1999/672/EC: Commission Decision of 1 July 1999 on State aid which Spain is planning to implement in favour of Brilén SA (notified under document number C(1999) 2131) (Text with EEA relevance) (Only the Spanish text is authentic)
Date: 1999-07-01
Institutions: European Commission
Subjects: Spain, State aid, aid to industry, man-made fibre, textile industry

16. 10. 1999

EN

Official Journal of the European Communities

L 268/19

II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 1 July 1999

on State aid which Spain is planning to implement in favour of Brilén SA

(notified under document number C(1999) 2131)

(Only the Spanish text is authentic)

(Text with EEA relevance)

(1999/672/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community, and in particular the first subparagraph of Article
88(2) thereof,

Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof,

Having given interested parties notice, in accordance with the
abovementioned Articles, to submit their comments (1) and
having regard to those comments,

Whereas:

I. Procedure

(1)

(2)

By letter dated 2 December 1997, Spain notified the
Commission of a proposal to grant aid to Brilén SA, a
company located at Barbastro in the Autonomous
Community of Aragon (Brilén). By letter dated 22
December 1997, the Commission requested additional
information. The Spanish authorities responded by letter
of 12 February 1998.

By letter dated 4 May 1998 the Commission informed
Spain of its decision to initiate the procedure laid down
in Article 88(2) of
the
planned aid. Spain submitted its comments by letter of
10 June 1998.

the EC Treaty in respect of

(4)

(5)

(6)

(3)

The Commission Decision to initiate the procedure was
published in the Official Journal of the European Commu-

(7)

(1) OJ C 199, 25.6.1998, p. 12.

nities (1). The Commission invited interested parties to
submit their comments on the aid.

The Commission received comments from interested
parties. It forwarded them to Spain, which was given the
opportunity to react;
its comments were received by
letters dated 2 October 1998 and 20 May 1999.

On 27 October 1998 a meeting was held between the
Commission, the Spanish authorities and representatives
of the company. By letter of 29 October 1998 the
Commission invited the Spanish authorities to submit
further comments. The Spanish authorities responded by
letter dated 19 January 1999. By letter of 4 February
1999, the Commission requested clarification on certain
points. The Spanish Government replied by letter dated
9 April 1999.

II. Description of the aid

The recipient

Brilén belongs to the Samca group, also based in Aragon
and active chiefly in the mining, agriculture, chemical,
textiles, construction and other sectors. The group has a
total workforce of 4 000, with plants spread across the
whole of Spain and in other countries including France,
Italy and Argentina. Brilén has a workforce of 266 and
in 1996 generated turnover of ESP 6 059 million.

Brilén produces and processes polyester and, as part of
its activities in the textiles sector, has two product lines:
polyester textile filament yarn and PET/staple fibre. The
raw material for the manufacture of these products is

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supplied by the company's in-house polymerisation
plant (32 000 tonnes per year). Its extrusion capacity for
textile yarn of 19 370 tonnes per year determined the
maximum combined output of the two end-products.

(8)

Output in 1994 was 7 554 tonnes of filament yarn and
6 546 tonnes of PET/staple fibre,
i.e. an extrusion
capacity utilisation rate of 73 %.

(16)

(9)

[...] (*)

(10) Given the obsolescence of its production technology and
the poor health of the market in staple fibre, a business
plan was implemented over the period 1992-96 in order
to bring production into line with new market require-
ments. Consequently, the PET/staple production line was
dismantled and the company focused on the production
filament yarn
of
i.e.
before the Investment (1997) was 9 987 tonnes,
52 % of total extrusion capacity.

filament yarn. Total production of

(11)

(12)

(13)

(14)

in bobbins;

The polyester filament yarn line produces continuous
filament yarn presented in cops; spin-draw yarn (SDY)
presented
yarn (DWY)
presented in bobbins; pre-oriented yarn (POY) presented
in bobbins; and warped and sized yarn presented in
beams. The market for the intermediate products man-
ufactured by Brilén is the textiles industry, including the
garment, hosiery and decoration sectors.

draw-winder

The company exports about 30 % of its output to other
Member States and about 5 % to the rest of the world, a
pattern which is not expected to change significantly
after the completion of the project.

The Spanish authorities stressed that the company acts
as a major driving-force in the regional economy, both
through its own business activity and through the
indirect employment it generates.

