(44) In contrast to Article 87(3)(c), the concept of "coordination of transport" in Article 73 involves more than simply facilitating the development of an industry, it includes some form of planning by the State. In a liberalised market coordination may be achieved by the market itself as the free interplay of market forces is not hampered by market failures. Accordingly, the concept of aid meeting the needs of coordination of transport refers to the need for government intervention in the absence of competitive markets or in the presence of market failures.
(45) According to the Commission's practice, three requirements must be fulfilled for aid to meet the needs of coordination of transport within the meaning of Article 73(9):
(a) if the State's contribution towards the total financing of the project is necessary to enable the project or activity to be carried out in the interest of the Community;
(b) access to the aid is granted on non-discriminatory terms;
(c) the aid does not give rise to a distortion of competition to an extent contrary to the common interest.
Article 86(2)
(46) Where the financing of transport cableways constitutes State aid, it would normally be assessed under Article 73; however, it is possible that the other types of cableway may qualify for exemption under Article 86(2).
(47) In general, cableways used for sporting activities do not provide a service of general economic interest and their financing cannot be justified under Article 86(2). Rather than satisfying the general and basic needs of the population, they aim to earn profits from winter sports. The prices actually paid by users shows that this service is not a basic good.
(48) Certainly, it is in principle for the Member States to define which services they consider to be of general economic interest. However, the notion of general economic interest servers cannot be extended to services that are of a purely commercial nature and do not respond to the general and basic needs of the population for services that are regarded as an essential part of daily life.
(49) These considerations are not invalidated by the fact that the construction and operation of cableways are subject to a concession which requires the firm to operate the installation efficiently and to transport all users at current rates. It is quite usual for a number of occupations and activities to be subject to special authorisations and to certain requirements. In this respect the position of cableway operators does not differ substantially from that of firms in other sectors and does not mean that it should be assessed under Article 86(2).
Transitional period
(50) The Commission considers that State aid to cableways could play an important part in supporting the balanced economic development of the area. As regards mountain regions in particular, State aid has in the past allowed the development of one of the few possible local economic activities, with beneficial effects on employment and, ultimately, on the stability of the local population and care of the land.
(51) However, the provision of services for winter sports has become subject to increasing cross-border competition. This changes the nature of the problems and increases the distortion caused by the existence of aid to the cableway sector. As the sector approaches maturity, there is a greater risk of unbridled competition between different areas of the Community. For these reasons, the Commission's future policy in the sector needs to be more clearly defined, strictly interpreted and uniformly applied.
(52) The Commission recognises that firms in the sector have largely benefited in the past from several forms of economic support from the national, regional and local authorities. Some of these were considered compatible aid under Article 87(3)(c). A change in policy imposing stricter limits on compatibility would probably lead to an adjustment of the price of the various services offered for winter sports, with prices for the use of cableways possibly increasing to compensate for the reduction in subsidies. This change cannot be too abrupt and the rules must be applied gradually.
(53) Accordingly, the Commission identifies a transitional period of five years, from 1 January 2002 to 31 December 2006, during which higher aid intensities would temporarily be accepted for State aid to cableways. Aid granted before the prescribed period will be assessed on a case-by-case basis without reference to compatibility thresholds fixed a priori.
(54) During the transitional period, the Commission will assess aid projects in the cableway sector by referring to the normal set of rules as clarified, inter alia, in the Commission Regulation on State aid to small and medium-sized enterprises, in the guidelines on State aid for rescuing and restructuring firms in difficulty and in the Guidelines on national regional aid(10). However, it will accept a temporary increase in the aid intensity under the existing legislation and guidelines, as quantified below:
(a) 25 additional percentage points for aid granted in 2002;
(b) 20 additional percentage points for aid granted in 2003;
(c) 15 additional percentage points for aid granted in 2004;
(d) 10 additional percentage points for aid granted in 2005;
(e) 5 additional percentage points for aid granted in 2006(11).
From 2007 onwards, aid not eligible for any of the exemptions provided for by the Treaty and in the various regulations and frameworks in force will be declared incompatible. The analysis set out in recitals 19 to 34, and in particular the explanations given in recital 29, will still apply.
(55) On the basis of the information available to the Commission, the figures indicated, chosen as temporary aid top-ups, and the five-year duration of the transitional period seem to reconcile the need to allow sufficient time for different areas to benefit from the temporary rules and for beneficiaries to adjust to the new approach with the need to bring the treatment of this sector into line with that of other economic activities within a reasonable time.
Related activities
(56) Where the cableway infrastructure under consideration is mainly for servicing skiers, the operators can be described as providing a basic service for skiing. It is not unusual for the firm concerned also to offer other directly related services which are equally indispensable for skiing, such as maintenance of ski runs or the supply of artificial snow. Accordingly, the investment eligible for aid under the conditions described above can also include, for example, the purchase of snow cannons or maintenance vehicles as well as the initial costs of preparing the ski run. However, investment that is not essential to providing the basic installation service, such as investment in skiing equipment for hire or in facilities for ski schools, cannot be eligible for aid under the abovementioned conditions.
