EU Commission refers Italy to court for failure to recover incompatible aid

[News_Editor]

EU Commission refers Italy to court for failure to recover incompatible aid

2011-03-23 21:18:46 GMT+7 (ICT)

BRUSSELS (BNO NEWS) -- The European Union (EU) on Wednesday announced that its Commission has decided to refer Italy to the European Court of Justice (ECJ) for not complying with a November 19, 2009 decision that found that Alcoa Trasformazioni had received unlawful state aid and needed to repay it to the Italian authorities.

On November 19, 2009, the Commission found that Italy needed to partially recover a subsidy granted to Alcoa in the form of a preferential electricity tariff for its two Italian aluminum smelters (Sardinia and Veneto), because the tariff provided an unfair advantage to Alcoa over its competitors.

The amount to be recovered is approximately €295 million ($417 million), and to date, Italy has not recovered the aid.

Italy was under an obligation to immediately and effectively implement the Commission decision. In particular, Italy was required to recover the full amount of aid granted to the smelter in Veneto since 2006, whereas recovery from the Sardinian smelter was limited to aid received from January 2006 until January 2007.

Although Alcoa lodged an appeal against the Commission's 2009 decision and asked for interim measures, this does not dispense Italy from its obligation to recover the aid. In July 2010, the General Court dismissed Alcoa's action for interim measures, but Alcoa has appealed.

"To remedy the distortion of competition caused by an unlawful state subsidy, it is extremely important that the aid is recovered from the beneficiaries without delay," said Commission Vice President in charge of competition policy Joaquín Almunia.

Member States have to recover state aid that has been found by the Commission to be incompatible with EU rules, within the deadline set out in the Commission decision. This is very important because delays in the recovery of unlawful subsidies maintain the distortion of competition created by the aid.

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