14. 1. 87 Official Journal of the European Communities No L 12/27 COMMISSION DECISION of 23 April 1986 on a proposal by the Italian Government to grant aid to a firm in the chemlcal industry (producing industrial auxiliaries, intermediates and pesticides) (Only the Italian text is authentic) (87/16/EEC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in particular the first subpara- graph of Article 93 (2) thereof, Having given notice, in accordance with the above Article, to interested parties to submit their comments, and having regard to those comments, Whereas : By letter dated 7 January 1985, the Italian Government notified the Commission, as required by Article 93 (3) of the EEC Treaty, and in accordance with the Commission Decisions of 11 July 1983 and 2 August 1985 on Law No 46/82 (Innovation Fund), of a proposal to grant aid under the said Law for a programme relating to innovation in the field of finished and intermediate products in the fine chemicals sector. The programme involves research, development and experimentation for new processes and products in the field of industrial auxiliaries, intermediates and pesticides. The cost of the programme comes to Lit 30 399 million. The proposed aid would take the form of a low-interest loan of Lit 12 958 million, which corresponds to 42,6 % of the programme’s cost. With a reference rate of 17,13 %, the cost of the loan amounts to 2,57 % during the first five years and 10,27 % during the following 10 years. The net grant equivalent may be estimated at approximately 11 % of the programme’s cost. Law No 46/82 of 17 February 1982, published in the Gazzetta Ufficiale della Repubblica Italiana No 57 of 27 February 1982, established in its Articles 14 to 19 a ‘Fondo Speciale rotativo per l'innovazione technologica’ having as its object the promotion of programmes aimed at bringing about technological advances centred on new products or production processes or on the improvement of existing products or production processes. The Fund provides support at the design stage of programmes and at the experimental, development and pre-production stages in the form of low-interest loans of up to 55 % of the programme cost, granted for 15 years with a five-year suspension of principal repayment. The rate of interest payable on such loans is 15 % of the reference rate during the first five years and 60 % of the reference rate during the next 10 years. Taking as a basis a reference rate now fixed at 17,13 %, the cost of the loans amounts to 2,57 % during the first five years and 10,27 % during the following 10 years. A non-repayable grant may be awarded, where appropriate, instead of all or part of a low-interest loan. Aid given under the Fund may not be combined with other aid for the same programme. By letter dated 11 July 1983, and more recently by letter sent on 2 August 1985 concerning the reconstitution of the Fund, the Commission approved the implementation of Law No 46/82. It took the view that, in the case in point, the encouragement of research and innovation programmes as provided for in the Law can be in the Community’s interest, on condition that the aid is not granted for productive investments and that an excessive concentration of the aid in question on certain sectors is avoided as it might affect trade between Member States to an extent contrary to the common interest. The Commission also made its authorization of the implementation of Law No 46/82 subject to the condition that significant individual cases, that is to say those where the cost of the programme exceeds Lit 15000 million (10 000 million if the programme is carried out by a firm which has already received support from the Fund for another programme), should be notified to it in advance, pursuant to Article 93 (3) of the EEC Treaty, since it was not possible for the Commission to ascertain on the basis of Law No 46/82 alone whether operations were actually involved which (a) were of an innovative nature, (b) did not concern the production cycle, and (c) contributed to the attainment of an objective of value to the Community as a whole. The Commission reserved the right to examine each significant case on its merits in the light of the above factors and having regard to the effects of the aid in question on the competitive position of firms in the sectors concerned within the meaning of Article 92 (3) of the EEC Treaty. After an initial examination of the aid proposed, notified by the Italian Government by letter dated 7 January 1985, the Commission came to the conclusion that it could not be considered compatible with the common market.