Brussels, 05/06/2002 (Agence Europe) - The European Commission has closed its investigation of two Italian State aid schemes which favoured public undertakings. The measures providing for income tax exemptions and the possibility to contract reduced-interest loans were considered as State aid, whereas the tax exemptions on the transfer of assets for the transformation of "aziende municipalizzate" into joint stock companies was authorised.
Following a complaint lodged by an Italian association of private water distributors, the Commission learnt in 1997 of a series of measures that had not been notified which the Italian State had granted certain public undertakings. The beneficiary companies were stock companies with majority public shareholders, founded in compliance with the Italian law No.142 (8 June 1990) that gave municipalities the possibility to create joint stock companies in which they would maintain the majority of the shares. According to the legal provisions, these undertakings were entitled to receive loans from Cassa Depositi e Prestiti (CDDPP) which carried an interest rate lower than the market rate. In addition, in 1993 and in 1995, Italy established an income tax exemption for this category of undertaking and also provided for an exemption on all taxes relating to the transfer of assets to joint stock companies created according to Law 142/90. At the Commission's request, the Italian authorities were able to demonstrate that the exemption on all taxes relating to the transfer of assets does not qualify as State aid since it is justified in the light of the logic of the system and does not grant any advantage to the undertakings in question. As to the three-year income tax exemption, however, and the loans granted by the CDDPP, the Commission could not accept Italy's argument by which, at the moment of their entry into force, markets in which stock companies operated were not open to competition. The investigation by the Executive enabled it to verify that at least some of these markets in which these companies operated were actually open to competition and nothing in the schemes made sure that the aid was only applicable to stock companies involved in non-liberalised markets. Nor did the Commission accept the argument by which the measures could be granted as aid to the development of certain economic activities. Considering that this scheme had as effect to strengthen the competitive position of the undertakings concerned in relation to private Italian operators or others, the Commission considered that it was a question of State aid and asked the Italian authorities to recover that amounts corresponding to the aid granted and thus re-establish equal conditions of competition fir all the operators concerned.