ANNOUNCEMENT 21 Oct 2015

In October 2015, the Italian government notified the European Commission of granting the Italian steelmaker Ilva financial support following the company entering into insolvency proceedings. In December 2017, the European Commission concluded that the state aid granted is illegal and requested the Italian authorities to recover the undue benefit.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



EC press release
http://europa.eu/rapid/press-release_IP-16-115_en.htm

Letter from the EC to Italy, 20.01.2016
http://ec.europa.eu/competition/state_aid/cases/262365/262365_1735692_56_2.pdf

Secondary Source
http://www.bbc.com/news/business-34392379


European Commission, Press release of 21 December 2017, State aid: Commission concludes in-depth investigation on support to Italy's largest steelmaker ILVA S.p.A. in A.S. and orders recovery on two measures that involved illegal State aid: http://europa.eu/rapid/press-release_IP-17-5401_en.htm
Commission Decision of 21 December 2017, On the state aid and the measures SA.38613 (2016/C) (ex 2015/NN) implemented by Italy for Ilva S.p.A. in Amministrazione Straordinaria, pubslihed on 22 February 2018: http://ec.europa.eu/competition/state_aid/cases/262365/262365_1966498_473_2.pdf
State Aid Cases, SA.38613 Aid to Ilva: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38613

Inception date: 21 Oct 2015 | Removal date: 21 Dec 2017
Still in force

Capital injection and equity stakes (including bailouts)

On 20 January 2016, the European Commission announced in a press release that it had initiated an investigation into the state aid provided by Italy to its bankrupt steel producer Ilva in Taranto, where the EU's largest steel plant is located.

The decision comes after several European institutions, including the industry body UK Steel, launched a complaint with the Commission. Inter alia, they accused Italy of handing the company 100 million EUR for environmental modifications, which are allegedly meant to keep the site operational.

Ilva has been in turmoil since May 2013 after facing criminal investigation over environmental damages and has been managed by a state-appointed Extraordinary Commissioner since then. The company has been declared insolvent on 31 January 2015.

On 21 October 2015, the Italian government notified the EC of a measure which would allow the Extraordinary Commissioner to take loans for the company of up to 800 million EUR, which will be state guaranteed. The government also decided to provide urgent aid of 300 million EUR in December 2015. According to EC's press release, the total state aid amounts to 2 billion EUR.

On 21 December 2017, the European Commission issued its decision following the conclusion of its investigation concerning support measures granted to ILVA S.p.A. The investigation concluded that the loans and state guarantee granted by the Italian authorities in 2015 to support the steelmaker are illegal state aid. As such, the Commission has requested Italy to recover the state aid granted to Ilva having a total value of EUR 84 million. The amount corresponds to "the difference between the terms of the loan and guarantee in favour of ILVA and appropriate market terms". Additionally, the existing loans and guarantee granted to Ilva must be adjusted to correspond to market terms. The decision was published on 28 February 2018.

In this context, Commissioner Margrethe Vestager stated in a press release: "The best guarantee for a sustainable future of steel production in the Taranto region is the sale of ILVA's assets at market terms – it cannot rely on artificial State support. Our investigation found that two public measures gave ILVA an undue advantage to finance its current operations. This does not change the fact that, in the right hands, ILVA has a sustainable future. As the sales process run by the Italian government showed, there were several potential bidders ready to invest in ILVA's future and upgrade the site in line with environmental standards."

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.

AFFECTED SECTORS