2003/439/EC: Commission Decision of 13 November 2002 on the State aid which Germany is planning to implement for Capro Schwedt GmbH (notified under document number C(2002) 4364) (Text with EEA relevance)
Date: 2002-11-13
Institutions: European Commission
Subjects: Germany, State aid, chemical product, control of State aid

20.6.2003

EN

Official Journal of the European Union

L 153/49

COMMISSION DECISION

of 13 November 2002

on the State aid which Germany is planning to implement for Capro Schwedt GmbH

(notified under document number C(2002) 4364)

(Only the German version is authentic)

(Text with EEA relevance)

(2003/439/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(4)

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 called on interested parties to submit their comments
pursuant to the provisions cited above (1) and having regard to
their comments,

Whereas:

(1)

(2)

(3)

I. PROCEDURE

On 3 August 2001, the German authorities notified an
aid proposal for an investment project in the town of
Schwedt, Brandenburg, to be led by a new company
Capro Schwedt GmbH (Capro Schwedt) and including
three other companies. The notification was made under
the multisectoral framework on regional aid for large
investment projects (2) (MSF), in view of the level of the
proposed aid and of the investment cost.

the Commission
By letter dated 17 January 2001,
informed Germany that it had decided to initiate the
procedure laid down in Article 88(2) of the EC Treaty in
respect of the aid. Germany sent its comments by letter
dated 17 April 2002.

The Commission decision to initiate the procedure was
published in the Official
the European
Communities (3). The Commission invited interested
parties to submit their comments on the aid.

Journal

of

(1) OJ C 63, 12.3.2002, p. 18
(2) OJ C 107, 7.4.1998, p. 7.
(3) See footnote 1.

(5)

(6)

(7)

The Commission received three sets of comments from
interested parties, which it
forwarded to Germany.
Germany gave its reaction to these comments by letters
dated 20 June 2002 and 14 August 2002.

II. DETAILED DESCRIPTION OF THE MEASURE

1. The beneficiary and the project

a

into

The investment is planned to take place in Schwedt,
Germany, an industrial town dominated by an existing
petrol refinery, around which the local authorities want
to centre its industrial redeployment, transforming the
area
complex. A public
chemical
infrastructure
Infra Schwedt GmbH, was
created by the city, which is to re-deploy part of the
land in the vicinity of the refinery for use by potential
chemical companies. The chemical complex is to be
developed in five steps, of which the caprolactam
project is the first.

company,

big

Capro Schwedt GmbH is a new company owned by
Aquafil, an Italian synthetic fibre producer. Caprolactam
constitutes the main raw material for the production of
synthetic fibres and, at present, Aquafil buys it from
chemical producers. Aquafil decided to integrate its
production chain and start producing caprolactam itself.
Together with Capro Schwedt, the main investor, three
other companies, who will supply some of the necessary
the production of caprolactam,
products/services for
will be established in its direct vicinity.

and

their

respective

production

These companies (hereinafter referred to as supplying
companies)
are:
AmmoSulf GmbH (oleum/sulphuric acid), CycloChem
GmbH (cyclohexane) and P&F Flockungsanlage Service
and Medien GmbH (hydrogen). At present they are only
‘project companies', owned by the public authorities.
Germany has, however, communicated the names of
three big companies that would be interested in buying
them, but will
the
Commission approves the aid for the whole project.
These acquiring companies would be Krebs-Speichim SA

join the project only

after

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(France), specialised in the engineering and construction
of sulphuric acid/oleum plants, Infrastutture e Gestioni
SpA (Italy),
specialised in erecting, operating and
maintaining industrial plants, and Kinetics Technology
International SpA (Italy), specialised in building plants,
but also in the production of hydrogen and synthetic
gases.

(12) As regards the capital-labour factor,

the Commission
raised doubts whether the project would create 528
new jobs (leading to a capital-labour factor of 0,8), as
claimed by Germany. The Commission estimated that
the level of job creation would in fact be only around
400, which would reduce the capital-labour factor to
0,7.

(8)

(9)

lead to
According to the notification, the project will
the creation of 528 new jobs, of which 448 in Capro
Schwedt. The new investment project will be located in
Schwedt, Brandenburg, an assisted area under Article
87(3)(a), in which the maximum allowable aid intensity
is 35 % gross.

