11. 11. 97 Official Journal of the European Communities L 306/25 COMMISSION DECISION of 30 April 1997 concerning the application to the steel firm Ferdofin Srl of Italian Law No 95/1979 on receivership arrangements for large firms in crisis (Only the Italian text is authentic) (Text with EEA relevance) (97/754/ECSC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Coal and Steel Community, Having regard to Commission Decision No 2496/96/ ECSC of 18 December 1996 establishing Community rules for State aid to the steel industry ('), and in particular Article 6 (5) thereof, Having given interested parties notice to submit their comments (), and having regard to those comments, Whereas: By letter dated 22 March 1996 the Commission informed the Italian authorities of its decision to initiate pro- ceedings under Article 6 (4) of Commission Decision No 3855/91/ECSC (replaced with effect from 1 January 1997 by Decision No 2496/96/ECSC) in respect of the applica- tion of Italian Law No 95/1979 on receivership arrange- ments for large firms in crisis, known as the Prodi Law (hereinafter ‘Law No 95/1979’), to Ferdofin Siderurgica Srl (hereinafter ‘Ferdofin’). According to the Commission’s information, based essen- tially on what was communicated by the Italian author- ities, it was apparent that: 1. Ferdofin was in a very difficult financial situation; the firm’s balance sheet as at 30 June 1994 and its profit and loss account showed that: (i) its cumulative losses totalled Lit 251,6 billion; (ii) there was, in relation to a capital of Lit 80 billion, a deficit on own funds of Lit 170,9 billion; (iii) medium- and long-term debts and debts towards credit institutions totalled Lit 526,5 billion, compared with assets of Lit 429,5 billion, much of which was already mortgaged; 2. in view of the foregoing, Ferdofin had, by Ministerial Decree of 28 December 1993, been placed under the procedure provided for in Law No 95/1979, which, () OJ L 338, 28. 12. 1996, p. 42. () OJ C 151, 25. 5. 1996, p. 10. among other things, enabled the firm’s debts to be frozen, including those contracted with public credit institutions; 3. given Ferdofin’s financial situation, it had not been able to obtain any funding from private banks without a public guarantee. On the basis of these facts, the Commission had serious doubts as to whether the aid in question, granted under Law No 95/1979, was compatible with the common market. It therefore decided to initiate proceedings under Article 6 (4) of Decision No 3855/91/ECSC in respect of the application of Law No 95/1979 to Ferdofin. I As part of the proceedings, the Commission invited the Italian Government to submit its comments, and informed the other Member States and interested parties by publishing the decision initiating the proceedings (). In letters dated 24, 25 and 26 June 1996, the United Kingdom Government, Wirtschaftsvereinigung Stahl, Siderinsa and BISPA (the British Iron and Steel Producers Association) sent comments to the Commission, which forwarded them to the Italian authorities on 1 August 1996. In their comments, all the above third parties expressed support for the Commission’s decision to initiate pro- ceedings. They argued in particular that Law No 95/1979 constituted by definition State aid in that it enabled the Italian State, through discretionary powers conferred on the Minister for Indusry, to intervene to save firms under- going an extremely serious financial crisis. Since the measures concerned contravened Article 4 (c) of the ECSC Treaty, the third parties concerned called on the Commission to rule them incompatible with the common market for coal and steel. In response to the initiation of the procedure and to the comments from the other interested parties, the Italian Government put forward the following arguments (points 1 to 9 below): (*) See footnote 2.