EU Court fines Spain 30 mn euros for failing to recover unlawful aid

LUXEMBOURG: The European Union's highest court on Tuesday slapped a fine of 30 million euros ($41.2 million) on Spain for failing to recover illegal state aid.

The European Court of Justice found that Spain had not correctly complied with a 2006 judgement, in which it had been ordered to recover the aid granted to businesses in the northern Basque Country area.

In justifying the size of the fine, the Luxembourg-based Court found the aid had been "particularly harmful to competition by reason of the size of the amount ... and the high number of recipients."

The European Commission, the EU's executive arm, is demanding the repayment of a lump sum of around 65 million euros ($89 million) which it believes is still owing on the recovery of the aid.

Authorities of the three provinces of Alava, Vizcaya and Guipuzcoa granted the aid in the 1990s, in the form of tax cuts and a 45 percent tax credit for investment.

In 2001, the Commission found the aid to be incompatible with EU internal market rules and ordered Spain to end the scheme and recover the money granted.

When the Commission determined the provinces had not fully repaid the funds it took legal action in the Court of Justice, which in 2006 ruled Spain had failed to fulfil its undertakings with the Commission.