(13) On the basis of data on capacity utilisation, Germany
considered the competition factor to be neutral. The
Commission, however, considered it useful to assess the
data on the apparent consumption of caprolactam,
before taking a position on the market.

2. The notified aid

Germany notified its intention to grant aid amounting
to EUR 92,71 million (28 % (GGE) of the eligible project
costs of EUR 331,11 million). The proposed aid consists
of investment aid in the form of a non-reimbursable
grant amounting to EUR 50,617 million (15,287 %)
granted under the 28th outline plan for the joint Federal
improving regional
Government/Länder
economic structures approved by the Commission (4).
Furthermore an investment premium (Investitionszulage)
amounting to EUR 41,108 million (12,415 %) is to be
granted on the basis of the Investment Premium Law
1999, approved by the Commission (5), and 0,298 %
(EUR 986 000) as a guarantee (6) on part of a loan
granted by a commercial bank.

scheme

for

the

these

schemes,

(14) Germany stated that the aid will be granted on the basis
of regional aid schemes approved by the Commission.
investment premium
One of
(Investitionszulage) (7) provides for automatic tax breaks
for investments made by companies (in the area of
Schwedt
investments).
the
Germany declared that
the project will receive only
12,415 % of aid under this tax scheme. The Commission
had doubts
the
investment premium could lead to the result that the
declared aid intensity of 28 % is exceeded.

that an automatic application of

amounting to 15 % of

IV. COMMENTS FROM INTERESTED PARTIES

(15)

Two competitors
submitted comments.

and one

agricultural

association

III. REASONS FOR INITIATING THE FORMAL
INVESTIGATION PROCEDURE

(16)

(10)

The Commission raised doubts as to the precise scope
of the project, as there was little information on the
part of the supplying ‘project companies'. Point 7.2 of
the MSF states that ‘an investment project should not be
artificially divided into sub-projects in order to escape
the notification obligation'.

to agriculture. Therefore,

The ‘Industrieverband Agrar', representing the interests
of pesticide and fertiliser producing companies
in
Germany, explained that, as a by-product of producing
caprolactam, ammonia-sulphate is produced and sold as
a nitrogen fertiliser
the
German fertiliser industry would be adversely affected
by the caprolactam production. The ‘Industrieverband
Agrar' also stressed the continuous restructuring process
the fertiliser industry had been going through since
1980 in a shrinking market. Although the aid might
create some jobs, it would jeopardise other jobs in the
fertiliser industry.

the

(11) As regards the infrastructure company, the Commission
raised
of
question whether
infrastructure did not mean aid for the project (genuine
character
the
infrastructure company would supply a number of
connections not justified in the case of a single project
developer and whether
the tariffs corresponded to
market prices).

infrastructure,

provision

whether

the

the

of

(4) 28. Rahmenplan der Gemeinschaftsaufgabe

‘Verbesserung der

regionalen Wirtschaftsstruktur'.

(5) Investitionszulagengesetz 1999, C 72/98 (ex N 702/97), SG (98)
D/12438 of 30.12.1998 and SC (2001) D/286551 of 2.3.2001.

(17) DSM Fibres Intermediates BV stressed that the project
appeared to be artificially structured to circumvent the
MSF.
In particular, there appeared to be no business
rationale for the involvement of ‘supplying companies'
other than circumventing the MSF. The provision of
infrastructure by InfraSchwedt appeared to involve state
aid elements. As regards the competition factor, DSM
Fibres Intermediates BV considered that it should not be
regarded as neutral but as negative, since there was
structural overcapacity in the caprolactam market and
this situation was likely to deteriorate in the near future.

(6) Granted

the
(Bundesbürgschaftsprogramm, N 297/91).

basis

on

of

an

approved

scheme

(7) Investitionszulagengesetz 1999 (InvZulG 1999).