The project

stated that

exclusively to the

The Spanish authorities
the investment
project was to be carried out between 1997 and 1998
technological
and would relate
rationalisation and upgrading of
the polyester yarn
production plant. While polymerisation capacity was to
remain the same (32 000 tonnes), extrusion capacity for
continuous filament yarn would increase from 9 500
tonnes per year to 11 500 tonnes, with an equivalent
reduction in PET/flock production from 22 500 tonnes
to 20 500 tonnes. Nominal
textile yarn production
capacity was to remain unchanged at 19 370 tonnes per
year. Thus, after the project, the capacity utilisation rate
was expected to be 59 %.

(15) According to the Spanish authorities,

the combined
capacity for these products will not change following the
investment.
Instead there will be a reorientation of
production with a switch from staple fibre, for which
the prospects are disappointing owing to the evolution

(*) Business Secret

of customers' quality and cost requirements, to polyester
textile filament yarn, for which the market prospects are
more promising.

The investment is to cover four areas of production and
concerns chiefly the purchase of new machinery,
including a spinning line to produce spun dyed yarn, a
draw winder draw-twisters and draw-warping lines. It
will also include construction works and other ancillary
installations, including electricity, steam, compressed air,
air conditioning, internal transport, control equipment
and safety systems. The company's intention is to opt
for a new technology which allows a high degree of
intermingling of the yarn filaments. This will improve
the company's competitiveness and reduce pollution in
the subsequent texturing processes. The company will
thus be able to increase its market share in polyester
yarn in its different presentations (bobbins, cops and
beams) by entering the medium-high price markets. The
project will begin to reverse the effects of the policy of
abandonment and disinvestment in this sector in Spain
which the main European producers have been pursuing
over the last decade, in favour of their own domestic
plants. As a result of the project 25 new jobs will be
created.

(17) While 40 % of the planned investment will relate to
activities falling outside the scope of the Code on aid to
the synthetic fibres industry (1)
(the Synthetic Fibres
Code), the scope and provisions of which have period-
ically been amended, most recently in 1999 (2), namely
the drawing, warping and sizing operations (i.e. these
processes do not form part of the extrusion/texturisation
process and are not integrated with such machinery), the
remaining 60 % will relate to the spinning area of
production and therefore falls within the scope of the
Synthetic Fibres Code.

(18) As far as external trade is concerned, it is expected that
increase its

after
exports, particularly to non-member countries.

the company will

the investment

(19)

costs

the total eligible
The Spanish authorities stated that
investment
amounted to ESP 2 012 million
(EUR 12,09 million) and that the proposed aid was
ESP 201,2 million (EUR 1,21 million), with an aid
intensity of 10 %. The aid was to be awarded under the
approved regional economic incentives scheme (3). The
legal basis was Law No 50/1985 of 27 December 1985
(Law on regional incentives to correct economic imbal-
ances between different parts of the country) (4), Royal
Decree No 1535/1987 of 11 December 1987 (5) (regula-
tions
implementing Law No 50/1985) and Royal
Decrees Nos 491/1988 of 6 May 1988 (6) and 2486/
1996 of 5 December 1996 (7) (definition of eligible area
in Aragon). The aid was to be conditional on the main-
tenance of the 266 existing jobs and the creation of 25
new jobs.

(1) OJ C 94, 30.3.1996, p. 11.
(2) OJ C 24, 29.1.1999, p. 18.
(3) Commission notice published in OJ C 251, 29.9.1988, p. 4.
(4) Spanish official gazette (BOE) No 3, 3.1.1986, p. 790.
(5) BOE No 299, 15.12.1987, p. 36729.
(6) BOE No 124, 24.5.1988, p. 15821.
(7) BOE No 3, 3.1.1997, p. 89.

