WRITTEN QUESTION E-0411/02 by André Brie (GUE/NGL) to the Commission. Preventive measures against payment of unauthorised state aid.
Date: 2002-02-20
Institutions: European Parliament, Provisional data
Subjects: Germany, Spain, State aid, application of EU law, control of State aid, transfer of businesses

6.2.2003

EN

Official Journal of the European Union

C 28 E/27

(2003/C 28 E/030)

WRITTEN QUESTION E-0411/02

by André Brie (GUE/NGL) to the Commission

(20 February 2002)

Subject: Preventive measures against payment of unauthorised state aid

In view of reports that the management of the long-established Berlin company Babcock Borsig intends to
transfer its plant to the Spanish city of Bilbao, apparently because Spain is prepared to make substantial
aid available (allegedly up to EUR 500 million over a period of five years):

(cid:1) will the Commission state whether such aid is actually permissible for the relocation of businesses

from one EU Member State to another?

(cid:1) does the Commission have any early warning system enabling it

to examine such (possibly
unauthorised) state aid arrangements prior to the actual payment and to take appropriate action so
as to ensure that any objection it may raise as a result is not simply faced with a fait accompli?

(cid:1) would the Commission not agree that such an early warning system should be set up if it does not

already exist?

Answer given by Mr Monti on behalf of the Commission

(23 April 2002)

The Commission is regularly questioned about the consistency of competition policy when there are
certain relocations within the Union. Although it does not have any precise information on the possible
aid to which the Honourable Member refers, the Commission would reiterate the key elements of this
policy.

The basic principle underlying the rules on State aid is that it is incompatible with the common market.
However, exceptions may be made provided that the impact on trade and the distortion of competition
which result from the granting of State aid are offset by an adequate contribution to the development of a
disadvantaged region.

This is why one of the objectives of the cohesion policy, and the sole aim of regional aid, is to compensate
for the structural handicaps of certain regions so that they are considered by a sufficient number of
undertakings to be a viable location,
in the same way and in the same conditions as those that are
relatively more advantaged. As far as the monitoring of State aid is concerned, this policy is translated into
practice by a system of ceilings on the level of aid depending on the degree and the urgency of the various
regional problems.

Relocations are first and foremost the result of choices made by the enterprise in order to improve its
competitiveness, either by reducing its overheads (wage costs,
tax), or by
rationalising its production tools. Decisions concerning the location of an undertaking may thus be
influenced by a number of factors, not only or principally the possibility of obtaining financial support
from the public purse in order to make new investments. In any event, any public support of this kind,
whether of national or Community origin, must respect the Community rules on State aid.

transport, raw materials,

It is true that the difficulty in reaching an operational definition of relocation limits the possibilities for
intervention to put in place a genuine control mechanism. However, the Commission already takes
account of this phenomenon in the application of the Community rules on State aid so as to ensure that
the harmful effects of aid on competition are offset by beneficial effects, notably in terms of cohesion.
Thus, when it adopted the guidelines on national regional aid, the Commission reduced the level of aid
authorised across the board in order to reduce the risks of regions attempting to outbid one another and
to limit aid to what is strictly necessary. At the same time, the granting of regional aid was tied more
strictly to conditions of duration in terms of the continuation of investment and jobs creation in the region
concerned. Finally, large investment projects must be notified individually to the Commission so that it can
examine the related aid, even before it is granted and in the light of the provisions drawn up to this end by
the multisectoral framework.

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Official Journal of the European Union

EN

6.2.2003

This being the case, the Commission intends to make contact with the Spanish authorities in order to
check that any aid granted to Babcock Borsig conforms to the Community rules applicable.

(2003/C 28 E/031)

WRITTEN QUESTION E-0447/02

by Michael Cashman (PSE) to the Commission

(21 February 2002)

Subject: Price disparity in the holiday market

Currently some holiday companies with booking facilities in other Member States (e.g. CenterParcs) will
only allow customers to book in the country they are currently in. This can result in the customer paying
more for his/her holiday. Could the Commission comment as to whether this contravenes competition
policy?

Answer given by Mr Monti on behalf of the Commission

(5 April 2002)

The Honourable Member asks the Commission whether the fact that some holiday companies, e.g. Centre
Parcs, prevent their customers from booking their holidays from a Member State other than that in which
they reside infringes the competition rules. The practice is said to result in consumers being unable to
book from the Member State in which the terms are the most favourable.

In this case, the competition rules, and more specifically Article 81(1) of the EC Treaty, could apply only if
the prohibition in question stemmed from or was contained in an agreement for the distribution of the
services concerned, such as an agreement between a holiday company and a travel agency.

The reasons why the holiday companies had introduced such a restriction would then have to be analysed,
after which it would have to be determined whether the restriction was economically justified (different
modes of transport, different VAT or other tax rates, etc.).

Only after such a detailed examination had been carried out would it be possible to say whether the
prohibition in question was compatible or not with Article 81(3) of the Treaty.

If such companies were to distribute their services directly to the consumer without going through travel
agencies or other third parties, this type of practice would not be contrary to the competition rules unless
it was being engaged in by a company in a dominant position.

The Directorate-General for Competition will investigate these matters.

(2003/C 28 E/032)

WRITTEN QUESTION E-0460/02

by Stavros Xarchakos (PPE-DE) to the Commission

(22 February 2002)

Subject: Increase in ozone levels in Greece

According to Greek press reports, Greece is one of the worst offenders as regards exceeding the threshold
for ‘bad ozone’. This is due largely to cross-border primary pollution from countries to the north and
north-west of Greece, such as the former eastern bloc countries (the former USSR and others), Germany,
northern Italy, Romania and Bulgaria. According to the same sources, even if it cuts ozone emissions by
50 %, Greece will only be able to reduce levels slightly (10 % at most), owing to the ‘smog’ imported from
other countries.