Brussels, 20/01/2016 (Agence Europe) - On Wednesday 20 January, the European commission openedan in-depth investigation into support measures for a total of €2 billion allegedly granted by Italy to the steel producer Ilva, Europe's third-largest producer.
The Ilva steel plant, which is located in the region of Taranto, is the largest steel plant in the EU. “The Commission has received a number of complaints from competitors alleging that Italy is providing restructuring aid that would allow Ilva to modernise its plant with public money to reach full capacity”, the European Commissioner for Competition, Margrethe Vestager, explained.
Given the overcapacity problems of the steel sector in the EU, rules on state aid authorise only measures to promote the competitiveness and efficiency of steel production in the long term, rather than rescue and restructuring aid to steel companies in difficulties.
If the allegations of State aid aiming to keep Ilva afloat artificially are confirmed, this could bring about a significant competition distortion, given the considerable production capacity of the steel plant, the Commission notes. At full capacity, the Taranto plant could produce as much as Bulgaria, Greece, Hungary, Croatia, Slovenia, Romania and Luxembourg produced in 2015 between them.
In total, the measures in question represent around €2 billion in financing, potentially benefiting from State support. They include public loan guarantees, a law giving loans granted to Ilva an absolute payment priority in the event of bankruptcy, including over debt to public entities, a law allowing Ilva access to funds seized during ongoing criminal proceedings against its shareholders and former management, before those proceedings have established who owns these funds and, finally, the settlement by payments to Ilva of a long-standing dispute between the company and State-owned Fintecna.
The Commissioner went on to explain that since 2013, the Commission has been urging Italy to “ensure that the Taranto plant complies with EU legislation on industrial emissions”. The plant has a long history of failing to meet these standards, according to the Commissioner.
“Today's decision also gives clarity to Italy that it can support the clean-up of the serious pollution problems at the Taranto site, as long as the money is subsequently recovered from the polluter”, Vestager said.
The opening of an in-depth investigation by no means prejudges the outcome of the procedure. (Original version in French by Elodie Lamer)