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(20)

(21)

(22)

(23)

(24)

III. Comments by interested parties

Comments were received from the International Rayon
and Synthetic Fibres Committee (IRSFC) and from Brilén
itself.

fibres

The IRSFC stated that it was the representative body for
the European man-made
industry, with its
member companies accounting for 85 % of European
Community production.
strongly supported full,
It
rigorous and impartial implementation of the Synthetic
Fibres Code. It stressed that, in the case concerned, the
relevant product, in terms of the Synthetic Fibres Code,
was polyester textile yarn and that the proposed aid was
intended to assist an investment project which would
increase Brilén's capacity for producing that fibre.
It
noted that, although Brilén's total production capacity
for man-made fibres would remain below the levels of
some years previously, the Code permitted only capacity
for the relevant product to be taken into account. It
stated that capacity utilisation for the relevant product in
the EEA in 1996/97 averaged only 86 %, making it clear
the output of most producers was limited by
that
demand rather than supply factors. Owing to the strong
pressure from suppliers in Asia,
it anticipated that
imports from outside the EEA would maintain or even
slightly increase their level and that structural overca-
pacity in this sector would continue at least until 2003.

By letter dated 7 July 1998 Brilén submitted the
following comments in response to the Commission's
decision to initiate the procedure:

(28)

Brilén did not agree with the Commission's statement
that ‘the company exports about 30 % of its output, a
figure which is not expected to change significantly after
the completion of the project.’ The reality of the project
was precisely the opposite:
it was expected that the
company would increase its exports, particularly to non-
member countries, namely Argentina, Canada,
the
United States, Algeria and Israel.

It did not agree that its investment project should be
regarded as increasing its extrusion capacity. It stressed
increase in extrusion capacity,
that there was no real
only a product substitution, namely a switch from
standard staple fibre to specialised textile filament yarn.
Between 1980 and 1994 the company had extrusion
capacity of approximately 19 370 tonnes of fibre per
year. Brilén was currently producing approximately
9 987 tonnes per year (96 dtex) of continuous filament,
representing a capacity utilisation rate of only 52 %.
After the polyester filament
the
company would produce 11 500 tonnes per year (100
increasing the capacity utilisation rate to 59 %.
dtex),

investment project,

(25)

It did not agree with the statement that the aid requested
by Brilén would distort competition within the EEA. The
aid requested represented only 10 % of
the planned
investment and only 1,6 % of the cost of sales and
therefore could not significantly influence the invest-
ment decision or the company's competitiveness. More-
over, the expansion of Brilén's production of polyester

textile filament yarn was not geared to the major
commodities markets,
in which there clearly existed
excess capacity and which were not — and could not be
— the target markets for a company of the size of
Brilén.

(26)

It disagreed with the treatment of Brilén as one of the
large firms in the sector rather than as a small or
medium-sized enterprise
following
reasons:

(SME),

the

for

There were in fact four manufacturing plants that coex-
isted within Brilén:

— a plant producing polyester staple;

— a polyester yarn spinning plant;

— a warping and sizing plant;

— a plant producing preforms for bottles.

(27) Within each of

these product ranges, Brilén would
qualify as an SME on turnover and workforce criteria. As
far as yarn production in particular was concerned, the
company had a workforce directly employed of appro-
ximately 180 workers and a turnover (1997) of appro-
ximately
ESP 4 000 million (EUR 24,04 million).
Furthermore, the Samca group to which Brilén belonged
did not have any other interests or own any other
companies in the sector, which meant that, except from
a financial standpoint, the company was isolated indus-
trially.

the
Brilén's production accounted for only 5,5 % of
estimated total demand for polyester filament yarn in
western Europe, which stood at 174 000 tonnes in
1997. The proposed increase in polyester filament yarn
capacity thus represented merely 1 % of demand in
western Europe.

(29)

It disagreed with the claim that there was no shortage of
supply, for the following reasons:

According to consultants PCI, the forecast for supply
was that ‘from 1998 onwards the market for polyester
filament yarn will grow sharply and steadily until the
year 2005’. It was expected that demand for polyester
filament yarn would grow at a steady rate, while produc-
tion capacity would stagnate.

It was acknowledged among companies in the sector
that a large proportion of production capacity was
obsolete.

Although surplus production capacity possibly existed
on an aggregate basis, it was a fact that Brilén had since
1996 been facing excess demand for the products it
manufactures and sells. It therefore doubted whether it
was proper to apply a calculation based on the total
supply of all products and total demand for each
product to the analysis of the appropriateness of an
investment by a company of the size of Brilén. It argued
that the analysis of the appropriateness of the aid should
focus on the real state of Brilén's business broken down
by product rather than an aggregate data, in view of the
company's small size.

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The Intrastat statistics showed that Spain's trade balance
for 1997 was in deficit to the tune of over 12 000
tonnes per year, corresponding to the volume of imports
from non-member countries; a similar picture emerged
if the situation was examined at Community level.

