ANNOUNCEMENT 08 Dec 2008

In December 2008, the government of Italy announced a change in private-sector financial support.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



the official letter from the European Commission to Italy - Brussels, 28.1.2009 D(2009) 222. Available from < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N621_2008 >


Inception date: 01 Feb 2009 | Removal date: open ended
Still in force

Bailout (capital injection or equity participation)

On 8 December 2008 the Italian authorities notified their intention to grant a rescue aid to Antonio Merloni S.p.A., in Amministrazione Straordinaria ("A.S.").
 
Antonio Merloni S.p.A. is a manufacturing company created in 1989 from the consolidation of AR.DO -a company established by Mr Antonio Merloni in 1968- with ICEM, one of the independent units derived from the split among his descendents of a company founded in 1930 by Aristide Merloni. Antonio Merloni S.p.A. is the parent company of the Antonio Merloni Group which is active in the white goods market segment, i.e. producing and distributing gas tanks, washing machines, driers, dishwashers and fridges for third parties. At the end of September 2009 the Antonio Merloni Group employed 2950 workers.
 
As to the main reasons explaining the difficulties of the company, the Italian government refer to a remarkable decrease in demand in the whole industry and in particular for the Group Antonio Merloni, whose part of the production is also sold to big clients who commercialize it under their own brands. Reference was also made to some macroeconomic factors such as a significant increase in the cost of raw materials.
 
The financial support consists in a guarantee of EUR 68 million on credit lines to be provided by private banks. The Italian authorities undertook that the credits will be granted at an interest rate comparable to those observed for loans to healthy firms, and in any event above the reference rates adopted by the Commission for Italy.
 
The European Commission gave the following assessment:
 
"Firstly, the loan guarantee is selective as it is deemed to favor an individual company, Antonio Merloni S.p.A., parent company of the Antonio Merloni Group. 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, it will provide Antonio Merloni S.p.A. with access to credit lines that -being subject to an insolvency procedure- it would not have been able to obtain otherwise. Under those circumstances, point 4 (2) of the Notice of 11 March 2000 on the application of Articles 87 and 88 of the EC Treaty to State Aid in the form of Guarantees provides the presumption of the existence of an advantage, which has not been rebutted in the present case. Finally, as there is trade in electric and gas appliances like those produced and distributed by Antonio Merloni S.p.A. between Italy and other Member States, 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. 14 of the letter from the EC to Italy - Brussels, 28.1.2009 D(2009) 222).
 
However, the Commission concluded that the notified measure aimed at rescuing Antonio Merloni S.p.A. constitutes an aid within the meaning of Article 87(1), which is compatible with the common market in accordance with Article 87(3)(c) of the EC Treaty in the light of the criteria under the Community guidelines on State aid for rescuing and restructuring firms in difficulty.
 
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.