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Official Journal of the European Union

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the

the capital-labour factor appeared to be
In addition,
factor was
overstated, while
considered correct. Finally,
the project would raise
technological and environmental concerns, and the loan
guarantees granted by the German authorities should be
scrutinised.

regional

impact

Taking

be
the

capital-labour

should
account

(18) Domo NV considered that the competition factor and
re-assessed
factor
the
structural
into
downwards.
overcapacity in western Europe, the competition factor
should be set at 0,75. As regards the capital-labour
factor, Domo NV explained that a greenfield investment
of the size proposed and with the technology used led
to the creation of approximately 350 jobs (and an
absolute maximum of 400 jobs). On the assumption of
400 jobs, the capital-labour factor should be set a 0,7.
As a result, the maximum aid intensity should be set
substantially below the level of 28 % proposed by
Germany, at 18,375 %. Finally, Domo NV observed that
the creation of
InfraSchwedt GmbH might contain
additional aid elements and that the artificial set-up of
the
a
companies
satellite
circumvention of state aid rules.

could

three

lead

to

V. COMMENTS FROM GERMANY

(Nr

system

(19) As regards the doubts raised by the Commission on the
form of the proposed aid, Germany explained that any
automatic, excessive granting of aid through combining
the
investment premium with the other aid was
prevented by the applicable award rules in the German
legal
Allgemeinen
Nebenbestimmungen für Projektförderungen zu §44 der
Bundes/Landeshaushaltsordnungen). Germany confirmed
investment
that
premium with other aid that exceeded the allowable aid
intensity would be offset by a proportional reduction of
the grant under the joint Federal Government/Länder
improving regional economic structures
scheme for
regionalen
(Gemeinschaftsaufgabe Verbesserung
Wirtschaftsstruktur).

any combining of

aid from the

der

der

2

(20)

that

German

authorities
the
considered
The
the infrastructure into a chemical
development of
complex did not include an additional aid element for
the project. Germany explained that the infrastructure
was being built not only in the interests of Capro
Schwedt and the supplying companies. It also confirmed
that Capro Schwedt and the three supplying companies
were to be considered as a single unit in the project. As
the supplying companies, Germany
to the nature of
explained that
the
caprolactam production, but also to provide basic
chemicals needed for the planned development of the
chemical complex as such. As to the tariff system for
the services of InfraSchwedt, Germany stated that prices
charged by InfraSchwedt for its products/services were
market prices.

they were not only needed for

(21) As

the

regards

factor, Germany
capital-labour
considered that the assumption of 528 new jobs for the
the facility producing caprolactam and
operation of
feedstock and for the provision of services was realistic.

As the caprolactam production in Schwedt was not
large
integrated into a production network of a
chemicals producer with corresponding synergies,
it
could not be compared to such companies when
calculating the required workforce. The capital-labour
factor should consequently be set at 0,8. However,
Germany offered to base the calculation of
the aid
initially on a capital-labour factor of 0,7 and to pay out
the last
the Commission had
verified the correct implementation of the project as
regards the announced direct and indirect job creation
and after the Commission had agreed to the payment of
the last instalment.

instalment only after

submitted

2002,
on

Germany
the

(22) As regards the competition factor, Germany considered
that sufficient data as regards the capacity utilisation of
the relevant product was available. By letter dated 14
additional
August
of
information
caprolactam during the period 1995 to 1999 (8). As
regards
future market development, based on
forecasts on the development of the caprolactam market
by SRI
the
apparent consumption of the product would increase
from 708 000 tonnes in 1999 to 770 000 tonnes in
2004. As regards the regional impact factor, Germany
agreed with the Commission's assessment.

International, Germany considered that

consumption

apparent

the

(23)

earlier

reference period to be the last

received from third
In response to the comments
parties, Germany reconfirmed that
the capital-labour
factor should be set at 0,8. As regards the competition
factor, Germany reconfirmed its
view and
referred to the increase of apparent consumption as of
2005. It also explained that the Asian market was an
important sales area for the investor. With respect to an
analysis of capacity utilisation, Germany considered the
five years.
relevant
Germany explained that the guarantees granted were in
accordance with the State aid rules. Finally, Germany
considered that the project did not raise technological
or environmental concerns as the company used the
‘state of art' technology. Germany explained that there
was no technology that produced less
ammonia
sulphate as a by-product. With a production of 120 000
tonnes of caprolactam, around 165 000 tonnes of
ammonia sulphate are produced as a by-product, which
would be only around half of the amount indicated by
the ‘Industrieverband Agrar'. The most environmentally
friendly way to dispose of ammonia sulphate would be
its further use as fertiliser, as is planned by Capro
Schwedt.

