Persistent problem with Italy's legal system: EU antitrust body

Italy repeatedly fails to recover illegal state aid due to a "persistent problem" with its legal system, the European Commission's antitrust authority said on Friday, as it brought the Italian government in front of the European Court of Justice (ECJ), DPA reported.

The commission - which polices the single market and is the highest competition authority in the EU - often orders the bloc's member states to recover aid which it deems was illegally granted to firms.

But in Italy's case, firms who are asked by the government to give the money back appeal to local courts, which "in many cases (suspend) the execution of the recovery orders," a commission statement said.

"This is a persistent problem in the Italian legal system," the EU executive added.

The latest case, which highlighted the difficulty, concerns aid given to hotel owners in the tourist area of Sardinia in the late 1990s.

After it emerged that some hotels started renovation work before public subsidies for it were approved - in violation of the terms agreed with the EU - the commission concluded in 2008 that the money had to be given back.

But Italian authorities have not gone beyond issuing recovery orders, which hotels owners managed to thwart by obtaining a suspension order at a local court.

According to Brussels, "such suspension decisions are clearly contrary to EU law that requires effective, timely and full recovery of incompatible aid from the beneficiaries."

One of the founding principles of the EU is the supremacy of its law vis-a-vis national juridisdiction.

The same legal obstructions to the enforcement of state aid recovery decisions emerged in at least four other Italian cases that were already referred to the ECJ, the commission stressed.

The Italian justice system is often criticized for its labyrinthine workings, which lead to lengthy proceedings. Its reform is at the center of political debate, with Silvio Berlusconi's government determined to tackle the problem.

But critics argue that measures proposed are mainly targeted at ending legal problems for Berlusconi, who is currently facing two trials for alleged tax evasion and for allegedly bribing a British lawyer to testify in his favour.