Brussels, 16/11/2000 (Agence Europe) - The European Commission announced hat it has initiated an investigation over non-notified aid granted by the German Lander of Thuring to the porcelain manufacturer Khala Porzellan GmbH and to the company that succeeded it, Khala/Thuringen Porzellan GmbH. The investigation covers a sum of EUR 34.14 million, which could "constitutes an illegal aid incompatible with the common market". The Commission also called for information on an addition aid of EUR 41.52 million, which "does not seem to be covered by an authorised system".
The first company Khala posted losses since its privatisation and was declared bankrupt in 1993. The second Khala was created in November of the same year. The Commission doubts that the two companies are different and that the aid provided are justified by the Community rules on competition, including the guidelines on the safeguarding and restructuring of companies in difficulty. It notes that "the porcelain market suffers from overcapacity", which reinforces fears that the aid distorts competition. The Commission has not set any deadline for the duration of its investigation, the normal duration is around 18 months.