The European Court of Justice (“ECJ”) judgment of October 16, 2013 ruled that Italy had not respected its obligation to recover the State aid granted to Alcoa, an undertaking producing primary aluminium.

The undertaking had benefited since 1996 from a preferential electricity tariff for two of its sites. The Commission had initially authorized the tariff, having found that it did not qualify as State aid. However, the tariff was later modified twice with no regard for changes in the market, causing the Commission to reverse its initial finding. It then enjoined Italy to recover the 295 million euros of State aid granted to Alcoa, with interest, before March 20, 2010. However, as Italy failed to recover the full amount of the aid in the time allowed, the Commission then initiated an action before the ECJ for failure to fulfil an obligation. In its October 16, 2013 judgment, the ECJ recalled that the only defence argument on which a Member State can rely to justify its failure to enforce a decision to recover aid is its absolute impossibility to enforce the decision properly. The Court emphasized that the existence of legal or practical difficulties in enforcing the Commission’s decision, however real they may be, or the desire to reach a negotiated solution with the beneficiary, could not be characterized as such. It therefore found that Italy had failed in its obligation to recover the aid immediately and effectively. Italy will now have to enforce the Commission’s decision as promptly as possible, otherwise the Commission could initiate a further action seeking monetary sanctions against Italy.