WRITTEN QUESTION E-1396/99 by Hedwig Keppelhoff-Wiechert (PPE-DE) to the Commission. Contradictions arising from assistance under structural objectives.
Date: 1999-09-01
Institutions: European Parliament, Provisional data
Subjects: Structural Funds, development policy, employment policy, regional aid, structural policy, transfer of businesses

C 170 E/4

Official Journal of the European Communities

EN

20.6.2000

(2000/C 170 E/004)

WRITTEN QUESTION E-1393/99

by Bernd Lange (PSE) to the Commission

(1 September 1999)

Subject: Subsidies for Vion VVaG

The Hanover insurance company HDI Haftpflichtverband der deutschen Industrie and the Bavarian
insurance company HUK-Coburg propose to merge in July 1999. The registered office of the new firm
resulting from the merger, Vion VVaG, is to be in Coburg. The decision on the location of the office was
taken as a result of substantial financial incentives from the Land of Bavaria, the level of which is not
publicly known.

1.
Is the European Commission aware of the financial assistance for Vion VVaG from the government
of the Land of Bavaria? If so, what level of assistance is being provided by the Land of Bavaria in this case?

2.

Have the subsidies and incentives from the Land of Bavaria been notified as aid to the Commission?

Are such subsidies compatible with European law on competition and aid, and in particular

3.
Article 87 of the EC Treaty?

Supplementary answer
given by Mr Monti on behalf of the Commission

(5 November 1999)

The Commission has been informed that the merger of HDI Haftplichtverband der Deutschen Industrie and
HUK-Coburg to Vion Vvag will not take place and that no state aid measures have taken place.

On the basis of this information the Commission will thus not further investigate the matter.

(2000/C 170 E/005)

WRITTEN QUESTION E-1396/99

by Hedwig Keppelhoff-Wiechert (PPE-DE) to the Commission

(1 September 1999)

Subject: Contradictions arising from assistance under structural objectives

There is a sharp difference between the economies of the economically strongest areas of the European
Union and structurally weak areas. The aim of European structural policy is to bridge this gap. To that
end, the European Commission has determined six main tasks of structural policy and defined them as
(cid:145)objectives(cid:146).

1.
Is the Commission aware of contradictions arising from assistance granted under structural objec-
tives, where, for example, a business relocates, in order to receive EU funds, from an area which is not
structurally weak to an area qualifying for assistance, but as a consequence of the relocation hundreds of
jobs are lost at the old location and the economic strength of the town or city is diminished?

2. What does the Commission intend to do in order to remove this paradox, which involves jobs being
created on the one hand and destroyed on the other?

20.6.2000

EN

Official Journal of the European Communities

C 170 E/5

Answer given by Mr Barnier on behalf of the Commission

(11 October 1999)

The right of firms within the Community to choose a geographical location appropriate to their
1.
particular needs is assured by the right of establishment enshrined in the EC Treaty. Any decision to
relocate an existing establishment is a complex matter affected by many factors such as companies(cid:146) wider
strategies to restructure, specialise or concentrate their operations in the interest of improving efficiency.

The Community has, however, a particular interest where a firm undertaking a relocation has been
supported by public funds either in its present or future location. In examining individual cases, the
Commission will have to take into account all the circumstances, bearing in mind that among the options
open to the firm are those of relocating outside the Community, or complete closure.

2.
The success of the single market depends to an important degree on Community competition rules,
in particular, the rules on state aid which seek to prevent distortions and to underpin fair competition. The
Commission has included specific provisions in the recently adopted rules in the fields of both state aid
and of the structural funds, to address possible problems linked to relocation. In particular, the Commis-
sion(cid:146)s state aid guidelines reduce permitted intensities for investments in officially notified assisted regions.
The new levels seek to allow less favoured regions the possibilities to attract mobile new investment
through inducements, while at the same time the reductions can be expected to reduce the risk of regions
engaging in competitive bidding. Furthermore, both the guidelines and the structural funds regulation
(Council Regulation (EC) 1260/1999 of 21 June 1999 laying down general provisions on the structural
funds (1)) introduce the condition that the supported investment should remain in place for a minimum of
five years.

Finally, the Commission pays particular attention to major projects as it has to confirm or modify the
support by the structural funds for such projects (investment level of more than € 50 million) on an
individual basis. Part of its analysis consists in analyzing the employment effects of such projects on a
Community level.

(1) OJ L 161, 26.6.1999.

(2000/C 170 E/006)

WRITTEN QUESTION E-1403/99

by Graham Watson (ELDR) to the Commission

(1 September 1999)

Subject: Labelling of food

Can the Commission clarify the logic which allows food produced in country A but packed in

1.
country B to be labelled as being of origin from country B?

Can the Commission indicate the schemes for the funding of agricultural products in which the UK

2.
does not participate?

Answer given by Mr Liikanen on behalf of the Commission

(14 October 1999)

The provisions relating to the labelling of foodstuffs, as enacted by Directive 79/0112/EEC of 18 December
1978 on the approximation of the laws of the Member States relating to the labelling, presentation and
advertising of foodstuffs (1) as last amended by Directive 97/0004/EC (2), do not allow for the possibility
suggested by the first question of the Honourable Member.

The Commission would be grateful if the Honourable Member would provide more specific information
on the case to which he refers.