WRITTEN QUESTION P-1645/02

by Roberta Angelilli (UEN) to the Commission

(4 June 2002)

Subject: Casino de la Vallée, Saint-Vincent (Italy)

The Casino de la Vallée, in Saint-Vincent (Autonomous Region of the Valle d'Aosta, Italy), is one of the main gambling houses in Europe and the second most important in Italy. It is run by a special management arrangement established by the regional law of 21 December 1993 and replacing the previous private management. The Region, which plays a dominant role in the casino's management (appointment of senior executives, as well as control and supervision), has systematically provided the establishment with funding by means of laws and measures passed by the Regional Government. The amounts provided have grown exponentially over the years and have probably been drawn on relevant budget lines, appearing as ad hoc expenses relating to surpluses. Moreover, the Region has apparently made it impossible for the contract to be awarded to a third party, thereby preventing any form of private management that would respect basic rules of financial management, efficiency and transparency.

The funding measures could be considered as State aids to an undertaking which has been in deficit ever since it was established, aimed at systematically making up its losses without the slightest attempt to improve productivity. Moreover, these interventions were not limited to a specific period, but have in fact involved ever-increasing amounts and may therefore constitute violations of competition and free-market rules, as well as the criteria laid down for companies in difficulty.

Will the Commission state:

- whether it considers, on the basis of the above facts, that the regional law of the Valle d'Aosta is at odds with the relevant Community directives?

- whether it believes that a verification procedures should be opened vis-à-vis the regional authorities?

- will it give its overall opinion on this situation?

Answer given by Mr Monti on behalf of the Commission

(25 June 2002)

The Honourable Member raises a number of complex issues that would require an in-depth analysis of the relevant pieces of legislation and of the financial relations between the Casino della Valle di Saint Vincent and Regione Valle d'Aosta.

On the basis of the general information provided in the question, the Commission can only attempt to formulate some preliminary and general remarks on this matter.

According to Article 295 of the EC Treaty, the Community shall respect the Member States' rules on property ownership. This means that the Commission cannot question the ownership of an undertaking, whether the undertaking is owned by a public authority or by private subjects.

Therefore, in this case, the Commission cannot conclude at this stage that the Legge Regionale of 21 December 1993 which attributes the property of the Casino to the Region, is at odds with Community Law.

The question refers also to the circumstances that the Casino has received public funds from the Region (finanziamenti ad hoc connessi ai resultati di gestione), even if it has always posted losses.

The neutrality principle enshrined also implies that the EC Treaty rules, and especially competition rules, apply to any kind of undertaking, regardless of its ownership. A corollary of the neutrality principle is that public authorities can intervene in the market so long as their behaviour substantially coincides with that of a private investor operating in a market economy. This is the so called market economy investor principle. If this principle is respected no State aid within the meaning of Article 87(1) of the EC Treaty might exist. It should also be added that the State aid rules of the EC Treaty only apply to aid insofar as it affects trade between Member States.

In order to verify whether the interventions of the Region Valle D'Aosta in favour of the Casino comply with the market economy investor principle the Commission will ask for the Italian authorities to inform it about the details of such interventions.