EUROPEAN COMMISSION

Brussels, 04.02.2015 C (2015) 674 final

PUBLIC VERSION

This document is made available for information purposes only.

Subject: State aid SA.39539 (2014/N) Italy - Aid scheme to compensate for damage caused to undertakings by the heavy snowfalls of February 2012 in the provinces Forlì-Cesena and Rimini (all sectors except agriculture, forestry, fisheries and aquaculture)

Dear Sir,

1. PROCEDURE

(1) By electronic notification dated 22 September 2014, the Italian authorities notified the scheme, pursuant to Article 108(3) of the Treaty on the Functioning of the European Union (hereinafter "TFEU"). On 11 November 2014, the Commission requested additional information, which was submitted by Italy on 10 December 2014. The last complementary information was submitted by Italy on 13 January 2015.

2. DESCRIPTION OF THE AID MEASURE

2.1. Objective of the aid scheme

(2) The notified aid scheme aims at compensating undertakings for damage suffered as a result of the exceptionally heavy snowfalls and the subsequent ice and frost weather conditions which occurred in the provinces of Forlì-Cesena and Rimini (Region Emilia-Romagna) in February 2012 (hereafter: "the snowfalls"). The snowfalls hit the area between 31 January and 12 February 2012.

S.E. Paolo GENTILONI Ministro degli Affari esteri P.le della Farnesina 1 00194 Roma ITALIA

Commission européenne/Europese Commissie – 1049 Bruxelles/Brussel – BELGIQUE/BELGIË Centralino: +32 22991111. 2.2. Legal bases

(3) The legal bases of the scheme are: − Decreto del Presidente della Giunta regionale n. 11 del 6 febbraio 2012 (Dichiarazione dello stato di crisi regionale fino al 31 maggio 2012 per le eccezionali nevicate e gelate nei territori delle province di Rimini, Forlì-Cesena, Ravenna, Ferrara, Bologna, Modena, Reggio Emilia, Parma, Piacenza). − Decreto della Presidenza del Consiglio dei Ministri dell'8 febbraio 2012 (Dichiarazione dell'eccezionale rischio di compromissione degli interessi primari a causa delle eccezionali avversità atmosferiche che stanno colpendo il territorio nazionale nel mese di febbraio 2012, ai sensi dell'articolo 3, comma 1, del decreto-legge 4 novembre 2002, n. 245, convertito con modificazioni dall'articolo 1 della legge 27 dicembre 2002, n. 286). − Delibera di Giunta regionale della Regione Emilia-Romagna n. 1226 del 21 luglio 2014 (Approvazione delle direttive disciplinanti i criteri, le modalità e i termini per la presentazione delle domande di contributo e per la relativa concessione a favore dei soggetti privati e delle attività produttive dei comuni delle province di Forlì-Cesena e Rimini per i danni subiti in conseguenza delle eccezionali precipitazioni nevose verificatesi nel febbraio 2012).

2.3. Ascertainment of the natural disaster and geographic scope

(4) Between 31 January and 12 February 2012 the entire territory of the region Emilia- Romagna was hit by exceptional and unusual snowfalls, with particular intensity in the Provinces of Forlì-Cesena and of Rimini. In the mountain area of these two provinces, the snowpack reached heights of 2.5 to 3 meters, locally exceeding 4 meters due to the wind, while in the plains the snowpack reached heights of 1.5 to 2 meters. The snowfalls were accompanied by severe frost temperatures which reached values from - 16 to -19 degrees Celsius, remaining below zero for several days in a row, and by strong wind from the northeast with gusts with a maximum of 100 km/h. The situation was made particularly difficult by the fact that the most affected areas of the two provinces were isolated for days because of the inaccessibility of the ways of transport. This hampered the emergency evacuation of the snowpack accumulated on the roofs of buildings. The accumulation of the thick snow cover on the roofs of business premises and the subsequent wind that led to ice and frost exceptionally increased the heaviness of the snowpack itself, leading to the collapse of the structures.

(5) Italy reported that the total damage in the provinces of Forlì-Cesena and of Rimini amounts to approximately EUR 150 million, of which approximately EUR 100 million concerns damage to non-agricultural productive activities.

2 (6) The meteorological reports1 from the Regional Civil Protection Department describe the events in terms of the snowfall levels recorded in the given period, and particularly focusing on the Provinces of Forlì-Cesena and Rimini.

(7) By decree n. 11 of 6 February 2012 the President of the Region Emilia-Romagna declared the state of regional crisis for the exceptional snowfalls and frost in the whole region (see the legal basis referred to in recital 3).

(8) By decree of 8 February 2012 the Italian government declared the exceptional atmospheric conditions to represent a state of risk for "primary interests" (see the legal basis referred to in recital 3).

2.4. Budget and financing of the aid scheme

(9) The scheme will be funded through general budget resources of the Italian authorities, and its notified budget amounts to EUR 100 million.