VI. ASSESSMENT

1. Form of the aid

(24) As regards the doubts raised by the Commission on the
form of the proposed aid, Germany explained that the

(8) Data from CEH Marketing Research Report ‘Caprolactam', Chemical

Economics Handbook.

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20.6.2003

that

Allgemeinen

§44
ensure

Nebenbestimmungen
zu

applicable award rules in the German legal system (Nr 2
für
der
der
Projektförderungen
Bundes/Landeshaushaltsordnungen)
the
permissible aid intensity will not be exceeded. Any
cumulation of aid from the investment premium with
other aid that could exceed the allowable aid intensity
a proportional
would be
the
reduction of
Federal
the
improving regional
Government/Lander
(Gemeinschaftsaufgabe
economic
regionalen Wirtschaftsstruktur). On
Verbesserung der
the basis of
the Commission
considers that it can be ensured that no aid will be
granted that goes beyond the aid ceiling approved by
the Commission.

grant under
for
scheme

automatically offset by

confirmation,

structures

joint

this

including depreciation,
operating and capital costs,
refinancing and reinvestments. The tariff system would
be based on costs and would not produce profits for
It did not allow for cross-subsidisation
InfraSchwedt.
between
in
profitable
InfraSchwedt.

loss-making

activities

and

(29)

The Commission notes that Capro Schwedt is to use
the total chemical complex of
only a small part of
Schwedt. Other chemical companies, independent of the
caprolactam project, are also to establish themselves at
the complex during the five development phases. The
infrastructure
the
by
caprolactam project must accordingly also satisfy the
needs of these other companies.

InfraSchwedt

provided

to

2. The infrastructure project

(30)

(25)

the

formal

is part of

the development of

decision to initiate

In response to the doubts raised by the Commission in
its
investigation
procedure, Germany provided substantial additional
information as to the nature of the infrastructure set up
by Infra Schwedt. Germany indicated that the Capro
Schwedt project
the
chemical complex of Schwedt. The development is split
into five phases, of which the Capro Schwedt project is
to be the first. The Capro Schwedt project will make use
of only part of the available land (total 100 ha). For the
other four development phases, it is planned to establish
producers of plastics and other
in the
complex. The infrastructure layout could therefore take
into account not only the needs of Capro Schwedt.
in providing this infrastructure, needed
InfraSchwedt,
also to take into account
the other
companies which were to be established in the complex.
the
To support
for example, will be
power
needed for
and the
wastewater installations for the cracker (phase 5).

its view, Germany pointed out

the production of plastics

transformation plants,

the needs of

chemicals

that

the

supplying

companies. They were

they were not
but

(26) Germany provided additional information on the nature
of
to act
independently from the caprolactam producer. Germany
stated that
the
products
caprolactam production,
(oleum/sulphuric acid, cyclohexane and hydrogen) were
needed for the planned development of the chemical
complex as
to already existing
In contrast
chemical complexes, the chemical complex in Schwedt
was a newly created complex, where the supply of basic
chemical products needed to be established.

just needed for
their
that

such.

The Commission notes further that the project is to be
considered a single project, receiving from InfraSchwedt
only one
to its
infrastructure
premises. All the infrastructure costs within the Capro
Schwedt area are to be covered by Capro Schwedt and
the three supplying companies.

connections

set of

(31)

In view of the above and by taking into account the fact
that Germany confirmed that InfraSchwedt will charge
its products/services on a
competitive prices
non-discriminatory basis,
the Commission concludes
that Capro Schwedt does not benefit from any specific
infrastructure measures provided by InfraSchwedt.

for

(32)

The Commission concludes that there is no element of
state aid involved in the provision of infrastructure by
InfraSchwedt to the Capro Schwedt project.

3. Notification requirement

(33) Germany indicated total eligible investment costs of
EUR 311,11 million. The planned cumulative
aid
intensity is 28 % of the eligible investment costs and the
indicated aid per job created is EUR 589 223. Therefore,
pursuant to point 2.1 of the MSF, the aid is notifiable
individually and has to be assessed accordingly.

