Brussels, 01/03/2001 (Agence Europe) - On 28 February, the European Commission felt that the investment tax premium (Investitionszulagengesetz) in favour of the new German Lander and the city of Berlin were compatible with the European legislation on State aid. This premium constitutes, for the last ten years, the main aid tool to companies active in East Germany. With a provisions annual budget of more than EUR 2 billion, the aid is targeted at establishments from the manufacturing industry, certain services close to the market, the small urban business, and craft companies with less than 251 employees.
Notified to the Commission in 1997 by the German authorities, the initial law on investment tax premiums has seen two legislative modifications, one at the end of 1999 and the other at the end of 2000, in order to ensure its complete compatibility with Community rules on State aid. Among the last elements over which the German authorities and the Commission had to agree, are: - respect in the Brandenburg communes of the employment area of Berlin, following the example of what prevails in the Land of Berlin, on a maximum aid intensity of 20% net grant subsidy and the ban on all replacement investment aid. On 16 February 2001, the Federal government also undertook to not prolong the granting of aid towards equipment replacement, after 2004.