All the shortcomings of state aid granted by the government
Aid from Gualtieri's Mef to businesses? All within the ceiling desired by the EU. But there are sons and stepchildren. The in-depth analysis by Giuseppe Liturri
In addition to the damage, the insult. The aid that the State has gradually granted since March must remain within the maximum limit of 800,000 euros.
This figure could soon become the nightmare of any Italian company that has had the good fortune to receive various kinds of subsidies provided by the decree-laws that followed one another from March to the end of October (Cura Italia, Liquidity, Relaunch, August and Refreshments). In fact, these decrees contain numerous measures defined by EU regulations as State aid and which, consequently, as we will see below, are considered admissible but within the aforementioned limit. The result will be that numerous benefits launched by the Government will soon become unusable. If we add to this that the European confrontation sees us, as usual, penalized, the mockery is complete.
Why do we risk ending up in this bottleneck? Let's start with the definition of state aid: these are public aid measures that do not affect the whole economy and confer a selective advantage limited to certain sectors or types of enterprises, distorting or threatening to distort competition in the internal market. Which is a bit like the “Holy Grail” of the European construction. In order for the anti-crisis measures to overcome this prohibition, according to Article 107 of the Treaty on the Functioning of the EU, it must be shown that
- the aid is general in scope and therefore outside the particular restrictive regime;
- or whether it is aid intended, inter alia:
- to "remedy the damage caused by natural disasters or other exceptional events" (107, paragraph 2 letter b)
- o that they are aid "intended to remedy a serious disturbance in the economy" of the Member State (107, paragraph 3 letter b)
There is a fundamental difference between the first cause of exemption and the second: both must be notified but the first aid is, by definition, compatible with the internal market, and therefore does not need prior approval by the Commission, unlike the second. aid that "can" be considered compatible with the internal market, only after notification and related approval. It looks like a distinction of goat wool but it is not, since it is on this difference that tens of billions of aid dance.
Let's not forget that, in 2015, a decision by the Commission considered an irrelevant recapitalization of Banca Tercas for 300 million state aid, triggering the resolution of 4 banks and an epochal crisis of Italian banks.
When on March 19, in the face of the disastrous economic consequences of the blocking of numerous production activities and services due to Covid, the Commission launched the Temporary Framework relating to state aid, it defined twelve facilitating measures for various types, almost all attributable to the purpose of remedying a serious disturbance in the economy (107, paragraph 3, letter b).
The list is long: limited amount aid (direct grants, tax and payment concessions or other forms) aid in the form of state loan guarantees to ensure access to corporate liquidity, subsidized interest rates for public loans and bank guarantees and loans, short-term state export credit insurance, research and development and investment aid for the production of Covid-19 related products, aid in the form of tax deferral and / or social security contributions, aid in the form of grants for the payment of wages, aid for the recapitalization in favor of enterprises, support for fixed costs not covered by enterprises.
Most of the support measures adopted by our government have a legal basis in one of those twelve types of State aid considered eligible, have been notified in Brussels and, for each of them, there is a Commission decision certifying their compliance. to the Temporary Framework (TF). From March to the end of October, there are 22 authorization decisions.
The problem for us is that most of them are either allowed within the old € 200,000 de minimis or within the new € 800,000 TF limit. Almost all of them have the terrible defect of "consuming" one of these two plafonds.
Five examples to understand us: the non-repayable grant for businesses (art. 25 "Relaunch"), aid for the recapitalization of businesses (art. 26 "Relaunch"), the fund for integrated promotion on foreign markets (art. . 72 "Cura Italia"), the tax credit for commercial leases (Article 28 "Relaunch") and the 30% tax reduction for the South (Article 27 of the "August" Decree) all absorb the ceiling of € 800,000 of the TF.
With the result that companies have now started the obstacle course to avoid detachment and, above all, to avoid incurring criminal penalties, as well as the obligation to return the amounts illegally received. The penalty risks being triggered because, at the time of requesting the facilities, the companies present a self-certification certifying the availability of the ceiling which could subsequently turn out to be false if other requests for help not yet granted and, in the meantime, received, are pending.
The limit of our Government's action lies precisely in the decision to have supinely and mainly routed all the facilities along the path of the "remedy for a serious disturbance in the economy" rather than along that of "aid for exceptional events". In the latter case, the limit of € 800,000 does not apply.
On this point, the comparison with Germany, which already in May boasted the record in the EU of state aid to its companies (about 1,000 billion out of a total of 2,000, with Italy standing at 300) is pitiless. Regardless of the greater space offered by their public budget, the Germans pushed hard on the lever of the exceptional event: billions for airports, for regional public transport companies, for tour operators, for Lufthansa (6 billion against 199 million paid to Alitalia), even the charter company Condor received 550 million. All without ceiling.
Instead, our country has put all the eggs in the same basket: it has granted aid of various kinds, previously listed in a non-exhaustive way, referring almost exclusively to the twelve cases of aid eligible according to the Temporary Framework (Tf) whose expiry it was extended from 13 October to 30 June. With this, it only contributes to amplifying the problem: in fact, what do companies do with a further deadline to do what they are already unable to do today, given that they dance on the balance line of exceeding the ceiling?
Little or nothing has been granted to companies pursuant to Article 107, second paragraph, letter b), which justifies aid granted to compensate for damage caused by natural disasters and other exceptional events. A document, published on 10 November by the Commission, shows that since March it has authorized 29 measures with this justification. Only one, to say one, relates to Italy (199 million paid to Alitalia).
