It is for Italy to assess whether a possible bridge loan to the former Ilva steelworks in Taranto to keep it operational in the event that it goes into extraordinary administration constitutes State aid and notify the European Commission (EC) accordingly, an EC spokeswoman said on Friday.
"It is up to a Member State to assess whether a specific measure constitutes state aid, and should it constitutes state aid under EU law it must be notified to the Commission for prior assessment," the spokeswoman said.
The struggling plant now called Acciaierie d'Italia (ADI) faces receivership after Franco-Indian giant ArcleorMittal, which currently owns a 62% stake in southern Italy's single biggest employee directly and indirectly, refused to increase its investment in it.
The Italian state currently holds the other 38% through the government investment agency Invitalia.
The government is said to be preparing a bridge loan of over 300 million euros to keep it operating if the extraordinary administration procedure is started.
On Thursday union sources reported that Invitalia had sent a letter to the CEO of ADI asking that the company be admitted to the extraordinary administration procedure.
The CEO has 14 days to respond.
If he fails to do so, Invitalia can ask the Business and Made in Italy Ministry to activate the extraordinary administration.
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