VI. COMPARISON WITH THE MEASURES INTRODUCED BY LAW No 2/1991
(57) Law No 6/1996 allows aid to cableways in the Autonomous Province of Bolzano of up to 90 % of the investment cost. It amends the previous Provincial Law No 2/1991, which provided for an aid intensity of up to 33 % of the project costs.
(58) Article 1(1) of Law No 2/1991, notified to the Commission and approved by it by letter of 4 June 1991, provides for aid with the following maximum intensities:
(a) 33 % for bicable ropeways, which are of special social importance as they link villages;
(b) 15 % for funiculars, bicable and monocable ropeways as well as ticket vending and reading machines;
(c) one-off payments of up to 30 % to build and improve the quality of drag lifts;
(d) one-off payments of up to ITL 200 million for the reconditioning of cableways.
The Bolzano provincial authorities claim that Law No 2/1991, examined and authorised by the Commission (NN 45/91), replaces and continues Law No 6/1996, which, according to them simply renews and consolidates the provincial rules. The Commission does not agree with this reasoning. A comparison of the two aid schemes shows that the new law considerably modifies the old one by allowing for investment aid of up to 90 %, whereas the old scheme provided for an aid intensity of only up to 33 % of costs. Furthermore, there are some aspects of the new law that are clearly new in substance. To give one example, Article 1(2)(d) of Law No 6/1996 refers to single ski lifts, which fulfil a social and educational purpose and are granted investment aid of 50 %. No mention was made under Law No 2/1991 of this particular type of installation. The Commission therefore concludes that there can be no doubt that Law No 6/1996 is a new aid scheme. In any event, as the Commission decision of 4 June 1991 approving Law No 2/1991 was valid only for the period 1990 to 1993, the new law should in any event have been notified to the Commission.
VII. ASSESSMENT OF THE MEASURES INTRODUCED BY PROVINCIAL LAW No 6/1996
(59) By letter of 24 May 2001 the authorities of the Autonomous Province of Bolzano provided a list of 77 installations in the province that had already benefited from the measures. They also classified the cableways into three categories, transport, local or tourism facilities. There are 12 cableways having a general transport purpose (category A), 56 cableways for purely local recreational use (category B) and 9 cableways used for sporting activities in tourist areas (category C). All of these are small enterprises within the meaning of Regulation (EC) No 70/2001. This classification, however, was carried out ex post as an illustration, whereas Law No 6/1996 does not make any distinction between different categories of cableway.
(60) As regards the future application of the scheme, the Commission considers it compatible with the common market until 2007, inasmuch as it is consistent with the terms of this Decision, in particular recitals 33, 34 and 54 of part V. It also takes note of the commitment to re-notify the scheme in 2006.
(61) The Commission, however, also needs to assess the application of the scheme to the 77 individual recipients referred to in recital 59. The information provided by the Italian authorities is sufficient for the Commission to endorse the submitted threefold classification of cableways. Accordingly, both on the question of the presence of aid and on the question of compatibility, the Commission's assessment of State aid for the installations varies according to the recipient, as stated in Part V of this decision.
(62) The measures are funded from the State budget, i.e. through State resources. They represent an economic advantage for the recipient, relieving it of part of the cost linked to the investment needed for its activity.
(63) As regards the distortion of competition and the effect on trade between Member States, the cableways catering for the general transport needs of the population operate in a sector where cross-border trade is present. Among the recipients classified by the Italian authorities as transport installations, some are located in areas where alternative transport would not only be technically and economically viable but could also be managed by commercial operators from other Member States. Accordingly, State aid to cableways classified as transport installations can distort or threaten to distort competition and affect trade between Member States.
(64) Similarly, State aid for cableways in tourist areas that are capable of attracting users who have as alternatives foreign installations distorts competition and affects trade between Member States.
(65) Finally, the cableways described as sporting installations for purely local use are located in areas with little or no tourism capacity and a limited number for winter sports facilities. Users would mainly be residents and would not normally have, as alternatives, destinations in another Member State. Given the small number of users, the service would not be provided in the absence of State aid. In the last case, therefore, it can be concluded that State financing does not distort competition or affect trade between Member States and therefore does not constitute State aid within the meaning of Article 87(1).
(66) On the basis of the foregoing considerations, the Commission assesses the compatibility of the aid granted under Law No 6/1996 in the case of the 12 cableways catering for the general transport needs of the population (classified as category A by the provincial authorities) and the nine cableways used for winter sporting activities in tourist resorts (classified as category C by the provincial authorities). On the basis of the information supplied by Italy, however, the Commission does not regard the State support to 56 installations identified as being for local use (category B) as State aid under Article 87(1).
General transport cableways (category A)
(67) According to the information provided by the Italian authorities, the first category of cableways (category A) operates only as a link between population centres. Some of them are the only means of transport connecting mountain communities with the other inhabited areas in the Province and their social and infrastructure function is obvious.
