ILVA: €300 mln bridging loan also in E.U. sights

Genoa - The bridging loan worth €300 million that was granted to ILVA by the Italian Government last December is now also in the sights of the European Commission because it is suspected to be State Aid provided in violation of E.U. regulations and therefore distorting competition

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Genoa - The bridging loan worth €300 million that was granted to ILVA by the Italian Government last December is now also in the sights of the European Commission because it is suspected to be State Aid provided in violation of E.U. regulations and therefore distorting competition. The announcement was made by the European Commission which also approved an extension of the “in-depth” investigation begun in January.

The action taken today by Brussels must be considered in relation to the fact that the formalisation of the €300 million loan, although it had already been announced and expected, took place only after the start of the investigation.

In any case, as Ricardo Cardoso, the spokesman for Commissioner of Competition Marghrete Vestager, kept repeating, it will not impede the financing and execution of the construction work necessary to deal with the environmental problems and pollution caused by the steel plant in Taranto.

New Minister for Economic Development Carlo Calenda’s commented that the move from Brussels “had been expected for quite some time: the important thing is that it does not influence the sale process” of the company. Calenda was in Brussels to participate in an E.U. Council of Ministers for the first time in his new role. Are you concerned about the new initiative from Brussels? “No,” Calenda responded to journalists. “It was already written in the announcement” on the sale of ILVA that “these resources would be subject to a return. Which is why it has no weight from any point of view except for the violation itself, which we had assumed would happen and we are in almost daily contact” with the Commission. “In the specific case of ILVA,” Vestager observed, “the Commission will now determine whether the Italian support measures comply with E.U. regulations on State Aid. We will work together with Italy to overcome our current concerns. The best guarantee of future sustainability for steel production in Taranto is the sale of ILVA’s businesses to a buyer who will bring them up to the standards of the environmental regulations and will make the most of them for productive purposes.”

ILVA is the largest steel plant in the E.U. and the Commission received numerous complaints from interested parties about the measures taken in its favour by the Italian authorities.

Brussels pointed out that on the whole, the measures taken by the Italian State could amount to State-supported financing for a total of about €2 billion and include State guarantees on loans, and exceptionally, a law that in case of bankruptcy grants absolute priority of payment to loans granted to ILVA versus debts to public entities, a law that allows ILVA to receive funds confiscated from its shareholders and former management in the context of the pending criminal proceedings from its long-standing lawsuit against the State-owned company Fintecna, even before their ownership or a resolution has been found.

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