But the problem does not seem to stop there, as a further aspect increases the government's feeling of inexperience or laziness. After the alarm launched by the newspaper Sole 24 Ore on 29 October last, about the risk of repayment of state aid and the partial denial of the following day ("The Government: aid, let's negotiate with the EU"), we have the confirmation, by viewing confidential documents from sources at the highest Community level, that the negotiations ended unsuccessfully: the Commission services reiterated that the calculation of the limit of eight hundred thousand euros will be performed not at the level of the single beneficiary company, but of the company "as a unit economic ". Completely indefinite concept and left to case-by-case assessments, which does not even coincide with that of a "single company" which also exists at EU level and is used to calculate the threshold of "de minimis" contributions and also the distinction between small / medium and large companies. As a first approximation, the accounts will be done at group level, even if the definition is not perfectly coincident.
It is easy to imagine the chaos that will unleash, also because in Italy the National Aid Register (RNA) has been activated at the level of the single beneficiary company and France and Germany, for example, do not even have that and the self-certifications required by the national body. grantor are likely to be a boomerang.
The story arose because the government, with the “Relaunch” decree, launched a scheme of aid that can be granted by Regions, Autonomous Provinces and Chambers of Commerce with their own funds, worth 9 billion. Even this framework regime, although not granted by the central State, perfectly mirrored the aid that can be granted under the TF. When on 21 May the Commission declared its compatibility , the Regions prepared autonomous facilitating instruments that did not require further approvals, as long as they were consistent with the authorized framework regime. But the Commission a few days ago reiterated that, not only do these instruments contribute to "consume" the single ceiling, but "the Commission cannot accept the interpretation of a single beneficiary company and will consider several legal entities as part of a single entity economic for the purposes of state aid ". With this throwing Regions and businesses into total uncertainty about what to do.
On another front, while the Government has shown an excellent view in following the TF of the Commission slavishly, it was instead struck by sudden presbyopia at point 3.12 introduced with the last modification of 13 October. In fact, it is possible to grant aid to enterprises up to 70% (90% for micro and small enterprises) of the fixed costs not covered by the profits incurred in the period 1 March 2020 – 30 June 2021, provided that there is a loss of turnover at least by 30% compared to the same period in 2019. Basically, it is enough to consider the losses suffered in the reference period and calculate the contribution. A more than adequate measure for hotels, restaurants, bars and recreational and cultural activities, decimated by the restrictive measures of recent weeks and last spring. Instead, the government, with the “Ristoro” decree, took refuge in the reply of the economically irrelevant non-repayable grant already paid in June.
Precisely on this point, in Denmark they spared no expense even if it remains to be understood how this was possible. Without wishing to suspect that "there is something rotten in Denmark" – because far be it from us to even assume that the role of Commissioner for Competition, held by the Danish Margrethe Vestager since 2014, has had even minimal importance – there is to be done congratulations to the Danish government for the huge amount of state aid it has managed to spend on its businesses. The fact is that a country whose GDP is about one sixth of the Italian one stands, together with Austria and Germany, at the top of the list of Member States that have granted state aid considered admissible because "intended to remedy the damage caused by natural disasters or from other exceptional events "(article 107 paragraph 2 letter b of the Tfeu). The respective governments have provided Danish, Austrian and German companies, in order, 7, 8 and 6.5 billion without this being considered distorting competition. Out of 29 decisions approved for exceptional events, 7, an absolute record, relate to Denmark.
In this ranking, Italy is among the last, having granted only 199 million to Alitalia.
Of course, this is only a minority fraction of all state aid authorized by the Directorate-General for Competition, which depends on the powerful Vice-President of the Commission.
In fact, the majority of the aid was authorized to the various Member States "to remedy a serious disturbance in the economy" (Article 107 paragraph 3 letter b of the Consolidated Law on Finance) or "to facilitate the development of certain activities or certain economic regions "(Article 107 paragraph 3 letter c of the Consolidated Law on Finance).
After the outbreak of the pandemic, the Danes spared no expense and already on 8 April they received the approval from the Commission of an aid scheme for a total of 5.4 billion for the companies that suffered in the period from 9 March to 9 June a loss of turnover of more than 40%. To these enterprises, the State promised to recognize the partial or total reimbursement, in relation to the amount of the loss in turnover suffered, of the fixed costs incurred, up to a maximum of 8 million per enterprise. A figure ten times higher than the ceiling set by the TF for all other EU companies.
If we reflect on the fact that in the second quarter of 2020, compared to the first, the Danish GDP fell "only" by 6.8%, while the Italian one lost 13% and the Danes, due to Covid, counted 130 deaths per million inhabitants, against 384 of the EU average, the timeliness and magnitude of the response of Hamlet's compatriots to the economic crisis from Covid is even more appreciated.
We are left with the bitter consideration of not having been able (or knowing?) To follow their example and instead having dispersed a flow of about 100 billion extra deficits, however not all actually spent, in a myriad of regulations, which today force entrepreneurs to move with a thousand cautions for fear of exceeding the maximum ceiling and having to return aid.
It is regrettable to note that, on the occasion of a crisis, as also happened in 2012/2013, the EU causes an increase in economic divergences rather than acting as a shock absorber at least able to cushion them.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/tutti-i-difetti-degli-aiuti-di-stato-concessi-dal-governo/ on Sun, 15 Nov 2020 17:30:12 +0000.