Two loans granted to the steel company ILVA S.p.A. by the Italian government in 2015 were illegal under EU state aid law, the European Commission announced on Thursday 21 December (see EUROPE 11551). It has asked Italy to recover this undue advantage of nearly €84 million, not including interest.
This decision has no effect on the implementation of the essential environmental measures to fight pollution in ILVA’s premises at Taranto, the European institution states in a press release. Nor does it influence the process of selling ILVA assets to the ArcelorMittal InvestCo consortium, which is the subject of a separate investigation and for which a decision is to be announced by 4 April 2018 (see EUROPE 11901).
The two measures found to be unlawful, which were granted when insolvency proceedings were launched against the third-largest steel producer in Europe, concern: - the tariff conditions of a state guarantee for a loan of €400 million; - a state loan of €300 million. They were used to cover ILVA’s liquidity requirements for its commercial activities rather than the cost of de-pollution, according to the Commission. And as they were granted on terms that were less than those of the market, they put the company in a more favourable situation than its competitors.
The responsibility to pay back the unlawful aid lies with ILVA and may not be passed on to any future purchaser, as long as there is no economic continuity between ILVA and the entity under the control of new owners. This assessment will be finalised once the merger examination process has been concluded.
The Commission furthermore concluded that three other support measures did not constitute state aid. These concern an envelope of €1.1 billion allocated to resolve serious environmental shortcomings observed in the functioning of the Taranto site. On this matter, there has been an infringement procedure under environmental law underway since 2013.
ILVA’s Taranto site is the largest integrated single-site steelworks in the EU. (Original version in French by Mathieu Bion)