2000/394/EC: Commission Decision of 25 November 1999 on aid to firms in Venice and Chioggia by way of relief from social security contributions under Laws Nos 30/1997 and 206/1995 (notified under document number C(1999) 4268) (Text with EEA relevance) (Only the Italian text is authentic)

• Articles: 7

Article 1

Except as provided by Articles 3 and 4 of this Decision, the aid which Italy has put into effect in favour of firms located in Venice and Chioggia, in the form of exemption from social security contributions provided for by Laws No 30/1997 and No 206/1995 which refer to Article 2 of the Ministerial Decree of 5 August 1994, is compatible with the common market where it is granted to the following firms:

(a) SMEs within the meaning of the Community guidelines on State aid for small and medium-sized enterprises;

(b) firms that do not comply with that definition but are located in an area eligible for exemption under Article 97(3)(c) of the Treaty;

(c) any other type of firm which hires groups of workers experiencing particular difficulties entering or re-entering the labour market as referred to in the Community guidelines on aid to employment.

Such aid is incompatible with the common market where it is granted to firms which are not SMEs and are located outside areas eligible for exemption under Article 87(3)(c) of the Treaty.

Article 2

Except as provided by Article 3 and 4 of this Decision, the aid which Italy has put into effect in favour of firms located in Venice and Chioggia, in the form of reductions in social security contributions provided for by Article 1 of the Ministerial Decree of 5 August 1994, is incompatible with the common market.

Article 3

The aid measures which Italy has put into effect in four of the companies ASPIV and Consorzio Venezia Nuova are compatible with the common market since they qualify for exemption under Article 86(2) and Article 87(3)(d) of the Treaty respectively.

Article 4

The measures which Italy has put into effect in favour of the companies ACTV, Panfido SpA and AMAV do not constitute aid within the meaning of Article 97 of the Treaty.

Article 5

Italy shall take whatever steps are necessary to recover from the beneficiaries the incompatible aid referred to in the second paragraph of Article 1 and in Article 2 which has unlawfully been made available to them.

Repayment shall be made in accordance with the procedures of Italian law. The amounts to be repaid shall bear interest from the date on which the aid was made available to the beneficiaries until the date on which it is effectively repaid. The interest shall be calculated on the basis of the reference rate used to calculate the grant equivalent of regional aid.

Article 6

Italy shall inform the Commission, within two months of the date of notification of this Decision, of the measures it has taken to comply with it.

Article 7

This Decision is addressed to the Italian Republic.

Done at Brussels, 25 November 1999.

For the Commission

Mario Monti

Member of the Commission

(1) OJ L 83, 27.3.1999, p. 1.

(2) OJ C 51, 18.2.1998, p. 9.

(3) OJ L 265, 8.11.1995, p. 23.

(4) See point 1 of the Commission communication on the method for the application of Article 92(3)(a) and (c) to regional aid (OJ C 212, 12.8.1988, p. 2), now replaced by the guidelines on national regional aid (OJ C 74, 10.3.1988, p. 9).

(5) According to the COSES study, the impact of the relief from social security contributions is equivalent to 2,9 % of turnover, while the impact of the additional costs is the equivalent of 9,5 %.

(6) The Committee lists the following additional costs:

(a) logistical and structural costs, including the higher maintenance costs and the expense of adapting the buildings, costs resulting from the need to use warehouses which need to be higher to combat the effects of humidity and tides, higher prices for purchasing or renting property and additional costs as a consequence of architectural limitations and scenic and safety restrictions;

(b) operational disadvantages, including the need for transhipments when transporting stocks and goods, the higher cost of goods and services, which is in part a consequence of relatively static tourist demand notwithstanding price increases;

(c) higher personnel costs owing to the emoluments paid to employees who agree to work in Venice;

(d) commercial disadvantages caused by out-migration and the gradual ageing of the population of Venice, which make it more difficult to have contact with customers and sell products;

(e) weather-related disadvantages (seasonal flooding, fog and tides).

(7) The Italian authorities referred to the "neutral" nature of the measures and cited the case of aid granted to the textile, clothing and leather/footwear industry by France in the form of reductions in social security contributions in connection with reorganising working hours (OJ C 357, 26.11.1996, p. 5).

(8) Case 296/82 Netherlands and Leuwarder v. Commission [1985] ECR 809.

(9) OJ C 146, 14.5.1997, p. 6.

(10) OJ C 364, 20.12.1994, p. 8.

(11) Case T-106/95 Fédération francaise des sociétés d'assurances v. Commission [1997] ECR II-229.

(12) Commission notice on the de minimis rule for State aid, OJ C 68, 6.3.1996, p. 9.

(13) Joined Cases C-324/490 and C-342/90 Germany and Pleuger Worthington v. Commission [1994] ECR I-1173.

(14) Case C-102/87 SEB v. Commission [1988] ECR I-4067.

(15) Case 173/74 Italy v. Commission [1974] ECR 709.

(16) Case 102/87 France v. Commission [1988] ECR 4067.

(17) Case 248/84 Germany v. Commission [1987] ECR 4013.

(18) Case T-214/95 Het Vlaamse Gewest v. Commission [1998] ECR II-0717.

(19) OJ L 185, 15.7.1988, p. 9, repealed as of 1 January 2000 by Council Regulation (EC) No 1260/99 (OJ L 161, 26.6.1999, p. 1).

(20) OJ C 334, 12.12.1995, p. 4.

(21) See the Commission decision notified to the Italian Government by letter dated 30 June 1997, concerning, inter alia, the list of areas eligible for regional aid.

(22) OJ C 368, 23.12.1994, p. 12.

(23) See footnote 4.

(24) See footnote 9.

(25) The conditions for the application of the guidelines in question stipulate, inter alia, that the deprived urban area must have a population of between 10000 and 30000 and belong to a city or urban agglomeration with at least 100000 inhabitants. Although the Municipality of Venice had a population of 293727 in 1997, the historic centre of the city had 68600 inhabitants and the islands 45382. These population figures do not allow the guidelines in question to be applied to the area under examination. As far as eligible firms are concerned, the guidelines refer only to small enterprises in accordance with the Community definition. An Annex to guidelines also lists the eligible sectors.

(26) See footnote 10.

(27) Although they qualified for Structural Fund assistance under Objective 1, the two regions concerned (Abruzzi and Molise) were no longer eligible for exemption under Article 87(3)(a) since their per capita GDP expressed as a percentage of the Community average (89,85 % for Abruzzi and 78,97 % for Molise) greatly exceeded the threshold for eligibility for exemption under Article 87(3)(a), set at 75 %.

(28) OJ L 145, 17.6.1993, p. 25.

(29) OJ C 213, 19.8.1992, p. 2.

(30) These burdens are furthermore not linked per se to the island status as such of the lagoon and therefore do not constitute structural handicaps of the islands which any guidelines drawn up on the basis of the new Declaration No 30 introduced by the Amsterdam Treaty could take into account.

(31) Case 70/72 Commission v. Germany [1973] ECR 813.

(32) Case C-142/87 Belgium v. Commission [1990] ECR I-959.

(33) See footnote 12.

(34) See Commission communication in OJ C 318, 24.11.1983, p. 3.