Council of State, Plenary Assembly, 9 November 2021, nos. 17 and 18

The President of the Council of State, to resolve the issue concerning the interpretation of the legislative extension of concessions for tourist-recreational purposes, submitted to the Plenary Assembly two appeals on disputes concerning the rejection of requests for extension of such concessions, but for which the decisions of the first instance had had opposite results (see: T. A. R. Puglia, Lecce, section I, 13 January 2021 no. 73 and T. A. R. Sicilia, Catania, 15 February 2021 no. 504).

The core of the matter concerns, specifically, the need or not, in light of European law and in particular of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 (the so-called Bolkestein Directive), to proceed, once the concessions have expired, to the identification – by means of the public evidence procedure - of the new concessionaire (in this sense, see EU Court of Justice, section V, 14 July 2016, C-458/14 and C-67/15).

As mentioned, the case originates from an appeal - originally submitted to the Regional Administrative Court of Puglia - whereby the resolution of the Municipality of Lecce rejecting the request for the automatic extension of a concession was declared unlawful, as it was clearly in conflict with national law, considering that the Bolkestein Directive was not self-executing. On the other hand, the subsequent decision of the Regional Administrative Court of Sicily affirmed the EU principle that public procedures must be used to award concessions on the maritime domain.

In the twin judgments, the Plenary Assembly addressed the following questions of law raised in the appeal against the aforementioned judgments: (i) whether or not the national legislature is obliged to disapply state or regional laws that provide for automatic and generalised extensions of concessions on the State's maritime domain for tourism and recreational purposes; (ii) if so, whether, in order to comply with this disapplication obligation, the local authority is required to review the measure in question; and (iii) regarding the moratorium introduced by article 182, paragraph 2, of decree-law no. 34 of 19 May 2020, whether "areas subject to concessions at the date of entry into force of the law converting this decree" should also be understood to include areas subject to concessions that had expired when the moratorium came into force.

In the opinion of the Plenary Assembly, it is first of all necessary to clarify that "the national legislative provisions which have provided for (and which in the future should still provide for) the automatic extension of concessions on state maritime property for tourism and recreational purposes - including the moratorium introduced in relation to the Covid-19 epidemiological emergency by art. 182, paragraph 2, decree-law no. 34/2020, converted into law no. 77/2020 - are contrary to European Union law, in particular Article 49 TFEU and Article 12 of Directive 2006/123/EC. Those regulations, therefore, must not be applied either by the court or by the public administration."

Secondly, it was observed that "even in the presence of acts of an extension issued by the public administration (and even in cases where these were issued following a favourable decision or were, in any event, the subject of a favourable ruling) the existence of a right to the continuation of the relationship on the part of the current concession holders must be excluded".

Finally, the Supreme Court of Administrative Justice held that the extension of the concessions was not necessary to “contain the economic consequences of the epidemiological emergency”, since there was no reasonable link between the extension of the concessions and the economic consequences of the pandemic (as the Commission pointed out in its most recent letter of formal notice, according to which “the repeated extension of the duration of the bathing concessions provided for by the Italian legislation discourages [. ...] investment in a key sector for the economy of the European Union') the Italian economy, which is already suffering acutely from the impact of the COVID-19 pandemic. By discouraging investment in leisure and beach tourism services, current Italian legislation prevents, rather than encourages, the modernisation of this important part of the Italian tourism sector. Modernisation is further hindered by the fact that the Italian legislation effectively makes it impossible for new and innovative service providers to enter the market”).

In conclusion, the Plenary Assembly established the principle that further extensions of concessions for tourist-recreational purposes shall be considered incompatible with the European Union law and, therefore, unproductive, with the specification that "to avoid the significant socio-economic impact that would result from an immediate and generalized forfeiture of all existing concessions, [...] the concessions for tourist-recreational purposes already in place shall continue to be effective until 31 December 2023, without prejudice to the fact that, after that date, even in the absence of a legislative framework, they shall cease to be effective,  notwithstanding any further legislative extension that might intervene in the meantime, which would be considered ineffective because in contrast with the rules of the EU legal system".