Brussels, 09/06/2011 (Agence Europe) - State aid in the form of reductions in social security contributions granted by Italy between 1995 and 1997 to companies in Venice and Chioggia are unlawful and must be recovered, the Court of Justice of the EU ruled on Thursday 9 June. It rejected the appeals by the Comitato “Venezia vuole vivere”, Hotel Cipriani, Italgas and Coopservice against the 2008 General Court judgement which upheld the European Commission's 1999 decision which declared this aid to be illegal and ordered recovery.
The regime at issue had extended to companies in the regions of Venice and Chioggia the aid schemes that had been granted to Mezzogiorno companies since 1978: in exchange for creating jobs, employers would receive reductions in or exemption from social security contributions. In 2007, the Commission referred the matter to the General Court, demanding once again that Italy recover the aid with interest. Fifty-nine companies appealed against the Commission decision and the General Court selected four pilot cases from among the 37 that were deemed admissible. It rejected the appeals of these companies as unfounded (see above). These companies then took their appeal to the Court of Justice.
The Court said firstly that the General Court had been correct to rule the appeals of the four companies admissible (contrary to what the Commission claimed), since the appellants were “individually concerned” by the Commission's decision of 2007. However, the allegedly compensatory character of the advantages granted (in relation to the disadvantageous situation of undertakings established in Venice) did not allow their classification as “aid”, the illegal nature of which had been well established by the Commission, to be set aside.
Furthermore, the Court said, the General Court rightly took the view that that the Commission had complied with procedural obligations, restricting consideration to the general characteristics of the aid scheme without being required to consider each particular case. The Commission is required only to examine whether the aid “is capable of affecting” trade between member states and distorting competition and “not to establish the existence of an actual impact of the aid on such trade and an actual distortion of competition”. Moreover, the General Court rightly found that the small amount of the reductions in social security contributions and the fact that most of the beneficiaries carried on their activities at a local level did not exclude the possibility of those reductions being capable of affecting trade between member states and leading to a distortion of competition. The General Court, therefore, did not err in law by finding that the Commission was right to call for the recovery of the unlawful aid, as this illegality had been shown. (F.G./transl.rt)