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Alcoa case: EU Commission Refers Italy to Court for Non-Recovery of Illegal State Aid (Preferential Electricity Tariff)

The European Commission has announced today that it will refer Italy to the European Court of Justice (ECJ) in the Alcoa case for not having recovered the unlawful state aid following the Commission's decision of 19 November 2009.

The facts

The Alcoa case concerns the grant of subsidy to Alcoa in the form of preferential electricity tariff, the direct beneficiaries being two aluminium smelters in Sardinia and Veneto. See details of the facts in previous post from Sept. 2010 here and a similar case in Greece (see post from Jan. 2010 here). The Commission considered that the preferential tariff represented an unfair advantage in favour of the undertaking. The aid was received from January 2006 to January 2007, and the amount to be recovered near EUR295 million.

Recovery of Unlawful State Aid and Undergoing Judicial procedure

Alcoa appealed the Commission's decision before the ECJ, asking for interim measures (Case T-177/10, see previous post on the appeal here). In July 2010, the General Court first dismissed Alcoa's legal action and its request for interim measures. Alcoa introduced an appeal which is under examination.

Besides the undergoing judicial procedure, Italy has the obligation to recover the aid within the deadline decided by the European Commission (See Art. 14, Regulation No. 659/99). The reason is, as put by the European Commission, that delays in the recovery of unlawful subsidies maintain the distortion of competition created by the state aid. Where a Member State does not implement the recovery decision within the prescribed time, the Commission (or any other Member State) refer the matter to the Court of Justice pursuant to Article 108.2 TFEU. Where the Member State still does not comply with the ECJ judgment, the Commission can then require the Court to impose penalty payments to this State pursuant to Article 260 TFEU.


Press release, European Commission, IP/11/352;

Press release, European Commission, IP/09/1750;