European Court of Justice Orders Italy to Pay Fine for Delay in Recovering Aid Incompatible With Common Market (September 17, 2015) [1]
On September 17, 2015, the European Court of Justice (Court) decided Commission v. Italy and ordered [3] Italy to pay a fine for its delay in recovering state aid incompatible with the common market. In 1999, the Commission initiated proceedings against Italy for granting reductions in and relief from social security contributions to firms, which it argued amounted to impermissible state aid. After having unsuccessfully ordered Italy to recover the aid, the Commission began legal action against Italy for failure to comply with its decision, which led to a 2011 judgment by the Court that Italy was in violation of its obligations to implement the Commission’s decision. The present case arose out of the Commission’s conclusion that Italy still had not recovered the aid and had suspended some of its attempts to do so. The Court accepted this finding, and noted that the difficulties encountered in the recovery of the aid did not justify Italy’s failure to comply with the 2011 judgment. It emphasized that a Member State could not advance its delay in complying with its obligations as a reason for non-compliance with the Court’s judgment and stressed that the obligation to recover the aid was not affected by the financial state of the recipient companies, Italy having the option and obligation to initiate liquidation proceedings if necessary. The Court assessed a fine of €12 million per semester of delay in the execution of the 2011 judgment to encourage Italy to initiate effective recovery procedures and a lump sum of €30 million as a preventative measure against future infringements of EU Law.