ANNOUNCEMENT 02 Mar 2010In March 2010, the government of Italy announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
the letter from the EC to Italy - Brussels, 25.03.2010 C(2010)2084) - http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N77_2010
By letter dated 2 March 2010, registered the same day, the Italian authorities notified, in line with Article 108 (3) of the Treaty on the Functioning of the European Union (hereinafter "TFEU") their intention to grant a rescue aid to Vinyls Italia S.p.A. in amministrazione straordinaria.
Vinyls Italia S.p.A. (hereinafter "Vinyls" or the "Company"), created in 1984, is active in the production of PolyVinyl Chloride (hereinafter "PVC"), a plastic material widely used in several industrial and commercial sectors, as well as Vinyl Chloride Monomer (VCM), mainly used to create polymers.
The envisaged financial support consists of a State guarantee on credit lines to be provided by private banks for the amount of EUR 31.5 million.
The Commission concluded that the measure contains state aid and gave the following assessment:
"Firstly, the measure at stake consists of a guarantee which is selective as it is deemed to favour a single company, Vinyls. Secondly, the measure will be financed by reserves accumulated in the general budget of Italy, and thus undoubtedly by a Member State and through State resources. Thirdly, the guarantee will provide the Company with access to credit lines that -being subject to a collective insolvency procedure- it would not have been able to obtain at comparable conditions. Under those circumstances, in accordance with points 3 (2) and 4 (1) (a) of the Notice of 20 June 2008 on the application of Articles 87 and 88 of the EC Treaty to State Aid in the form of Guarantees, the guarantee must be considered to confer an advantage. Finally, as there is worldwide trade in PVC and VCM, the measure is apt to improve the position of the recipient in relation to its competitors in Italy and the EU, and it consequently distorts competition and affects trade between Member States." (par. 12 of the letter from the EC to Italy - Brussels, 25.03.2010 C(2010)2084).
Article 107(3)(b) TFEU 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 107 (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 107 (1) TFEU, it is compatible with the internal market according to the Article 107 (3)(b) TFEU. 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. 14-26 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.