(36) As far as the exception provided for by Article 87(3)(b)
is concerned, the aid is clearly not intended to promote
the execution of an important project of common Euro-
pean interest or to remedy a serious disturbance in the
Spanish economy. Nor has the Spanish Government
attempted to justify the aid on such grounds.

IV. Comments by Spain

(30)

By letter dated 10 June 1998, the Spanish authorities
essentially reiterated the views expressed by Brilén in the
course of the procedure, adding that the proposed aid,
with an intensity of 10 % (gross), amounted to less than
half of the regional aid ceiling, which for the Aragon
Economic Development Area is 20 % net gram equi-
valent.

V. Assessment of the aid

(31)

The Commission must first determine whether or not
the measure under examination constitutes State aid
within the meaning of Article 87(1) of the Treaty. In the
the information available the Commission's
light of
assessment is as follows:

(32) Article 87(1) of the Treaty lays down the principle that,
except where otherwise allowable, aid which distorts or
threatens to distort competition by favouring certain
undertakings or the production of certain goods is, in so
far as it affects trade between Member States, incompat-
ible with the common market. Similarly, Article 61(1) of
the EEA Agreement states that, except where otherwise
allowable, such aid is incompatible with the functioning
of the Agreement.

(33)

The proposal to award aid to Brilén undoubtedly falls
within the scope of Article 87(1) of the Treaty and
Article 61(1) of the EEA Agreement as it would allow
the company to carry out the investment in question
without having to bear the full cost. The product which
would be supported by the aid is polyester filament yarn
falling under Combined Nomenclature
codes
5402 42 00, 5402 43 10 and 5402 43 90. Since there is
intra-EEA trade in these products (appro-
significant
ximately 48 000 tonnes in 1997)
the proposed aid
would be likely to distort competition and affect trade
within the meaning of Article 87(1) of the Treaty and
Article 61(1) of the EEA Agreement.

(CN)

(34) Having established that

the proposed aid to Brilén
constitutes
the Commission must decide
whether or not it is incompatible with the common
market.

state aid,

(37) As regards the exception provided for by Article 87(3)(d)
of the Treaty, the aid is clearly not intended to promote
culture and heritage conservation.

(38) With regard to the exceptions provided for in Article
87(3)(a) and (c) for aid that promotes or facilitates the
development of certain areas, the Commission notes that
the region in which Brilén is located is eligible for
regional aid pursuant to Article 87(3)(c). The exception
provided in Article 87(3)(c) of the Treaty is for aid to
facilitate the development of certain economic activities
or of certain economic areas, where such aid does not
adversely affect trading conditions to an extent contrary
to the common interest.

(39)

(40)

as

allows

subsequently amended (2),

The Barbastro area is eligible for regional aid under
Article 87(3)(c) of the Treaty. In that particular area, the
regional incentives scheme approved by the Commission
decision (1),
a
maximum aid intensity of 20 % of the eligible invest-
ment. Aid is granted for investment in new fixed assets
and is conditional an the maintenance of existing jobs.
Furthermore,
in accordance with the guidelines on
national regional aid (3), an exception to the incompati-
bility principle established by Article 87(1) of the Treaty
may be granted in respect of regional aid only if the
equilibrium between the
distortions of
competition and the advantages of the aid in terms of
the development of a less-favoured region can be guar-
anteed.

resulting

In the case in point, the investment chiefly entails the
purchase of new machinery and the construction of
buildings and ancillary installations. The aim is to intro-
duce new technology which will improve productivity
and efficiency while reducing pollution levels. Grant of
the aid is conditional on the company safeguarding the
existing 266 jobs and creating 25 new ones. The invest-
ment in question may therefore facilitate the develop-
ment of the Barbastro area. The intensity (10 %) and
other aspects of the proposal to award aid under the
incentives scheme in the form of a grant of
regional
ESP 201,2 million (EUR 1,21 million)
towards an
investment of ESP 2012 million (EUR 12,09 million)
are in accordance with the terms on which the regional
incentives scheme was approved by the Commission.

(35)

The exceptions to that principle set out in Article 87(2)
of the Treaty do not apply to the case in point, given the
nature and objectives of the aid.

