Brussels, 19/09/2001 (Agence Europe) - On Wednesday, the European Commission decided not to raise any objections to investment aid that the Spanish authorities plan to grant to GE Plastics SL for the construction of a new polycarbonate production plant. It also opened a detailed inquiry into alleged aid to the porcelain manufacturer Grupo de Empresas Alvarez (GEA), located in Vigo (Galicia).
The new General Electric (GE) polycarbonate production unit is to be built in Carthagena, in Murcia. It will be subsidised with EUR 152 million for a total cost of EUR 630 million (of which 582 million are likely to benefit from investment aid). The Commission assessed the measures in the light of the multisectoral framework for regional aid in favour of major investment projects. It took into account the high share (over 30%) that GE holds on both world and Community polycarbonate markets. In its decision, the European Commission points out that the 17.9% aid intensity proposed by the Spanish authorities, amounting to less than half of the regional aid ceiling allowed for the region of Carthagena (40%), is also lower than the ceiling fixed in the above-mentioned multisectoral framework.
Furthermore, the Commission decided to open the formal investigation procedure with regard to alleged aid granted in favour of Grupo de Empresas Alvarez (GEA). In 1977, it had authorised certain aid measures granted in favour of that group on condition that no further aid be provided to GEA during the implementation of its restructuring plan. The Commission seriously doubts that this requirement was fulfilled. In 2001, several complaints were filed from GEA competitors and former employees. They indicated that the company would have benefited at least since January 1997 from favourable treatment with regard to its debts towards the Social Security and Tax Administration amounting to several billion pesetas. The Commission recalls in this context its decision of 14 October 1998 relating to aid granted to Magefesa, a decision confirmed by the Court of Justice, in which it points out that the persistent and systematic non payment of taxes and Social Security contributions constitutes State aid prohibited by the Treaty. It also recalls that the European porcelain sector suffers from over-capacity.