Press Release: State aids: Commission declares compatible the aid linked to stranded costs in the energy sector in Italy

The European Commission decided on 1 December 2004 that the grants given by the Italian authorities to the energy sector to cover stranded costs linked to the liberalisation process were compatible with EC Treaty state aid rules. These rules require that state aids should not distort or threaten to distort competition to an extent contrary to the common interest. Stranded costs are costs which were incurred by companies before the liberalisation of the electricity sector but are impossible or very difficult to recover due to the effects of the liberalisation.