Brussels, 11/05/2012 (Agence Europe) - Italian law, which requires private companies wishing to be entitled to collect local taxes to have a fully paid up share capital of €10 million, amounts to a restriction on freedom of establishment and freedom to provide services that is disproportionate with the objective of protecting public authorities against possible non-performance by the concession holder.
That, in substance, is the ruling handed down by the Court of Justice of the EU on Thursday 10 May (joined cases C-357/10 to 359/10) in response to the tribunale amministrativo regionale per la Lombardia (Regional Administrative Court, Lombardy) which sought clarification on the compatibility of the Italian legislation with European Union law and, in particular, with the rules on freedom to provide services and freedom of establishment. The Italian court is hearing a series of cases brought by private companies which, in line with the legislation (Legislative Decree No 446 of 15 December 1997), submitted tenders for the award of concessions but were excluded from the procedure because they did not have the share capital of €10 million, a condition to which companies in which a majority of the share capital is in public ownership are not subject.
In its ruling, the Court says that the requirement for a minimum capital level and for private operators to incorporate amounts to a restriction on freedom of establishment and freedom to provide services that can be justified only by “overriding reasons in the public interest”. It says the only grounds for justification raised before the Court - the need to protect public authorities against possible non-performance by the concession holder, in the light of the high overall value of the contracts which have been awarded to it - may be considered legitimate from this point of view. However, the restriction appears to be disproportionate with the objective pursued since, according to the Italian court itself, other measures could provide adequate protection for public authorities, for example, inter alia, the application of minimum thresholds for share capital that vary depending on the value of the contracts actually awarded to the concession holder. Consequently, the Court finds that, as the Italian provision goes beyond the objective of protecting the public authorities against non-performance by concession holders, it contains disproportionate, and therefore unjustified, restrictions of the fundamental freedoms. (FG/transl.rt)