Brussels, 06/11/2013 (Agence Europe) - On 6 November, the European Commission ordered Germany to recover €2.4 million of state aid (along with interest) that was wrongly granted from June 2006 to July 2011 by the Land of Brandenburg under a framework agreement for the delivery of wood between the German Land Brandenburg and HoKaWe Eberswalde GmbH (“HoKaWe”). The Commission says that the price adjustments under the agreement gave HoKaWe an undue economic advantage over its competitors.
The Commission's investigation showed that the initial reference price and the price adjustment clause were based on reasonable considerations and negotiations between the parties and a private market player could have entered into an agreement under similar conditions. However, in reality, the prices were not adjusted in accordance with this clause, but on the basis of the price adjustment formula, which was flawed and did not reflect the intentions of the parties, as described in the price adjustment clause. This led to significantly lower purchasing prices for HoKaWe and to an uneven distribution of the risk of price fluctuations, in breach of the price adjustment clause. As a reaction to internal legal opinions from 2010, pointing to possible state aid issues resulting from the application of the formula, the Land Brandenburg negotiated an amendment of the agreement, which came into effect in June 2011. However, from the entry into force of the agreement on 1 June 2006 until its amendment on 30 June 2011, the annual price adjustments were not made on market-conform conditions and led to significantly lower wood purchase prices for HoKaWe. Consequently, HoKaWe benefitted from an economic advantage consisting in the difference between the price actually paid and the market-conform price that would have resulted from the application of the price adjustment clause. The Commission has therefore ordered Germany to recover this advantage, amounting to € 2.4 million plus interest. (FG/transl.fl)