EU: Italy must recoup 84 million euros from troubled Ilva steelworks

Brussels (dpa) - Italy must recoup around 84 million euros (99.9 million dollars) in illegal state aid from its Ilva steelworks, the European Unionlsquo;s executive said following an inquiry into government efforts to keep the struggling company afloat. The EU is the second-largest steel producer in the world, generating more than 177 million tons every year at 500 production sites in 23 member states. The sector has been hit by worldwide overcapacity and stiff global competition from countries such as China.Ilva, which ArcelorMittal plans to take over, provides thousands of jobs in and around the city of Taranto, a high-unemployment area of southern Italy.EU rules do not allow governments to artificially keep struggling steel manufacturers afloat. "The best guarantee for a sustainable future of steel production in the Taranto region is the sale of Ilvalsquo;s assets at market terms," EU Competition Commissioner Margrethe Vestager said Thursday, noting that the steelworks could survive "in the right hands."The European Commission took issue with two loans, totalling 700 million euros, that were granted "on terms below market conditions." Ilva must now repay the difference between the cost of the state loans and the interest it would have paid on the open market. The EU executive approved three other support measures, including a transfer of more than 1.1 billion euros from Ilvalsquo;s owners to the company to tackle serious environmental damage caused by the Taranto plant."This essential de-pollution work should continue without any delay to protect the health of Tarantolsquo;s inhabitants," the commission said.