The European Commission is to take legal action against Italy over the alleged failure to collect levies from dairy producers for exceeding milk quotas.
Brussels said Italy exceeded its national quota every year from 1995 to 2009, with Rome paying the Commission the due superlevy amounts, which were worth EUR2.31bn (US$2.58bn).
However, the Commission said Italy has "clearly not taken appropriate measures to effectively recover the levy payable from the individual producers/dairies" despite repeated requests from Brussels.
"This undermines the quota regime and distorts competition with those producers who respected their quotas and those who have taken steps to pay their individual superlevy bills. As underlined by the Italian Court of Auditors, this is also unfair on Italian taxpayers," the Commission said.
Brussels estimates EUR1.75bn has still not been recovered. It recognised "part of this has been defined as lost or is covered by a 14-year staging plan" but claimed penalties worth EUR1.34bn are outstanding.
As part of its legal procedures, the Commission said it had sent Italy a formal notice in June 2013 and a "reasoned opinion" in July 2014.
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It added: "As Italy has shown no significant progress in the recovery, the case is now referred to the Court of Justice."