The European Commission has decided to refer Italy to the European Court of Justice (ECJ) for failure to implement an April 2004 judgment confirming a 1999 Commission decision that ordered the recovery of illegal State aids granted by Italy in the form of exemptions from social security contributions.

In its 1999 decision, the Commission found that part of the aid granted by Italy was incompatible with the Single Market. In 2004, the ECJ ruled that Italy had not taken the measures necessary for the recovery of the aid. To date, Italy has recovered only 20 per cent of the total aid, estimated at about EUR 281 million.

The Commission has requested sanctions on Italy's infringement comprising daily penalty payments and a lump sum payment covering the period since the Court's previous judgment in 2004.