2000/213/ECSC:Commission Decision of 28 November 2001 on the State aid which Germany is planning to implement for EKO Stahl GmbH (Text with EEA relevance) (notified under document number C(2001) 3732)
Date: 2001-11-28
Institutions: European Commission
Subjects: Germany, State aid, aid to undertakings, control of State aid, industrial research, iron and steel industry

13.3.2002

EN

Official Journal of the European Communities

L 70/17

II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 28 November 2001

on the State aid which Germany is planning to implement for EKO Stahl GmbH

(notified under document number C(2001) 3732)

(Only the German version is authentic)

(Text with EEA relevance)

(2002/213/ECSC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Coal and
Steel Community,

(4)

Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof, read in conjunc-
tion with Protocol 14,

Having regard to Commission Decision No 2496/96/ECSC of
18 December 1996 establishing Community rules for State aid
to the steel

industry (1), and in particular Article 6(5),

Having called on interested parties to submit their comments
pursuant to the abovementioned Decision (2) and having regard
to those comments,

(5)

Whereas:

(1)

(2)

I. PROCEDURE

By letter dated 5 October 2000, Germany notified the
Commission of its intention to grant aid to EKO Stahl
GmbH (hereinafter EKO Stahl) to help finance an R&D
project.

By letter dated 2 March 2001, the Commission informed
Germany that it had decided to initiate the procedure
laid down in Article 6(5) of Commission Decision No
2496/96/ECSC (hereinafter the steel aid code) in respect
of the aid.

(6)

(3)

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

ties (3). The Commission invited interested parties to
submit their comments on the aid.

Germany presented its comments on the Commission
Decision by letter dated 27 April 2001. The Commis-
sion received comments from the United Kingdom by
letter dated 5 July 2001 and forwarded them to
Germany by letter dated 1 August 2001. Germany gave
its response by letter dated 23 August 2001.

II. DETAILED DESCRIPTION OF THE AID

The aid notified for EKO Stahl was to be used to finance
the company's participation in the project ‘Methods and
instruments to create, stabilise and evaluate permanent
adaptability: personnel and know-how’. This is a joint
project carried out with eight other partners, mainly
active in the field of human resources and information
to
technology. The costs
EUR 665 007 and the notified aid to EUR 399 004.
The proposed aid intensity is thus 60 %, corresponding
to 50 % for industrial research plus a regional bonus of
ten percentage points because EKO Stahl is located in an
Article 87(3)(a) region. The costs comprise personnel,
travelling and administrative expenses. The project is to
run from July 2000 to March 2003.

for EKO Stahl amount

The overall project is described as a sociological research
project designed to develop methods and instruments
for stabilising the long-term adaptability of workers.
One element of this project is ‘personnel and know-
how’, the area where EKO Stahl would be more directly
involved and where methods and instruments are to be
developed that enable staff and management to achieve
a given level of adaptability and to build on it as new
developments occur.

(1) OJ L 338, 28.12.1996, p. 42.
(2) OJ C 166, 9.6.2001, p. 2.

(3) See footnote 2.

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Official Journal of the European Communities

13.3.2002

(7)

The German authorities also informed the Commission
that the EKO Stahl project would be carried out in three
stages based on the timetable for the overall
joint
project. The first stage would be a planning stage for
devising methods for assessing permanent adaptability.
The second stage would be a development stage during
which instruments would be adapted, developed further
and tested. The third stage would be a so-called control
stage for disseminating and implementing the findings.

(8)

The German authorities also informed the Commission
that the incentive effect of the aid resides in the fact that
EKO Stahl has no direct interest in the project and
therefore would not participate in it without aid.

(9) When initiating the procedure, the Commission raised
doubts as to whether the notified participation of EKO
Stahl in the overall project constituted research within
the meaning of
indeed
doubted that EKO Stahl would carry out any research
within the context of the project as its participation
seemed to correspond solely to acting as a ‘testing
ground’ for the research of the other participants.

the R&D framework (4).

It

(10)

The Commission also raised doubts as to the compati-
bility of the aid if the EKO Stahl project were to be
assessed under the R&D framework. No clear definition
of the tasks that would have to be performed by its
workers was given that would justify the level of aid at
the different research stages. The reason put forward for
the incentive effect was also called into question as it
can be taken to mean that, as the Commission originally
suspected, EKO Stahl is not itself actually carrying out
any research.