2.5. Beneficiaries

(10) Aid under the present scheme is addressed to undertakings which suffered damage being a direct consequence of the snowfalls.

(11) The notified scheme applies to undertakings in all economic sectors, with the exception of undertakings active in the forestry, fishery and aquaculture sectors and those active in the production, processing and marketing of agricultural products listed in Annex I of the TFEU.

(12) The estimated number of beneficiaries is between 501 and 1000. In 2014 the Italian authorities informed that 706 undertakings had already reported damages under the notified measure.

2.6. Duration of the aid scheme

(13) Aid under the present scheme may be granted as from the date of the Commission approval of the scheme. Beneficiaries have to submit all documents proving their expenses until 30 September 2015. The legal basis provides that payments concerning this scheme can be made until 12 February 2016.

2.7. Eligible expenses

(14) Eligible costs under the present scheme are those related to compensation of material damage that is a direct consequence of the snowfalls. Aid may be granted exclusively for restoring and reconstructing buildings damaged or destroyed by the snowfalls. The eligible costs are limited to the expenditure to restore roofing, walls and technical systems (for heating, electricity, water and sewage). Damage below EUR 5 000 is not eligible under the scheme ("franchise").

1 The Italian authorities provided official reports produced by the regional department of civil protection, namely the Agenzia regionale Protezione Civile della Regione Emilia-Romagna, which describe in detail the meteorological features of the event and its impact on the territory.

3 (15) Costs for the compensation of economic damage2 are not eligible for aid under the present scheme.

2.8. Calculation method to establish the damage

(16) The damage caused by the snowfalls to buildings is calculated with reference to the cost to restore or rebuild the damaged structure.

(17) The beneficiary applying for aid shall provide a sworn statement quantifying the damage issued by a qualified licenced expert or the sworn statement by an insurance company (if the building is covered by insurance).

2.9. Form of aid and aid intensity

(18) The aid is awarded in the form of direct grants corresponding to a percentage of the value of the damage suffered by the undertakings, net of the franchise.

(19) Beneficiaries may be granted aid up to 80 % of the eligible costs for damaged or destroyed buildings, calculated on the basis of the effective expenditure for rebuilding or restoring the damaged property (with a maximum amount of EUR 200,000 per establishment).

2.10. Cumulation of aid

(20) Aid under the notified scheme can be cumulated with other types of public aid up to 80 % of the damage. Furthermore, aid can be cumulated with insurance payments within the limit of the amount necessary for repairing or rebuilding the damaged property.

(21) The Italian authorities confirmed that account will be taken of the rules on cumulation of aid and that the overall amount of compensation received by an individual beneficiary from any public funds combined with insurance payments will not exceed 100 % of the assessed damage in any circumstances.

2.11. Outstanding recovery orders

(22) The legal basis excludes from the scheme any undertaking that has benefited from earlier unlawful aid declared incompatible by a Commission Decision, until that undertaking has reimbursed or paid into a blocked account the total amount of unlawful and incompatible aid and the corresponding recovery interest.

2.12. Management of the measure

(23) The responsible authorities for the implementation of the measure are the Region Emilia-Romagna assisted by the responsible local authorities, i.e. the Administrations of the Province Forlì-Cesena and of the Province of Rimini and the municipalities of the same provinces. As laid down in the scheme's legal basis referred to in recital 3,

2 Incurred losses and foregone profits associated with temporary interruptions of the production process, the loss of orders, customers or markets.

4 these local authorities shall verify the truthfulness and compliance of each claim with all the requirements laid down in the aid measure,.

(24) In order to avoid overcompensation of damage in case of cumulation with other aid to compensate the same damage, the local authorities and the Region Emilia-Romagna will keep record of all compensation paid out under this measure.

2.13. Professional confidentialities

(25) The Italian authorities declared that the notification does not contain any confidential information which should not be disclosed to third parties.

3. ASSESSMENT OF THE AID MEASURE

3.1. State aid character of the measure

(26) The compensation is provided through State resources within the meaning of Article 107(1) TFEU. Since the compensation will be granted to a limited number of undertakings, the measure is considered to be selective and to confer an advantage which may distort or threaten to distort competition. As the scheme covers sectors and undertakings involved in trade between Member States, there is a risk that the aid could affect such trade. The proposed aid measure therefore constitutes State aid within the meaning of Article 107(1) TFEU.

3.2. Legality of the aid measure

(27) The Commission notes that the Italian authorities complied with their obligation to notify the measure in accordance with Article 108(3) TFEU, considering that the scheme cannot be exempted from the notification requirement under the General Block Exemption Regulation No 651/2014 ("GBER")3, since heavy snowfalls are not mentioned among the natural disasters listed in Article 50(1) under Section 8 of the GBER.

3.3. Compatibility of the aid measure

3.3.1. Assessment of the measure on the basis of State aid rules

(28) The Italian authorities informed the Commission of the exceptionally heavy snowfalls and the subsequent ice and frost weather conditions which occurred in the provinces of Forlì-Cesena and Rimini (Region Emilia-Romagna) between 31 January and 12 February 2012, and provided detailed meteorological data and reports.

