ILVA, Brussels opens investigation into state aid

Rome - News of the investigation comes on the day a controversy over the new General Manager of ILVA, Marco Pucci, broke out in Italy.

Rome - A new chapter opened in the confrontation between Brussels and Rome over the troubled steel plant located in southern Italy; the European Commission has just decided to open an investigation over alleged state aid to ILVA, with an official announcement expected tomorrow. News of the investigation comes on the day a controversy over the new General Manager of ILVA, Marco Pucci, broke out in Italy. As part of a team of managers at the steel making ThyssenKrupp plant in Turin, he had been indicted for a deadly workplace fire that occurred there in 2009. According to reports, ILVA’s board was given the news by the EU Competition Commissioner, Margrethe Vestager; it seems that, through negotiations with Italian state officials, Commissioner Vestager will somewhat “limit” damages for Italy: the investigation will, in fact, only focus on those aids to production that went unreported, and not on those the plant received regarding environmental clean-up operations.

Tomorrow, then, a stage in the investigation known as the written procedure, will be officially concluded. According to what has emerged, the Commission’s approach will be to ask Italy to suspend disbursement of aid for the steel sector (for which there is overproduction at EU level), and to come up with a business plan that seeks to reduce production capacity. Such a plan would fulfil one of two ‘clauses’ that are said to be included in tomorrow’s decision. The other one concerns the possibility to re-evaluate the issue of state aid to production should the steel company be sold-off within a short time span. The European Antitrust investigation will focus on the government’s €300 million bridging loan to ILVA, plus further transfers of up to €800 million, which were contained in Italy’s Stability Law. The latter amount was actually intended to be used to remedy the environmental damage for which a separate infringement procedure has been opened.

But as any state aid that was used in the clean-up operations seems to be in the clear, the final sum that, should the investigation find evidence of unlawful aid, Italy will be expected to recover from ILVA will be significantly reduced. Meanwhile in Italy, the steel producer under scrutiny has been facing protests triggered by the appointment of Pucci, whose name has reopened old wounds and sparked controversy. “It seems a questionable choice, to say the least. On 13 May the final judgment in the Supreme Court on the ThyssenKrupp industrial accident case will take place; an appeal judgment had sought for Pucci a six years and ten months sentence,” commented on Facebook Antonio Boccuzzi, Democratic Party MP, who survived the fire at the steel plant. Relatives of the victims, reported they were “disgusted” by his appointment. Lawyers for Pucci pointed out, how their client has, throughout the trial, maintained his innocence in the fatal accident. At the time, Pucci was Director with “specific powers” for the areas of sales and marketing. “He had, then,” maintain his legal team, “no responsibility in the area of workplace safety, which fell entirely on the CEO.”