III. COMMENTS FROM INTERESTED PARTIES

(11)

The United Kingdom sent in comments on the proposed
project and shared the view expressed by the Commis-
sion in its decision to initiate the procedure, namely that
such a project clearly cannot rank as R&D within the
meaning of the R&D framework.

IV. COMMENTS FROM GERMANY

(12)

In its own comments and in its reply to the comments
by the United Kingdom, Germany reaffirms its initial
position that EKO Stahl's participation in the project
constitutes research within the meaning of the R&D
framework. It also confirms that, in its view, the entire
project constitutes
the
proposed level of aid is accordingly justified. It further

research and that

industrial

states that the project meets the criteria for eligibility
under European Parliament and Council Decision No
182/1999/EC
framework
programme of the European Community for research,
technological development and demonstration activities
(1998-2002) (5), hereinafter the ‘Fifth Community R&D
Programme’.

concerning

fifth

the

V. ASSESSMENT OF THE AID

(13)

EKO Stahl GmbH is an undertaking within the meaning
of Article 80 of the ECSC Treaty. Aid to it is therefore
subject to the steel aid code, which provides for the
possibility of aid to steel undertakings for R&D activities.
Aid projects must be notified individually and their
compatibility should be assessed under the R&D frame-
work.

(14) Annex I to the R&D framework gives a definition of
R&D in its different stages. It also states that the frame-
work is intended to cover R&D aid linked directly to the
subsequent production and marketing of new products,
processes or services. In Section 5, the R&D framework
sets the aid intensities for the different stages of the
research, which generally vary from 50 % for industrial
research to 25 % for pre-competitive development activi-
ties. In Section 6, it requires that the aid should serve as
an incentive for firms to undertake R&D activities in
addition to their normal day-to-day activities and states
that particular attention must be exercised in the case of
large firms.

(15) Germany claims that the EKO Stahl project meets the
criteria laid down for a Community R&D project. There
is indeed a project under the Fifth Community R&D
Framework Programme which has similarities with the
overall project in which EKO Stahl would participate
and for which a call for tenders was recently launched.
company
Participation by
in this
an industrial
Community project, whilst not
excluded, will be
assessed on the basis of the merits of the R&D activities
to be carried out by that company, as it would be for all
applicants, whether institutes or universities. Similarly,
in the present case, the aid to EKO Stahl is assessed on
the basis of its own research contribution,
just as it
would be if the company were to carry out this or any
other project alone. The fact
the company has
is participating in an overall research
stated that
project with other partners does not dispense with the
need to demonstrate that its contribution constitutes
research.

that

it

(4) OJ C 45, 17.2.1996, p. 5.

(5) OJ L 26, 1.2.1999, p. 1.

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(16) Germany reiterates its position that

industrial

constitutes

the EKO Stahl
project
research within the
meaning of the R&D framework. However, it does not
explain what this research activity is. Apart from merely
claiming that the company will engage in significant
research activities in the area of methodologies and
instruments
stabilising and evaluating
adaptability, there is no concrete information on the
active role which the company itself will play in the
research. No definition or description of the tasks to be
performed by the company is given. The doubt raised by
the Commission on initiating the procedure that EKO
Stahl will serve merely as a ‘testing ground’ for the other
participants in the project is therefore maintained.

shaping,

for

VI. CONCLUSION

(17) Accordingly,

the Commission concludes

that EKO
Stahl's activities,
for which aid was notified, do not
the R&D
constitute research within the meaning of
framework. The project is not therefore eligible for aid
under that framework. The other points raised during
the procedure, such as the stage of research and the
corresponding aid intensity as well as the incentive effect
of the aid, do not therefore need to be examined. The
aid notified by Germany for EKO Stahl
is therefore
incompatible with the steel aid code, with the common
market and with the functioning of the EEA Agreement,

HAS ADOPTED THIS DECISION:

Article 1

The State aid which Germany is planning to implement for
EKO Stahl GmbH, amounting to EUR 399 004, is incompat-
ible with the common market and with the functioning of the
EEA Agreement.

The aid may accordingly not be implemented.

Article 2

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

Article 3

This Decision is addressed to the Federal Republic of Germany.

Done at Brussels, 28 November 2001.

For the Commission

Mario MONTI

Member of the Commission