4. The relevant market

(27) Germany agreed with the Commission that the Capro
should be considered as a single
Schwedt project
project. Capro Schwedt and the supplying companies
were
infrastructure
connections. InfraSchwedt would not cover connection
supplying
costs between Capro Schwedt
companies.

to receive only one

and the

set of

(34)

(28) As to the tariff system of InfraSchwedt, Germany stated
its
charged by
that
products/services were to be market prices, covering the

InfraSchwedt

all prices

for

as

a by-product of producing

The relevant product market for determining the market
share comprises the product covered by the investment
project and any substitutes. The Commission has noted
that,
caprolactam,
ammonia-sulphate is produced, which can be sold as a
nitrogen fertiliser to agriculture. However, as the main
purpose of the project is to produce caprolactam (as a
raw material for synthetic fibres production), which the
company at present buys externally, the Commission
relevant product
considers

caprolactam to be

the

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market. (No separate NACE classification exists for this
market. The lowest available segmentation of the NACE
classification for caprolactam is the NACE code 24.14
(Manufacture of other organic basic chemicals)).

(39)

(35) Under point 7.6 of the MSF, the relevant geographic
market comprises usually the EEA or, alternatively, any
significant part of it if the conditions of competition in
that area can be sufficiently distinguished from other
areas in the EEA. As caprolactam is an interchangeable
commodity product, regardless of its provenance, and as
transport costs are relatively low, the EU as a whole, for
which reliable data is available,
is regarded as the
relevant geographic market.

(36) As regards the development of apparent consumption in
value terms (in EUR), Germany submitted the following
data (9):

Year

1995

1996

1997

1998

1999

(EUR million)

Worldwide (price/US, price/EEA)

3 910

3 890

4 800

4 910

4 860

4 130

3 550

4 270

4 280

3 540

EEA

756

708

863

949

742

5. Assessment under the multisectoral framework

(37)

Point 7.2 of the MSF states that ‘an investment project
should not be artificially divided into sub-projects in
order to escape the notification obligation'. The notified
project comprises four companies, the main producer of
caprolactam and three of its direct suppliers. The three
supplying companies, which so far exist only as ‘project
companies', will be set up in direct vicinity to Capro
Schwedt with the purpose to supply to it some of the
necessary products/services
the production of
caprolactam.
In notifying the project as a single
investment project, Germany thus complied with the
requirement laid down in point 7.2 of the MSF not to
divide the project artificially.

for

(38) Under point 3.1 of the MSF, in order to determine the
maximum allowable aid intensity for the proposal to
award aid,
the
maximum aid intensity (regional aid ceiling) which a
company could obtain in the assisted area concerned
within the context of the authorised regional aid system
valid at the moment of the notification.

the Commission has

to identify

(40)

(41)

(42)

(43)

(44)

Taking into account the overall project, Capro Schwedt
GmbH has to be considered a large undertaking. The
maximum allowable aid intensity (R) in the present case
is 35 % gross (10). A range of adjustment factors then
in
have
to be applied to that percentage
in
accordance with three specific assessment
order to calculate a maximum allowable aid intensity for
the project in question, namely the competition factor
(T), the capital-labour factor (I), and the regional impact
factor (M).

figure
factors,

6. Competition factor (T)

The Commission notes that the market share of Capro
Schwedt AG does not exceed 40 % in the relevant
market and will not exceed this percentage as a result of
the new investment.

are

that

The authorisation of aid to companies operating in
sectors
in structural overcapacity poses
particular risks for the distortion of competition. Any
capacity expansion not offset by capacity reductions
elsewhere will exacerbate the problem of structural
overcapacity. The sector or sub-sector will be established
at
the NACE
classification.

the lowest available segmentation of

The NACE code corresponding to the production of
caprolactam is 24.14, which comprises the manufacture
of a whole range of other organic basic chemicals. No
separate NACE classification exists for the sub-sector of
caprolactam. Caprolactam represents only a small share
in the relevant NACE code. Therefore, the Commission
considers that capacity data concerning NACE code
24.14 are not representative for the appraisal of the
capacity situation for caprolactam. Pursuant to point 3.4
of the MSF, the Commission will base its assessment of
the
apparent
consumption and will consider whether the investment
takes place in a declining market.

