WRITTEN QUESTION E-3708/01 by Jonas Sjöstedt (GUE/NGL) to the Commission. Proposals which distort competition.
Date: 2002-01-17
Institutions: European Parliament, Provisional data
Subjects: EU law - national law, regional and local authorities, restriction on competition, single market, tax relief

C 172 E/120

Official Journal of the European Communities

EN

18.7.2002

(2002/C 172 E/123)

WRITTEN QUESTION E-3708/01

by Jonas Sjöstedt (GUE/NGL) to the Commission

(17 January 2002)

Subject: Proposals which distort competition

In early November 2001, Swedish Minister of Finance Ringholm presented a proposal at his party’s
It was
congress aimed at cutting and scrapping payroll tax for municipalities and county councils.
proposed that payroll tax be reduced by 1 % in respect of all municipal undertakings during 2002 and that
it be waived in its entirety when new staff are recruited to work in municipal undertakings.

Private contractors criticised the proposal. If their contracts expire, it could be nearly 40 % cheaper for
municipalities to provide the services concerned themselves again.

Mr Ringholm’s proposal was criticised for distorting competition in the internal market. A Swedish expert
took the view, for instance, that the tax regime introduced would be discriminatory if the same services
were taxed differently according to who operates them.

The Finance Minister subsequently withdrew his proposal.

What view does the Commission take of the aforementioned proposal? Does it consider that such a
proposal may be implemented if the Swedish Riksdag so wishes, or does it distort competition in the
internal market?

Answer given by Mr Monti on behalf of the Commission

(26 February 2002)

Article 87(1) of the EC Treaty provides that aid granted by a Member State or through State resources in
any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings
or the production of certain goods shall,
in so far as it affects trade between Member States, be
incompatible with the common market.

The notion of State resources covers not only monies paid out by State bodies, but also income foregone
by the State through tax concessions. Tax concessions which are granted selectively only to certain types
of undertakings, and which are not justified by the nature and logic of the tax system, are liable to distort
competition and affect trade between Member States. Such measures must therefore be notified in advance
to the Commission, in accordance with Article 88(3) of the EC Treaty, and may be approved by the
Commission only if they qualify for one of the derogations from the principle of the incompatibility of aid
listed in Article 87(2) or 87(3).

(2002/C 172 E/124)

WRITTEN QUESTION E-0002/02

by Alexandros Alavanos (GUE/NGL) to the Commission

(17 January 2002)

Subject: Airport taxes at Athens airport

In my previous question, No E-0331/01 (1) of 13 February 2001, I raised the issue of a possible lack of
competitiveness at Eleftherios Venizelos airport, due to increased airport taxes.

On 20 December 2001, the Athens International Airport company decided to reduce aircraft landing and
parking fees by between 15 and 23 %. In order to make these reductions, the Athens airport management
has agreed to levy 90 % of the airport modernisation tax, instead of the 75 % it currently levies.