91999E0627

WRITTEN QUESTION E-0627/99

by Cristiana Muscardini (NI) to the Commission

(12 March 1999)

Subject: Community funds and "Sviluppo Italia"

As is widely known, Legislative Decree 1/99 provides for the setting up of a holding company, Sviluppo Italia, and the transfer thereto of Government shares in companies that are already operational in order to create a single group with the aims laid down in Article 1 of that decree. The legislative decree also provides for the subdivision of activities into "development services" and "financial services", for which two companies controlled by Sviluppo Italia will be responsible.

Public funds of Community origin, intended specifically for the "financing" of business promotion programmes and for depressed areas, are being used as start-up (risk) capital and operational funding by a single entity which, though formally private (incorporated as a public limited company - S.p.A), is actually under Government control, and there is a possibility of the funds being used for purposes other than those laid down for them.

Given that no distinction is drawn in accounting terms between activities conducted to satisfy public interest requirements and business activities, Sviluppo Italia's operating companies will be in a dominant position on the development services and financial services market.

The Sviluppo Italia group is incorporated under private law and therefore does not offer the safeguards and guarantees of a body established under public law.

Could the Commission state whether the above arrangements conflict with Community rules on Structural Funds, State aids and competition?

Answer given by Mr Van Miert on behalf of the Commission

(16 April 1999)

The technical means chosen by a Member State to manage the structural funds are under the competence of the Member State itself. Therefore, the choice to merge all the Member State's holdings in a single company, constituted as a joint stock company, is not relevant under Community state aid rules.

The EC Treaty does not prejudice the rules in Member States governing the system of property ownership (see Article 222). In this sense, the creation, by a Member State, of a holding in the form of joint stock company operating on the market does not, per se, infringe Community competition rules.

In any case, the competitive activities possibly performed by Sviluppo Italia will be subject to the Community competition rules, and in particular to those regarding state aid.