. What is the total amount of unlawful aid granted under this scheme that is to be recovered (gross aid equivalents;

prices of …):

1.3. What is the total number of beneficiaries from which unlawful aid granted under this scheme is to be recovered:

2. Measures planned and already taken to recover the aid

2.1. Please describe in detail what measures are planned and what measures have already been taken to effect an
immediate and effective recovery of the aid. Please also indicate where relevant the legal basis for the measures
taken/planned.

2.2. By what date will the recovery of the aid be completed?

3. Information by individual beneficiary

Please provide details for each beneficiary from whom unlawful aid granted under the scheme is to be recovered in the
table overleaf.

Identity of the beneficiary

Amount of unlawful aid granted (*)
Currency: …

Amounts reimbursed (°)
Currency: …

(*) Amount of aid put at the disposal of the beneficiary (in gross aid equivalents; in prices of …).
(°) Gross amounts reimbursed (including interests).