(2004/C58E/033) WRITTENQUESTIONE-0847/03
byJanAndersson(PSE)totheCommission
(18March2003)
Subject:ClosureoftheAsarumplantasaresultofgovernmentaid
Acommoninternalmarketisbasedonopenandfaircompetitionbetweenthecompaniesoperatingin
thatmarket.Itisforthisreasonthatgovernmentaidtocompaniesisallowedonlyinexceptionalcases,themainrulebeingthatitmustnothavetheeffectofdistortingcompetition.Nevertheless,severalcaseshavecometolightovertheyearsinwhich governmentaidappearsclearlytohavedistortedcompetition.Judgingbythecircumstances,suchacasehasjustemergedinsouthernSwedenseveralyearsaftertheactualevent.In1996,acompanybelongingtoOutokumpuCopperTubesintheBasquecountryreceivedtheequivalent ofSEK57millioninaidfromtheSpanishGovernment.TheaidwasapprovedbytheCommission.Asaresultoftheaid,thefactoryatAsaruminSweden,havingthesameownerandsameproduction,wascloseddown,despitethefactthattheSwedishplantwasconsiderablymoreprofitablethantheoneintheBasquecountry.
1. DoestheCommissionactuallytaketheviewthatthistypeofgovernmentaid,withtheriskitentails
ofdistortingcompetition,isconsistentwiththelegislationapplicableonthecommoninternalmarket?
2. WhatcriteriadidtheCommissionapplyinmakingitsassessmentintheabovementionedcaseand
would the same assessment be made today in the light of the strategy for a general reduction andre-orientationofgovernmentaidbytheMemberStates,whichtheCommissionitselfisworkingintensivelytopromote?
AnswergivenbyMrMontionbehalfoftheCommission
(28April2003)
1. TheneedforacomprehensiveandfirmcontrolofStateaidintheUnioniswidelyacknowledgedin
ordertoensureamoreefficientoperationoftheinternalmarket.Indeed,thedistortiveeffectofaidismagnifiedasothergovernmentaldistortionsareeliminatedandmarketshavebecomemoreopenandintegrated.
ThebasicprincipleunderlyingtherulesonStateaidisthatitisincompatiblewiththecommonmarket.
However, exceptions may be made forlegitimate reasonsprovided that the impact ontrade and thedistortionofcompetitionwhichresultfromthegrantingofStateaidareoffsetbyanadequatecontributiontotheCommunity’sobjectivesorotherwisemitigatedasfaraspossible.
Inthissenseandinordertoensurealevelplayingfieldforallfirmswithintheinternalmarket,the
CommissionhasadoptedruleswhichexplainthecriteriabywhichitassessestheStateaidcases.
AstothespecificStateaidcasetowhichtheHonourableMemberrefers,itconcernsaidthathadbeen
granted by the Basque Government in support of the restructuring plan of Outokumpu Copper SA,a subsidiary of the Finnish based company Outokumpu Copper OY. The Commission considered itcompatiblewiththecommonmarketbyDecisionadoptedon20December1995.
TheCommissionnotesthatitwasonlyin1998that,inordertoimprovetheprofitabilityofitstubemills
operations,OutokumpudecidedtomovethetubeproductionoftheGraneforsPlantinSwedentoPori
(Finland)andZaratamo(Spain)(
1).Therefore,thelinkbetweentheclosureoftheSwedishplantin1998
andtheaidgrantedbytheBasqueGovernmentpriorto1995doesnotappeartobestraightforward.Moreover,therestructuringplanofthecompanyresultedintheclosureofanotherplantinSpain.
2. In assessing the above mentioned aid, the Commission applied the criteria contained in the
CommunityguidelinesonStateaidforrescuingandrestructuringfirmsindifficulty(
2)inforceatthetime.C58E/30 EN6.3.2004 OfficialJournaloftheEuropeanUnion
TheCommissiontooknamelyintoaccountthattherestructuringplanservedtorestorethelongterm
viability and health of the firm which had been making losses. Furthermore, the Commission alsoconsideredthattheaidedrestructuringprogrammeincludedmeasureswhichoffsetunduedistortionsofcompetition:itentailedthedefinitiveclosureofthecopperwireandtubefacilitiesofthecompany’splantlocatedinCordoba.Thisresultedinasignificantnetreductionof8000tonnesperannumintheoverallproductioncapacityofthecompanyand,therefore,madeasignificantcontributiontotherestructuringofthecopperindustryintheCommunity,whichwasaffectedbyastructuralexcessofproductioncapacity.Finally, the Commission took also into account that the aid would help to overcome the structuralproblemsoftheregionwheretheplantislocatedbycreatingsixtynewjobsandassuringaneconomicallyviablebusiness.
On9October1999theCommissionpublishednewguidelinesonStateaidforrescuingandrestructuring
firms in difficulty(
3) which in principle are in force until October 2004. These new guidelines have
tightenedtherulesnamelyasfarastheeligibilityofthefirmsforaidisconcerned.TheCommissiondoesnothavealltherelevantinformationthatwouldbeneededtoassesstodaywhetherthecompanycouldbeconsideredafirmindifficultyforthepurposesoftheapplicationoftheguidelines.
(1) Source:Company’sannualreport.
(2) OJC368,23.12.1994.
(3) OJC288,9.10.1999.
(2004/C58E/034) WRITTENQUESTIONE-0859/03
byRobertaAngelilli(UEN)totheCommission
(20March2003)
Subject:RequestforclarificationaboutfundingobtainedbytheCityofFrosinone
InconnectionwiththeallocationofEuropean fundinganumberofItaliandailynewspapersrecently
reportedthattheCityofFrosinonehasreceivedEUfundingamountingtoEUR30billiontocarryoutprojectsofvariouskinds.
ThesereportscontradictotherdataaccordingtowhichanumberofItaliancities,includingFrosinone,find
itdifficulttomaketheefforttoobtainthefundingavailabletothem,whichtheCommissionhasoftenpointedoutremainsunused,eventhoughitismuchneeded.
SuchdataincludetheCommission’sanswerstoquestionsE-3433/02(
1),E-3427/02(2),E-3429/02(3)and
E-3431/02(4)ontheuse,bythemunicipalityofFrosinone,ofthefollowingfunds:URBANII,Daphne,
EQUAL,theESFandtheFourthActionProgrammeonEqualOpportunitiesforWomenandMen,SAVEIIandAltenerII.
AlltheCommissioners’answersindicatethatthemunicipalityofFrosinonehasnotsubmittedprojectsfor
anyoftheprogrammesmentioned.
Inviewofallthis,cantheCommissionclarifythesituationwithregardtotheactualuseofEuropean
fundingbythemunicipalityofFrosinone?
(1) OJC137E,12.6.2003,p.207.
(2) OJC222E,18.9.2003,p.70.
(3) OJC137E,12.6.2003,p.206.
(4) OJC155E,3.7.2003,p.153.6.3.2004EN C58E/31 OfficialJournaloftheEuropeanUnion