Court of Justice interprets Article 107(1) TFEU regarding financial contributions to companies participating in a foundry sector program
Today, the Court of Justice (CJEU) delivered its judgment in case Cividale and Flag and Duferco Italia Holding and Duferco Sertubi (C-746/23 and C-747/23), concerning two preliminary ruling requests referred by the Consiglio di Stato (Council of State).
The referrals arise from the disputes between Cividale SpA and Flag Srl, in Case C-746/23, and Duferco Italia Holding SpA and Duferco Sertubi SpA, in Case C-747/23, and the Italian Ministry for Economic Development (MISE).
The questions raised dealt with the legality of MISE’s decisions to authorise reduced financial contributions for Cividale and Flag and Duferco Sertubi under a foundry sector rationalisation program, compared to the initially provisional amounts.
The CJEU considered that the financial contributions constituted an economic advantage, which the recipient undertakings could not have obtained under normal market conditions. Moreover, it found that the recipients of the financial contributions were ‘undertakings’ within the meaning of Article 107(1) TFEU.
In response to the preliminary questions, the CJEU concluded that Article 107(1) TFEU should be interpreted as meaning that financial contributions under a rationalisation program for the iron and steel foundry sector, which cover up to 100% of the value of dismantled production installations or a discounted contribution to fixed costs, confer an advantage which is liable to affect trade between Member States and competition, provided the benefit could not be obtained under normal market conditions and effective competition exists in the market.
For more information, see the CJEU’s judgment.