91999E2517

WRITTEN QUESTION E-2517/99

by Adriana Poli Bortone (UEN) to the Commission

(22 December 1999)

Subject: The Sviluppo Italia company and breaches of Community rules

The Sviluppo Italia company was set up by a legislative decree of the Italian Government (1/99) to provide assistance to depressed areas of the Mezzogiorno region.

In addition to resources from the revolving fund set up by law 208/99, its original capital stock is also made up of Community funds and its relations with the public authorities are governed by special agreements not subject to public accounting procedures.

Does the Commission not consider that this situation is incompatible with Community law on competition, use of Community funds and state aids, particularly in the light of the considerations set out below?

1. Public funds of Community origin intended to finance business promotion programmes in depressed areas are being used to provide start-up (risk) capital and liquidity flows (finance) for a single (joint stock) company formally belonging to the private sector and not subject to government control. These funds could be used for purposes other than those stipulated with little real prospect of doing anything to assist the local situation they were originally intended to alleviate.

2. Given the vagueness of the role assigned to the Sviluppo Italia company and the impossibility of separating its accounts for activities undertaken in the public interest and its business activities, the company enjoys a dominant position on the market for development services and financial services, while being able to evade public accounting procedures, giving it a privileged position as sole partner, to the detriment of new or existing businesses in the sector.

3. The Sviluppo Italia company has the legal personality of a private firm and thus the capacity to evade the securities and guarantees required of a company subject to public law as regard the organisation and performance of its activities (parliamentary control, auditing, public accounting procedures and recruitment by competitive examination).

Answer given by Mr Monti on behalf of the Commission

(14 February 2000)

Member States are competent to manage resources deriving from structural funds. Therefore, the choice to merge all the State's holdings in a single company, constituted as a joint stock company, is not relevant under Community state aid rules. Article 222 (ex Article 166) of the EC Treaty does not prejudice the rules in Member States governing the system of property ownership. Accordingly the creation, by a Member State, of a holding in the form of joint stock company operating on the market does not constitute, per se, an infringement of Community competition rules.

In any case, the commercial activities performed by Sviluppo Italia will be subject to the Community rules on competition and on structural funds.

The Commission is not informed as to the involvement of state aid elements in favour of Sviluppo Italia. If information should come to the attention of the Commission, it will examine it and take a decision in this respect.