(29) The Commission notes that the competent regional and national authorities formally recognized these exceptional weather conditions as an adverse climatic event (as specified in the legal bases referred to in recital 3, and explained in recitals 7 and 8).

3 Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in the application of Articles 107 and 108 of the Treaty, OJ L 187 of 26.6.2014, p. 1

5 (30) The Italian authorities provided details on the description and the quantification of the damage caused to undertakings by the heavy snowfalls.

(31) The Italian authorities notified an aid scheme to compensate for the damage caused by the snowfalls under Article 107(2)(b) TFEU, which states that aid to make good the damage caused by natural disasters or exceptional occurrences shall be compatible with the internal market.

(32) The Commission notes that aid to make good damage due to heavy snowfalls has not been assessed under Article 107(2)(b) in previous State aid decisions. Moreover, the notions of ‘natural disaster’ referred to in Article 107(2)(b) of the Treaty must be interpreted restrictively4. However, in various Commission decisions5 aid for damage caused by heavy snowfalls and frost has been considered compatible with Article 107(3)(c) TFEU as compensation for damage caused by an adverse climatic event which can be assimilated to a natural disaster. These decisions refer to aid to compensate for damage caused to agricultural structures (stables, roofs, and greenhouses) comparable to the industrial buildings or constructions damaged in the case at hand. All these decisions refer to comparable adverse climatic events (heavy snowfalls) in comparable areas (a long list of Italian provinces).

(33) Article 107(3)(c) TFEU stipulates that "aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest" may be considered compatible with the internal market. As the notified measure aims exclusively at re-establishing the situation of the undertakings before the adverse climatic event occurred, it can be considered compatible with the internal market as far as it does not provide a compensation exceeding the amount of damage caused by the adverse climatic event to the beneficiaries' property. Therefore, the Italian authorities have to verify that the compensation only relates to damage directly caused by the event, and never results in overcompensation.

3.3.2. Mechanism to rule out overcompensation

(34) In order to be compatible with the internal market, the aid must be proportional to the damage caused by an adverse climatic event which can be assimilated to a natural disaster and the compensation for damage to assets claimed for by the beneficiaries must be a proven direct consequence of the former. Aid must not result in overcompensation of damage; it should only make good the damage caused by the adverse climatic event.

4 See paragraphs 329 and 330 of the European Union Guidelines for State aid in the agricultural and forestry sectors and in rural areas 2014 to 2020 (2014/C 204/01), OJ C 204 of 1.7.2014. Footnote 70 thereof refers to judgments of the Court of Justice in cases C-73/03 (paragraph 37) and joined cases C- 346/03, C-529/03 (paragraph 79). 5 State aid decisions for cases N 145/2005 for events of November 2004 in the province of Udine; N 240, N 440, N 495, N 561 of 2005, N 79, N 91, N 97 of 2006 for the heavy snowfalls of January-March 2005 in various Italian provinces; N 337/2006 for the snowfalls of January 2006 in the province of Belluno; N 338 and N 718/2006 for snowfalls of December 2005 in Imperia and Pisa.

6 (35) The objective of the present scheme is to restore the situation of the affected entities to the one as from before the adverse climatic event. The compensation is based on the rebuilding or restoring cost of the affected property.

(36) Aid under the present scheme and compensation from other sources, including insurance payments, may not exceed the value of the damage to the individual beneficiary. Overcompensation is therefore ruled out. Moreover, the Commission observes that the timeframe for applications and payments of aid under the scheme is acceptable, as they all take place within four years following the occurrence.

(37) The assessment of claims under the scheme is carried out by the Region Emilia- Romagna, assisted by the local authorities in the provinces of Forlì-Cesena and Rimini. They will verify the compliance of each claim with all the requirements laid down in the aid measure as described above in the recitals from 14 to 23.

(38) On the basis of the above, the Commission finds that the measure compensates damage caused by the snowfalls only and that it introduces an appropriate mechanism to ensure that there will be no overcompensation. The objective of the notified measure is to restore the situation of the affected entities to the status as from before the adverse climatic event and to enable them to resume their activities, but does not give them an additional advantage.

(39) In view of the above, the Commission considers that the notified aid scheme is compatible with the internal market in accordance with Article 107(3)(c) TFEU.

4. DECISION

(40) The Commission has accordingly decided not to raise objections to the aid scheme on the grounds that it is compatible with the internal market pursuant to Article 107(3)(c) of the Treaty on the Functioning of the European Union.

(41) As the Italian authorities confirmed that the information provided to the Commission during the notification does not contain confidential information which should not be disclosed to third parties, the Commission will publish the full text of the letter in the authentic language on the Internet site: http://ec.europa.eu/competition/elojade/isef/index.cfm

Yours faithfully,

For the Commission

Margrethe VESTAGER Member of the Commission

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