ANNOUNCEMENT 01 Oct 2009In October 2009, the government of Italy announced a change to private-sector financial support.
NUMBER OF INTERVENTIONS
the letter from the EC to Italy - Brussels, 26.10.2009 C(2009)8406. Available from : < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N542_2009 >
On 6 October 2009, Italy notified the above mentioned aid measure.
Italy stated that the financial crisis is affecting its whole economy at local, regional and national level.
The Italian automotive sector (including the car and car component manufacturers) accounts for around 6.2% of the national GNP according to the data provided by the Italian authorities. This is the first sector of the Italian economy in terms of workforce. In particular, the car component manufacturers, which will be the direct beneficiaries of the present scheme, according to the Italian authorities, directly employ more than 170 000 people; they also indirectly provide activity to retailers and providers of aftermarket services.
On the basis of the foregoing, the Italian authorities have decided to adopt the present scheme in order to remedy a serious disturbance in the Italian economy. The scheme is explicitly based on Article 87(3)(b) EC Treaty, and relies on the Commission Communication 'Temporary Framework for State aid measures to support access to finance in the current financial and economic crisis' ('the Temporary Framework').
The aid will be granted in the form of interest rate subsidy for investment loans for production of green products. The scheme applies to companies of all sizes: both SMEs and large firms. Its geographic scope covers the whole territory of Italy. According to the Italian authorities' estimates, the number of potential beneficiaries exceeds 1000 undertakings.
The overall budget to finance the measures contained therein is Euro 300 million.
The Commission found that the notified measure constitutes state aid within the meaning of Article 87 (1) of the EC Treaty and gave the following assessment:
" State resources are involved in the notified scheme since the aid is granted from State resources, via the respective aid granting authorities at national level. The measure is selective since it will be granted only to certain firms. The measure conveys an advantage to beneficiaries by granting them investment loans with subsidised interest rates which would probably not be available on the market in the absence of the notified measure. Consequently, the aid will strengthen the financial position of beneficiaries in relation to their competitors in the Community and therefore will have potentially distorting effects on competition. The measure affects trade between Member States since the scheme is not limited to beneficiaries which are active in sectors where no intra-community trade exists." (par. 32-34 of the letter from the EC to Italy- Brussels, 26.10.2009 C(2009)8406)
Article 87(3)(b) of the EC Treaty enables the Commission to declare aid compatible with the Common Market if it is "to remedy a serious disturbance in the economy of a Member State." This aid has to be applied restrictively and must tackle a disturbance in the entire economy of the Member State according to the interpretation of the Article 87(3)(b) by the Court of First Instance.
The Commission referred to its Communication on the financial crisis (Temporary Framework) and concluded that the Measure complies with the conditions laid therein. Therefore, despite the measure constituting State aid pursuant to the Article 87(1) EC, it is compatible with the Common Market according to the Article 87(3)(b) EC Treaty. The Commission raises no objections against the measure at issue and authorizes it as emergency intervention in the face of the current financial crisis. (par. 36-43 of the letter).
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.