Brussels, 31/03/2004 (Agence Europe) - On Tuesday, the European Commission said the Italian scheme providing grants and certain reductions in social security contributions cannot be justified under the State aid rules. The Italian scheme granted these benefits to undertakings acquiring a large undertaking in difficulty. Italy is now obliged to recover any aid unlawfully awarded from its beneficiaries.
The scheme in question aims at safeguarding jobs in large undertakings in difficulty that are subject to a specific Italian insolvency proceeding (amministrazione straordinaria) and have more than 1,000 employees. If such undertakings are sold, incentives are given to the purchaser who agrees to continue to employ up to 550 of the former company's employees. After an in-depth probe launched in October 2002, the Commission concludes that the scheme cannot be approved under any of the existing EU State aid framework rules such as the Commission Regulation on aid in favour of employment or the Community guidelines for rescuing and restructuring firms in difficulties. The Commission above all considers that the scheme applies to large undertakings active on the entire national territory while, under the employment regulation, State aid outside assisted areas is only allowed in favour of small and medium enterprises. For similar reasons, it believes, the scheme does not meet the conditions of the rescue and restructuring guidelines, which allow for aid "schemes" only in favour of small and medium enterprises. Italy is therefore ordered to recover any aid already granted under the scheme.