competition factor on the data for

five years,

this purpose,

the Commission compares

For
the
apparent consumption of the products in question with
the growth rate of EEA manufacturing industry as a
whole. A market is deemed to be declining if, over the
last
the average annual growth rate of
apparent consumption of the product is more than 10 %
below the
average of EEA manufacturing
industry as a whole, unless there is a strong upward
trend in the relative growth rate of demand for the
product. The market
is deemed to be absolutely
declining if the average annual growth rate of apparent
consumption over the last five years is negative (point
7.8 of the MSF).

annual

five years.

The MSF refers to the average annual growth rate over
is therefore the Commission's
the last
practice to look at apparent consumption over a period
of six years in order to calculate five growth rates. The
average annual growth rate of the EEA manufacturing

It

(9) Data from CEH Marketing Research Report ‘Caprolactam', Chemical

Economics Handbook.

(10) OJ C 340, 27.11.1999, p. 8.

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20.6.2003

industry as a whole comes to 6,12 % for the years 1995
to 2000.

(45) Germany provided data derived from CEH Marketing
‘Caprolactam', Chemical Economics
Research Report
Handbook on the apparent consumption for the period
1995 to 1999. On the basis of these data, the average
growth rate of apparent consumption on the market for
caprolactam was 5,42 %. The average annual growth
rate of manufacturing industry as a whole in the EEA
for the same period comes to 5,79 %. According to the
definition in the MSF, the sector would not be in decline
and the competition factor would remain unchanged at
1,0.

(46) However, more recent data from Eurostat, covering the
period 1995 to 2000, lead to the conclusion that the
caprolactam market is in relative decline. According to
of
consumption
this
caprolactam (in EUR) for the years 1995 to 2000 is:

information,

apparent

the

Apparent consumption of caprolactam

(EUR)

1995

1996

1997

1998

1999

2000

754 355 927

594 031 089

821 433 942

776 641 984

694 245 630

923 249 239

average

(47) On the basis of these figures, the average growth rate of
apparent consumption on the market for caprolactam
was 4,12 %. The
annual growth rate of
manufacturing industry as a whole in the EEA for the
same period comes to 6,12 %. The Commission has
based its assessment on these more recent data from
EUROSTAT. Consequently, pursuant to point 7.8 of the
MSF, the market for caprolactam is regarded as being in
relative decline, as the average annual growth rate is
significantly
of
manufacturing industry as a whole. In the light of the
above
a
competition factor of 0,75.

the Commission applies

considerations,

below that

(more

10 %)

than

(50)

(51)

(52)

initiation of the procedure, the Commission took the
view that, for a company to produce 120 000 tonnes
per year, a more normal level of job creation would be
around 400, which is well below the declared level of
528. This raised doubts, in particular as such a number
would result in the capital-labour factor being reduced
to 0,7.

the procedure,
In its comments on the initiation of
Germany agreed to calculate the aid initially on the basis
of a capital-labour factor of 0,7 and to pay out the last
instalment only after the Commission had verified the
correct
implementation of the project as regards the
creation of jobs and after the Commission had agreed to
the payment of the last instalment. The Commission
agrees to this approach.

the last aid instalment,

Consequently,
in accordance with point 3.10.2 of the
MSF, the capital-labour factor (I) for the adjustment of
the maximum aid intensity for the project at stake is, up
to be
to the payment of
ratio new
calculated at 0,7 (resulting
capital/jobs of EUR 827 775). Any additional
aid
amount, based on the creation of 528 jobs and
consequently a capital-labour factor (I) of 0,8, may be
the Commission has verified the
granted only after
creation of 528 jobs and has agreed to the payment of
the last instalment.

from the

8. Regional impact factor (M)

takes

factor

impact

into account

The regional
the
beneficial effects of a new aided investment on the
economies of
the assisted regions. The Commission
considers that job creation can be used as an indicator
of a project's impact
in terms of development of a
region. A capital-intensive investment may create a
significant number of indirect jobs in the assisted region
concerned and any adjacent assisted region. Job creation
in this context refers to jobs created directly by the
project together with jobs created by first-tier suppliers
and customers in response to the aided investment.

