Brussels, 08/04/2005 (Agence Europe) - The Commission has ruled that the Italian aid regime to cover the risk in loans used for the building and conversion of ships in Italian shipyards constitutes illegal State aid. Commissioner Neelie Kroes said in a press release that “if it had been implemented, this regime of guarantees would have brought about considerable negative effects for rival European shipyards, because it does not require sufficiently high collateral and does not provide correction risk differentiation”.
Further to its investigations, the Commission concluded that the Italian public regime set up in 2004 and creating a guarantee fund featured State aid which did not fulfil the conditions laid out in the Commission's communication on guarantees (EUROPE 8453). These guarantees could be granted by banks to Italian or foreign shipbuilders for work carried out in Italian shipyards, to the tune of 40% of the sum total of the loan and against a set amount of collateral. The collateral paid by the beneficiaries, of 2.5% of the sum guaranteed for twelve-year loans, was in breach of market laws and was insufficient to cover all costs involved in this regime, in the Commission's view. The Commission adds that it would have been applied to all users irrespective of the insured risk. In 2003, the Commission authorises a similar aid regime for German shipyards, because the collateral in that case was deemed sufficient, and divided into six different categories.