Brussels, 01/03/2001 (Agence Europe) - The European Commission authorised, on 28 February, a investment aid for regional purposes of EUR 40 million (ITL 78 billion) for the production of the new "Punto" model at the Fiat factory in Melfi (Southern Italy). Following a procedure opened in November 1999, it in fact acquired the conviction that the rules of the Community framework for State aid in the automobile sector have been respected.
The aid notified, which is granted in accordance with the Legge 488 system approved by the Commission takes the shape of a regional subsidy. The region of Melfi is recognised as an assisted area according to the meaning of Article 87 §3 (point a) of the EC treaty, which sets the ceiling applicable to regional aids at 35% in net grant equivalent (NGE).
As doubts existed as to the compatibility of the planned aid with the Community framework for State aid in the automobile sector, the Commission opened a formal investigation procedure that did not lead to any comments from third parties. The role of the Commission is to ensure that the aids granted are both appropriate to the seriousness of the problems to be resolved and necessary to the completion of the project. As for the need for the aid, the beneficiary must prove that he has a viable alternative location for his project; the European executive considers that the Fiat factory in Tichy, in Poland, would have been one. To appreciate the proportionality of the aid a "cost benefit analysis" was carried out comparing the costs that Fiat would have to bear to implement its project in Basilicate with those that the company would have had to shoulder to do so in Tichy. The aid intensity foreseen being below the ceiling applicable and the intensity of the regional handicap, that is to say the extra cost linked to locating the production in Melfi rather than Tichy, the Commission reached the conclusion that the Community rules governing State aid were respected and as a result authorised the project.