Report for the Hearing in Case C-261/89

I — Facts and written procedure

1. During the period 1983 to 1988, the Italian authorities drew up and presented to the Commission a reorganization and improvement plan for the State-owned aluminium industry. By letters of 14 December 1984 and 25 November 1985, the Commission of the European Communities initiated the procedure provided for in Article 93(2) of the Treaty with respect to the financial contributions envisaged by the said plan.

2. On 18 September 1987 the Italian authorities decided to authorize EFIM (the agency for holding shares in and financing manufacturing industries) to issue, at the expense of the State, a debenture loan of which LIT 100000 million would be allocated to financing investments in the undertakings Alumínia (LIT 70000 million) and Compagnia Sarda Alluminio, hereinafter referred to as Comsal (LIT 30000 million).

3. The application was lodged at the Court Registry on 17 August 1989.

II — Conclusions of the parties

4. The Italian Government claims that the Court should:

Ill — Pleas in law and arguments of the parties

5. The pleas in law and arguments of the parties centre on:

(a) Conformity of the financial measures at issue with the ceiling of LIT 989000 million authorized by the Commission

6. The Italian Government takes the view that the ceiling of LIT 989000 million has been respected because, it states, the decision of 17 December 1986 approved the contributions paid to the aluminium sector until the end of 1985 and the financing for 1986 for the same sector amounting to LIT 200000 million.

(b) The designation of the financial measures referred to in the contested decision as aid

7. According to the Italian Government, the Commission has not applied correctly the criterion for assessing the existence of an aid, which hinges upon a comparison between the attitude of the State and the attitude which would presumably be adopted in the situation in question by a private investor.

8. First the Commission disagrees with the Italian Government's view that the purpose of financial measures may be taken as a criterion for preventing a financial measure from being designated as an aid. It points out that under the outline which it published in 1984, capital contributions must be regarded as a State aid where the undertaking's financial situation does not make it possible to expect a normal return within a reasonable period on the capital invested or where the undertaking is not in a position to obtain on the capital market the resources subscribed.

(c) The Commission's failure to assess the compatibility of the financial measures with the common market, in particular having regard to Article 2(3)(c)

9. The Italian Government claims that it appears that the contested decision may be challenged on the ground that, having found that the financial measure at issue was a new aid not authorized by the decision of 17 December 1986, and being in any event required to consider the compatibility of that aid with the common market, the Commission based its decision on criteria quite different from those used for its decision on the aluminium plan.

10. The Commission takes the view that by this argument the Italian authorities are attempting to question the decision of 17 December 1986, which, not having been challenged within the prescribed period, has become definitive.

1 Language of the case: Italian.