No C 52/10 Official Journal of the European Communities 3. 3.90 
STATE AID 
NN 27/89 and 140/89 
(Federal Republic of Germany) 
(Articles 92 to 94 of the Treaty establishing the European Economic Community) 
(90/C 52/04) 
Commission communication pursuant to Article 93 (2) of 
the EEC Treaty to other Member States and interested 
parties concerning aids which Germany has decided to 
grant in the form of two guarantees on loans for Schiffs-
werft Germersheim. 
By verbal notes of 20 March 1989 and 9 May 1989 from 
the German Permanent Representation in Brussels, the 
German Government notified two State aids in favour of 
the Schiffswerft Germersheim in bankruptcy. 
Supplementary information was supplied by the German 
Government by verbal notes of 28 July 1989, 4 August 
1989 and 11 October 1989. 
Since the two aids both concern guarantees on credits 
for working capital for the Schiffswerft Germersheim, 
they are treated as one case. 
In March 1988 the Commission approved a development 
aid project concerning the construction of a special 
purpose ferry by Schiffswerft Germersheim (N 66/88) 
for Senegal. Due to the insolvency of the yard a 
statement of bankruptcy was issued in January 1989. The 
first aid consists of a 90 % guarantee on a loan for 
working capital of DM 1 800 000 issued by the Federal 
Minister of Finance on 7 December 1988 which served 
the purpose of allowing the yard, then in financial diffi­
culties, to complete a non-specified vessel to be delivered 
in May 1989. Since the KfW credit for Senegal only 
becomes operative after delivery of the vessel under the 
development contract has taken place, Schiffswerft 
Germersheim apparently needs further working capital 
during the building process of that vessel. Against this 
background the Land Rheinland-Pfalz plans providing a 
95 % guarantee on a loan of DM 20 700 000. 
The German Authorities have claimed for different 
reasons that neither of the guarantees are to be 
considered as operational aid to be examined under the 
common maximum aid ceilings of the Sixth Council 
Directive on aid to shipbuilding of 26 January 1987. The 
Commission does not accept this point. 
The first guarantee on the loan of DM 1 800 000 was 
notified only in March 1989 and the notification was 
subsequently withdrawn in August 1989. The fact that 
the construction of the ship for which the loan guarantee 
was needed was finalized in May 1989 without the guarantee having to be called in does not prevent this aid 
from being considered as an operational aid. If the noti­
fication had been made before the aid project had come 
into effect the Commission would have counted the 
grant element contained in the guarantee under the 
prevailing aid ceilings. Therefore, a withdrawal of the 
notification at a time when after the delivery of the ship 
the State guarantee had served its purpose does not 
change that fact. 
The German Authorities' argument that the second 
guarantee has to be considered as development aid not 
counting under the aid ceiling according to Article 4 (7) 
of the Directive cannot be accpeted by the Commission. 
Firstly, this aid was not part of the development aid 
notified to the Commission and approved by it in its 
letter SG(88)D/02851 of 9 March 1988. Secondly, the 
guarantee might well assist the yard in fulfilling its obli­
gations under the contract with the Senegalese 
Government for the construction of the special purpose 
ferry. However it is not primarily a development 
assistance to the Senegalese Government but an 
assistance to keep the yard in bankruptcy operating. 
There is no doubt that the yard without this guarantee 
would not have found the means to finance the further 
operation of the yard. Therefore this aid also has to be 
considered as operational aid under Article 5 of the Sixth 
Directive. 
Therefore both guarantees are to be considered under 
the provisions of Article 5 of the Sixth Directive on aid 
to shipbuilding in which it is stated inter alia that aids to 
facilitate the continued operation of shipbuilding and 
shipconversion companies may be deemed compatible 
with the common market provided that such aid together 
with other direct production aid does not exceed the 
comon aid ceiling of that Directive. However the 
Commission, due to the lack of sufficient information on 
the nature of the shipbuilding activities of the yard 
before, during and after the bankruptcy period, is not in 
a position to assess to what extent the aid concerned 
serves inland shipbuilding or the construction of 
seagoing vessels and if the latter, which activities other 
than the Senegal development contract are concerned. 
Given the present Community policy of controlling and 
reducing capacity of the inland fleet, an aid to allow a 
single yard to continue its operation distorts competition 
as regards the operation of other yards which have to 
meet the same restrictions from the market, and 
therefore such aid may be deemed incompatible with the 
3. 3. 90 Official Journal of the European Communities No C 52/11 
common market. Rescue aid for building 6f seagoing 
vessels has, under the Sixth Directive, to be measured 
and assessed on the turnover of merchant shipbuilding 
except such turnover arising from shipbuilding as falls 
under Article 4 (7) of the Sixth Directive. 
The Commission therefore has decided to initiate the 
procedure provided for in Article 93 (2) of the EEC 
Treaty concerning: 
1. the 90 % federal guarantee on a loan of DM 
1 800 000 for Schiffswerft Germersheim; 
2. the 95 % State guarantee on 
20 700 000 for the same company. a loan of DM 
The Commission regrets that the German Government 
has put into effect the first guarantee without prior noti­
fication to the Commission. It hereby draws the German 
Government's attention to the fact that Article 93 (3) of the EEC Treaty lays down that aid cannot be put into 
effect until the Commission has adopted its final 
position. 
The Commission hereby gives the German Government 
notice, as part of that procedure, to submit its comments 
within one month from the date of this letter. 
The Commission hereby gives the other Member States 
and interested parties notice to submit their comments on 
the measures in question within 20 days from the date of 
publication of this notice to: 
Commission of the European Communities, 
200 rue de la Loi, 
B-1049 Brussels. 
The comments will be communicated to the Federal 
Republic of Germany. 
Amendment to the list of spirituous beverages in Annex II to Council Regulation (EEC) 
No 1576/89 ('), the minimum alcoholic strength of which as determined by national laws is 
higher than the values laid down in the Community regulations for the category to which they 
belong 
(90/C 52/05) 
Published pursuant to Article 3 (2) of Regulation (EEC) No 1576/89 
(Official Journal of the European Communities No C 1 of 4 January 1990, page 14) 
The list is supplemented by: 
'PORTUGAL 
Category 
Grape marc spirit Designation 
(in accordance with Annex II to 
Regulation (EEC) No 1576/89) 
Bagaceira do Minho Minimum alcoholic 
strength 
40 % vol Legal basis 
Decree-Law No 390/86 
of 21. 11. 1986' 
C) OJ No L 160, 12. 6. 1989, p. 1.