(68) It is generally acknowledged that the funding of a transport installation which, for economic or technical reasons, has no viable alternative does not distort competition and therefore does not constitute aid under Article 87(1). However, the Commission considers that Law No 6/1996 also provides financing to installations in respect of which there would be other means of transport, at least as an alternative. For these reasons (recital 63), it must decide whether the measures are compatible with the Treaty.
(69) In any event, in the case of cableways intended predominantly to satisfy the general transport needs of the population, the Commission considers that State aid may be needed since market forces are unlikely to provide the necessary investments on a purely commercial basis. Aid to this sector must therefore be assessed under Article 73.
(70) The development of measures to shift traffic from roads to other modes of transport is deemed to be in the interest of the Community and the amounts granted are necessary to enable the project to be carried out. It is also considered that aid to such installations does not distort competition to an extent contrary to the common interest.
(71) The Commission therefore concludes, on the basis of the information from the Italian authorities, that the conditions for exemption under Article 73 are met and that the aid granted to operators of twelve category A cableways is compatible with the State aid rules of the Treaty. It also takes note of the commitment to re-notify the scheme in 2006.
Cableways for sporting activities (category C)
(72) According to the information provided by the Italian authorities, the third category (C) comprises all cableways used for sporting activities in tourist areas. As indicated in recital 64, their funding is caught by the State aid rules of the EC Treaty. Accordingly, it must be decided whether one of the exemptions in Article 87(2) and (3) applies in order to find the aid in question compatible with the common market.
(73) The aid granted via the measures introduced by Law No 6/1996 is not social in nature, is not granted to individual consumers and is not aid to make good the damage caused by natural disasters or exceptional occurrences. It is not aid granted to the economy of certain areas of the Federal Republic of Germany affected by the division of Germany. Hence Article 87(2) is not applicable.
(74) Since the aid promotes neither the economic development of areas where the standard of living is abnormally low or where there is serious underemployment nor the execution of an important project of common European interest, Article 87(3)(a) and (b) does not apply.
(75) As for the compatibility of the measures under Article 87(3)(c) in relation to the development of certain economic activities, the conditions for applying the Community guidelines on State aid for rescuing and restructuring firms in difficulty(12) are not met. The aid was not notified individually to the Commission and no restructuring plan was submitted to it. The installations that benefit from the aid are not necessarily in difficulty nor is the aid intended to restore the firms' long-term economic and financial viability. The guidelines require that measures must be taken to mitigate as far as possible any adverse effects of the aid on competitors, something which is not provided for by Law No 6/1996.
(76) The Italian authorities, however, point out that all recipients in this category are small enterprises entitled to receive aid up to the intensity accepted under the Commission Regulation on aid to small and medium-sized enterprises(13). This amounts to a gross aid intensity of 15 % for investment in tangible and intangible assets, as defined by Article 2(c) and (d) of the Regulation.
(77) If the figure of 15 % obtained in this way is added to the temporary increase in the aid intensity described in recital 54 (top-up), which for 2002 amounts to 25 percentage points, the accepted gross intensity would be 40 %. The Commission considers that this intensity can also be accepted for aid granted before 2002.
(78) Since, according to the information provided by the Italian authorities, the maximum amount granted in category C has been 30 %, which is well below the authorised ceilings, the Commission concludes that the aid granted to operators of cableways used for sporting activities in tourist resorts is compatible with the State aid rules of the EC Treaty. It also takes note of the commitment to re-notify the scheme in 2006.
VIII. CONCLUSION
(79) The Commission concludes, on the basis of both the foregoing considerations and the information provided by the Italian authorities, that the measures already granted to 77 cableway operators under Law No 6/1996:
(a) do not constitute State aid because of their local nature, inasmuch as the scheme is applied to firms in category B, as defined in recital 65;
(b) constitute State aid that is compatible under Article 73 of the EC Treaty, inasmuch as the scheme is applicable to firms in category A, as defined in recital 63;
(c) constitute State aid that is compatible under Article 87(3)(c) of the EC Treaty, inasmuch as the scheme applies to firms in category C, as defined in recital 64.
(80) As regards the future application of the scheme, the Commission considers that:
(a) the scheme does not constitute State aid where it is applied to firms in category B, as defined in recital 65;
(b) the scheme constitutes State aid that is compatible under Article 73 where it is applied to firms in category A, as defined in recital 63;
(c) the scheme constitutes State aid compatible under Article 87(3)(c) where it is applied to firms in category C, as defined in recital 64.
The preceding paragraph is applicable until 2007, in accordance with the considerations set out in this Decision, in particular recitals 33, 34 and 54 of Part V. The Commission also takes note of the commitment to re-notify the scheme in 2006.
(81) This Decision is without prejudice to the application of other relevant Community legislation, in particular Directive 2000/9/EC of the European Parliament and of the Council of 20 March 2000 relating to cableway installations designed to carry persons(14),
HAS ADOPTED THIS DECISION:
