WRITTEN QUESTION P-2449/00

by Ulrich Stockmann (PSE) to the Commission

(11 July 2000)

Subject: State aid notification procedures in the new Länder of the Federal Republic of Germany

At the beginning of June 2000, the SKL-M undertaking in Magdeburg, Saxony-Anhalt, Germany, was forced to file a petition in bankruptcy because MTU Friedrichshafen GmbH withdrew the take-over bid which it had made within the context of reprivatisation when it became known that the European Commission intended to include the planned asset deal in the formal investigation procedure. MTU GmbH was no longer prepared to wait the necessary time until the formal investigation procedure had ended. The bankruptcy petition directly endangers 275 jobs at SKL-M and 1 700 other jobs with SKL-M's suppliers.

As a result of the process of transforming the economy of the former GDR, there are 15 other notification procedures pending from the federal Land of Saxony-Anhalt alone, and more than 50 from all the new German Länder, including Berlin. According to my information, 30 000 jobs are at risk in the undertakings concerned, including their suppliers.

Can the Commission say what improvements it believes could be made to speed up the handling of the notification procedures and to ensure that in future the Commission's discretionary decisions, such as the decision to include the asset deal in the formal investigation procedure into SKL-M, are taken with a view to preserving jobs?

Answer given by Mr Monti on behalf of the Commission

(13 September 2000)

For almost ten years the new Länder have been undergoing economic reorganisation. The Commission has so far always shown a benevolent understanding for their special situation. It has also shown this through its unreserved support, particularly for the interests of the employees, notably through the European Social Fund.

This was expressed first and foremost through the creation of a special task force, which deals exclusively with state aid cases in the new Länder. Since it was set up it has processed more than 180 cases, of which 130 so far have had decisions in their favour given by the Commission, with only a dozen or so negative decisions.

Until 1996 there were special rules governing the scrutiny of this state aid, the so-called Treuhand regimes. These exempted undertakings in the new Länder from the notification requirement up to a certain threshold. In practice, the generous terms of these rules meant that few cases of planned aid had to be notified.

What is particularly important for assessing state aid cases in the new Länder are the guidelines for rescue and restructuring aid in favour of companies in difficulty.

The Commission's particular understanding for the interests of the new Länder can be seen particularly in cases in which a single undertaking is repeatedly awarded reconstruction aid under the so-called Auffanglösung, something which is normally unacceptable under the standard state aid rules. It should be noted that this more flexible procedure continues to exist also in the altered version of the guidelines for rescue and restructuring aid for 1999. However, a time limit was also set for this exception in view of the changed economic and political framework conditions in Germany.

The Commission is aware that the German authorities are concerned about the length of the procedure. However, the swift processing of a case also depends on the necessary information being made available promptly and being complete and accurate. If the Commission is to act rapidly, it is particularly important in the case of rescue and restructuring aid that the Member States should notify the planned aid and provide all the relevant information as soon as it is available. The Commission would be in a position to devote more resources to the notified cases if less time was spent on finding and dealing with state aid awarded by the Member States without notifying the Commission.

In the SKL-M case, the Commission would draw attention to the long history of the case, which has made it considerably more difficult to evaluate individual state aid measures. MTU had originally intended to buy the SKL-M shares as part of a second restructuring. This plan was subsequently discarded in favour of an asset deal. Because of the complexity and the particular circumstances of this case there was no other option except to initiate proceedings under Article 88(2) of the EC Treaty. The asset deal must be included in these proceedings, since it is impossible to conduct a separate assessment of the SKL-M restructuring plan. The Commission generally initiates a full investigation in cases in which it still has doubts, following the preliminary investigation, about the compatibility of the aid with the common market.