Brussels, 19/07/2001 (Agence Europe) - On 19 July, the European Commission authorised a series of aid schemes to German companies and to one Greek company. On the other hand, it reduced the amount of aid planned for Volkswagen for the building of a new plant in Dresden.
The Commission gave its go-ahead to investment aid of EUR 27.6 million to Kartogroup, based in Leuna (Sachsen-Anhalt). The investment concerns setting up a tissue plant to produce toilet paper and kitchen towels. Total investment costs amount to EUR 85 million and the aid approved represents 35% of the eligible investment costs. The investment project creates 154 permanent jobs in an area suffering from high unemployment. The Commission approved the aid since it found the aid to be compatible with the rules applicable to regional aid for large investment projects.
Again in Germany, the Commission decided not to oppose the granting of a subsidy of EUR 60 million in favour of a joint research project lasting five years concerning extreme ultraviolet lithography (EUV). This technique is one of the most important stages in the manufacture of integrated circuits. The aid approved is aimed at encouraging Germany's participation in a joint Eureka project aimed at developing EUV lithography in Europe, a project that could strengthen the position of European providers on the semi-conductor market by allowing them to acquire expertise and intellectual property rights. The German section of the project concerns seven large companies, three SMEs and eleven public non-profit-making public research centres.
The Commission also decided not to raise any objection to State aid in favour of the German company Zentrum Mikroelektronik Dresden AG (ZMD), which manufactures semi-conductors in Saxony. The company was awarded a total of EUR 164 million for restructuring purposes between 1993 and 2001. It is felt, in Brussels, that this restructuring followed a coherent and realistic plan. Furthermore, given the modest share that the company holds on the semi-conductor market, the Commission could not conclude there was any undue competition distortion. It also took into account the fact that Sachsenring Automobiltechnik (SAG), which bought up ZMD in 1999, made a significant contribution to the restructuring.
Regarding Volkswagen, the Commission decided that Germany could pay around 85% of the regional aid to investment that it planned to grant the company for production of the future D1 model in a new plant located in Dresden, the "gläserne Manufaktur" (transparent factory). After the formal examination procedure, the Commission decided that aid amounting to DM 145 million for a total investment of nearly DM 1 billion was compatible with the Community rules on State aid and with the State aid framework relating to the automobile sector. An amount of DM 25.7 million is considered incompatible with the common market and cannot be awarded. The German authorities had affirmed that the new model could also be built in the Czech Republic and that aid was necessary to keep up this investment in Germany.
Finally, the Commission decided not to raise objection to the project by the Greek government to grant investment aid to Hellenic Petroleum SA. The ceiling for this aid is EUR 38 million for eligible spending of 117 million. Aid will be for the construction of an integrated production plant, composed of two units that will produce different kinds of thermoplastic polypropylene. Greece does not for now have any polypropylene production plant. Aid was evaluated in the light of the multi-sectoral framework for regional aid to major investment projects. Given that the maximum aid intensity in the sector considered is 40% for this kind of project and that the notified aid intensity is only 30.92%, the Commission concluded the aid was compatible with the common market.