I. Greece

The sanction applied by the Commission on Greece highlights two of the main pitfalls of State Aid – that failure to notify the Commission in advance automatically creates trouble, and if there is tax trouble, then the taxpayer, not the State, pays.

According to the EU statement:

• The European Commission has decided under EC Treaty state aid rules that tax breaks granted under Greek Law 3220/2004 are incompatible with the Single Market and need to be recovered from the beneficiaries. Under the Law, approximately €200 million of incompatible aid has been given to thousands of companies. Article 2 of Greek Law 3220/2004 reduced the tax base of companies in certain specific sectors by 35% of their profits, thus giving them an unfair advantage. The sectors included among others the production of textile materials and basic metals, manufacturing, energy production, mining, intensive agriculture and fishery and certain tourism activities. The measure was never notified to the Commission and is therefore illegal. Based on its in-depth investigation, the Commission has now decided that the aid is also incompatible with EC Treaty state aid rules (Article 87) because it distorts competition and trade between Member States and that the Greek authorities must recover the aid, plus interest, from the beneficiary companies.

II. Italy

The European Commission has decided that subsidies for equipment for the reception of digital television granted by Italy in 2007 are in compliance with EC Treaty state aid rules. The Commission's investigation concluded that tax deductions worth up to €40 million are technology-neutral and proportionate to the objective of promoting the transition to digital TV and to interoperability.

According to the Commission press release, it supports the transition to digital broadcasting in line with its 2003 and 2005 Communications as long as the state support measures are compatible with the state aid rules.