7. Capital-labour factor (I)

(48)

The capital-labour factor is used to adjust the maximum
aid intensity so as to promote those projects which
make a more effective contribution to the reduction of
unemployment through the creation of a larger number
of new jobs.

(53) As the project does not contribute directly to the
creation, by other companies in the same region, of new
jobs in a number exceeding 50 % of the jobs created by
the project itself, the regional impact factor is set at 1,0.

9. Maximum allowable aid

(49) According to Germany, the overall project will lead to
the creation of 528 permanent jobs, of which 448 will
be in Capro Schwedt and 80 with the suppliers. In the

(54)

In view of the foregoing, the maximum allowable aid
follows:
calculated
intensity
35 % × 0,75 × 0,8 × 1,0 = 21,00 % gross (point 3.10 of

as

is

20.6.2003

EN

Official Journal of the European Union

L 153/55

to an aid intensity of 28 % gross,

the MSF). The proposed aid of EUR 92,71 million,
equivalent
that
Germany intends to grant to Capro Schwedt is therefore
not
in conformity with the maximum allowable aid
intensity, calculated on the basis of the MSF.

(59)

10. Ex post monitoring

VII. CONCLUSION

of

the

the

light

above

considerations,

In
the
Commission concludes that the part of the notified aid
exceeding
intensity
calculated for this project according to the provisions of
the MSF does not fulfil the conditions to be considered
compatible with the common market,

the maximum allowable

aid

(55)

(56)

the sensitive nature of

the large mobile
In view of
investments involved,
it is essential that a mechanism
exists which helps to ensure that the level of aid actually
disbursed
the
beneficiary
Commission decision.

conforms

the

to

to

in

and the

provision

aid recipient

contains
event

For each aided project approved by the Commission
under the MSF, the Commission requires either that any
the
aid contract between the relevant authority of
a
Member
State
reimbursement
of
the
non-compliance with the contract or
the final
significant payment of the aid will be made only when
the aid beneficiary has satisfied the Member State that
the execution of the project is in compliance with the
Commission decision and on condition that
the
Commission, on the basis of information provided by
the Member State concerning implementation of
the
indicated its
project, has, within 60 working days,
agreement or raised no objections to the final payment
of the aid.

that

(57) Germany has agreed to calculate the aid intensity
initially on the basis of 400 created jobs and a
capital-labour factor of 0,7. The allowable aid intensity
will thus initially be 18,375 % (35 % × 0,75 × 0,7 × 1,0).
The Commission notes that the final payment of the aid,
based on the creation of 528 jobs and a capital-labour
factor of 0,8, will be made only when Capro Schwedt
has satisfied the Commission that the execution of the
project as regards the announced creation of 528 jobs
has been implemented and after the Commission has
agreed to the payment of the last instalment.

(58)

The Commission further notes that
the undertaking
concerning the ex post monitoring given by Germany
complies with the obligations laid down in point 6 of
the MSF,
in particular as regards the obligation to
communicate to the Commission a copy of the decision
granting the aid as well as an annual report on the
project and the other information and documents to
which point 6.4 of the MSF refers.

HAS ADOPTED THIS DECISION:

Article 1

The aid which Germany is planning to implement for Capro
Schwedt GmbH, amounting to EUR 92,71 (aid intensity: 28 %),
is incompatible with the common market
in so far as it
exceeds the maximum allowable aid intensity for the project of
21 %.

The aid may accordingly not be implemented above the aid
intensity of 21 %.

Article 2

The payments, with the exception of the final payment, shall
be made on the basis of an aid intensity of 18,375 %.

The final payment on the basis of an aid intensity of 21 % may
be made only when Capro Schwedt GmbH has demonstrated
to the Commission that 528 jobs have been created by the
project and after the Commission has agreed to payment of
the last instalment.

Article 3

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

Article 4

This Decision is addressed to the Federal Republic of Germany.

Done at Brussels, 13 November 2002.

For the Commission

Mario MONTI

Member of the Commission