Brussels, 28/12/2000 (Agence Europe) - The European Commission has authorised the state aid notified by Germany for its coal industry. As a result, the German industry will benefit from total state aid of DEM 9.2 billion for 2000 and 8.1 billion for 2001.
The Commission's decision requires an unprecedented reduction in the amount of operating aid provided. In its initial notification, Germany proposed the grant of operating aid for 2000 in the amount of DEM 5 billion and aid for the reduction of activity totalling DEM 2 billion. However, Commissioner Loyola de Palacio stated at the start of this year that the difficult operating conditions in the German coal mining industry, aggravated by the level of coal prices on the world market made it inevitable that the sums allocated to these two categories should be redistributed. After long and difficult negotiations with the German government, the latter proposed in late October a reduction in operating aid of DEM 1.2 billion and an increase of the same amount in aid for the reduction of activity.
Thus, whereas German authorities were authorised to grant operating aid of DEM 5.1 billion in 1999, the amount authorised for 2000 was brought down to 3.8 billion (a 25% cut). The reduction in the volume of aid will continue in 2001, since authorised operating aid now totals 3.4 billion and aid for the reduction of activity 1.9 billion. Given the very difficult social situation in regions affected by the decline in coal production, the Commission has agreed that the new reductions in activity resulting from the redistribution of the DEM 1.2 billion will not take effect until after 2002.