(1) Commission notice published in OJ C 251, 29.9.1988, p. 4.
(2) OJ C 25, 31.1.1996, p. 3.
(3) OJ C 74, 10.3.1998, p. 9.

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(41) However, the effects of regional aid on the synthetic
fibres industry have to be controlled, even for the least
developed areas of
the Community. The conditions
under which aid may be awarded to synthetic fibres
producers have since 1977 been regulated by the
Synthetic Fibres Code.

(42) As Brilén is a producer of synthetic fibres and as the aid
in question relates to the upgrading of a polyester yarn
production plant, it could only be considered compatible
with the common market if it was also in line with the
Synthetic Fibres Code.

(43)

The Code requires the notification of any proposal to
award aid to synthetic fibres producers in whatever
form, irrespective of whether or not the Commission has
authorised the scheme concerned and unless the aid
would satisfy the de minimis (1) criterion, where the aid
would be awarded by way of direct support for:

(45)

— extrusion/texturisation of all generic types of fibre
and yarn based on polyester, polyamide, acrylic or
polypropylene,

irrespective of their end-uses, or

— polymerisation (including polycondensation) where
the
is integrated with extrusion in terms of

it
machinery used, or

— any ancillary process linked to the contemporaneous
installation of extrusion/texturisation capacity by the
prospective beneficiary or by another company in
in the
the group to which it belongs and which,
specific business activity concerned,
is normally
integrated with such capacity in terms of the machi-
nery used.

(44)

The Code sets out in detail the criteria to be applied
when the Commission scrutinises proposals
falling
within its scope. It states, among other things, that in
assessing the compatibility of
the proposed aid the
fundamental consideration is the effect of that aid on the
markets for the relevant products, namely the fibre/yarn
whose production would be supported by the aid. Under
the Code,

investment aid will only be authorised:

(a) for larger firms, that is, firms that are not SMEs, at

up to 50 % of the applicable aid ceiling:

— if the aid would result in a significant reduction

in the relevant capacity, or

— if the market for the relevant products was char-
acterised by a structural shortage of supply and
the aid would not result in a significant increase
in the relevant capacity,

(b) for SMEs, at up to 75 % of the applicable aid ceiling
if the market for the relevant products was charac-
terised by a structural shortage of supply and the aid
would not result in a significant increase in the
relevant capacity,

(c) for SMEs, at up to 100 % of

the applicable aid

ceiling:

— if the aid would result in a significant reduction

in the relevant capacity, or

— if the market for the relevant products was char-
acterised by a structural shortage of supply and
the aid would not result in a significant increase
in the relevant capacity and the relevant products
were innovative.

Contrary to the position taken by the Spanish authori-
ties and the company, Brilén cannot be considered under
the State aid rules to qualify as an SME. The definition
laid down in the relevant Commission Recommenda-
tion (2) does not allow the size of a company to be
determined on the basis of sectors or subsectors of its
activity. In any event Brilén does not meet the inde-
pendence criterion, being a subsidiary of
the Samca
group. Consequently, the criteria for investment aid to
larger firms are applicable.

(46) According to the notification, 40 % of the eligible cost
of the investment relates to activities falling outside the
scope of the Synthetic Fibres Code, namely the drawing,
warping and sizing operations (i.e. these processes do
not form part of the extrusion/texturisation process and
are not
integrated with such machinery), while the
remaining 60 % relates to the extrusion area of produc-
tion and therefore falls within the scope of the Code.
Since the project is for investment in new fixed assets,
the risk of diversion of aid between activities covered by
the Code and activities outside its scope is necessarily
extremely small. The Commission is therefore able to
accept,
the
proposed aid would be awarded in direct support for the
extrusion of one of the generic types of synthetic fibre
falling within the scope of control of the Code, namely
polyester textile filament yarn, while the remaining 40 %
of the proposed aid would be granted under a scheme
approved by the Commission but falling outside the
scope of the Code.

in the same proportion,

that 60 % of

since what matters

the Synthetic Fibres Code,

(47) As regards the 60 % of the proposed aid which falls
the
within the scope of
Commission cannot accept
the Spanish authorities'
assertion that there will be no ‘overall’ increase in extru-
the extrusion
sion capacity,
capacity for the individual fibres and yarns covered by
the Code in view of their different markets. The extru-
sion capacity for polyester yarn was 9 500 tonnes per
year prior to commencement of the project and will be
11 500 tonnes per year after its completion. Therefore,
as the company itself acknowledges, the investment will
give rise to an increase of 21 % in extrusion capacity for
the relevant yarn.

is

(1) OJ C 68, 6.3.1996, p. 9.

