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The objective of preserving employment cannot justify unlawful aid

(B2) The European Court of First Instance rejected, on September 11, the action of the Brandt company and the Italian government challenging a Commission decision annulling an Italian measure aimed at helping large companies (more than 1000 employees) in trouble. A measure which in fact was above all intended to facilitate the takeover of the Ocean company by Brandt Italia (judgment of the 12 September, Brandt, T-239/04).

According to the Commission, this measure constituted in fact illegal State aid which had to be canceled (and the aid reimbursed to the Italian State): it gives certain specific categories of companies — the purchasers of companies in difficulty — an economic advantage, by reducing their normal costs and strengthening their financial situation compared to other competitors who do not benefit from the same regime; 2° it is granted by means of public resources — non-refundable public funding and reductions in social charges —; 3° it affects trade between Member States.

The Court rejects all the arguments of the plaintiffs (Brandt and the Italian State). On the one hand, it is indeed state aid. On the other hand, the fact that "the measure in question aims to safeguard employment has no effect on its qualification as State aid"; Article 87(1) EC "does not distinguish State interventions according to their causes or their objectives, but defines them according to their effects".


Nicolas Gros Verheyde

Chief editor of the B2 site. Graduated in European law from the University of Paris I Pantheon Sorbonne and listener to the 65th session of the IHEDN (Institut des Hautes Etudes de la Défense Nationale. Journalist since 1989, founded B2 - Bruxelles2 in 2008. EU/NATO correspondent in Brussels for Sud-Ouest (previously West-France and France-Soir).