(2) OJ L 107, 30.4.1996, p. 4.

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Official Journal of the European Communities

16. 10. 1999

(48)

Even though capacity utilisation rates in this sector at
EEA level have improved in recent years, they have
remained on average rather unsatisfactory and have
increased only through rationalisation. The capacity
utilisation rate for polyester filament yarn within the
EEA was, as the Commission pointed out in its Decision
to initiate the procedure, approximately 74 % in 1994,
78 % in 1995 and 82 % in 1996. The Spanish authori-
ties have not challenged these figures. Although capacity
utilisation rose to 89 % in 1997, draft figures for 1998
show a utilisation rate of 84 %. According to the Code,
the capacity utilisation rate for production of the rele-
vant fibre or yarn, averaged an an annual basis over the
previous two years, would be expected to be at least
there were a structural shortage of supply.
90 % if
Consequently, there does not appear to be a structural
shortage of supply in the relevant market, i.e. the market
in polyester filament yarn.

(49) Although, according to available data, consumption of
textured polyester fibre within the EEA did increase from
458 000 tonnes in 1995 to 569 000 tonnes in 1997
and imports from outside the EEA rose from 68 000
tonnes to 104 000 tonnes over the same period, the
trend would appear to be chiefly the result of strong
pressure from suppliers in Asia, where excess capacity is
huge and rising, rather than supply factors within the
EEA.

(50)

(51)

Furthermore,
the aid
the company points out
requested amounts to only 10 % of the planned invest-
ment and represents only 1,6 % of the cost of sales, so
that it cannot be regarded as significantly influencing the
investment decision.

that

the proposed aid relates to
The remaining 40 % of
processes, namely drawing, warping and sizing opera-
tions, that do not form part of the extrusion/texturisa-
tion process and are not integrated with such machinery.
It therefore falls outside the scope of the Synthetic Fibres
Code. As a result of the proportional calculation applied,
the aid intensity of 10 % remains unchanged. The invest-
ment linked to the aid is for the purchase of new fixed
assets and, in any event, the creation of 25 new jobs
appears to be ensured in as much as, according to the
company,
the aid granted will not
perceptibly influence the investment decision as a whole.
It consequently satisfies the conditions on which the
abovementioned
scheme was
approved by the Commission.

the amount of

incentives

regional

VI. Conclusions

(52)

Brilén is a larger firm producing synthetic fibres that fall
within the scope of the Synthetic Fibres Code. 60 % of
the notified aid would be awarded in direct support for
the extrusion of one of the generic types of synthetic
fibre and would lead to an increase in production

capacity for the relevant fibre of 21 %. The capacity
utilisation rates for polyester filament yarn within the
EEA have in recent years remained on average below the
90 % level. Consequently, there does not appear to be a
structural shortage of supply in the relevant market as
defined by the Code.

(53) Accordingly,

Fibres

the part of
the Commission finds that
proposed aid to Brilén falling within the scope of the
Synthetic
to
ESP 120 720 000 (EUR 725 541,81) cannot be consid-
ered compatible with the Code and is therefore incom-
patible with the common market and the functioning of
the EEA Agreement.

amounting

Code

and

(54) On the other hand,

the Commission does not raise
objections in respect of that part of the aid, amounting
to ESP 80 480 000 (EUR 483 694,54), which falls
within a Commission-approved scheme but outside the
scope of the Code,

HAS ADOPTED THIS DECISION:

Article 1

The State aid amounting to EUR 725 541,81 which Spain is
planning to implement in favour of Brilén SA is incompatible
with the common market.

This aid may accordingly not be implemented.

Article 2

The State aid amounting to EUR 483 694,54 which Spain is
planning to implement in favour of Brilén SA is compatible
with the common market in accordance with Article 87(1) of
the Treaty.

Implementation of this aid is accordingly authorised.

Article 3

Spain shall
inform the Commission, within two months
following notification of this Decision, of the measures taken
to comply with it.

This Decision is addressed to the Kingdom of Spain.

Article 4

Done at Brussels, 1 July 1999.

For the Commission

Karel VAN MIERT

Member of the Commission