Brussels, 03/04/2002 (Agence Europe) - On Wednesday, the European Commission decided to open formal investigation procedure against aid that the German authorities are proposing to grant to BMW for a new car plant.
Last December, the German authorities notified regional aid to investment granted to BMW AG in favour of a new car plant in Leipzig. The amount of the investment is around EUR 1.2 billion. Germany plans to grant aid of EUR 418.6 million, that is, aid intensity of 34.7%. The project is to create some 2,600 new direct jobs in the plant. According to the German authorities, the best alternative location to Leipzig would be Kolin in the Czech Republic.
Leipzig was recognised by the Commission as being part of an assisted region under Article 87 of the EC Treaty. The regional aid ceiling is normally 28% for large companies but may reach 35% if certain conditions are fulfilled. The derogation may be granted at the request of a Land (in this case the Land of Saxony) and subject to approval by the relevant national committee on regional aid (GA-Unterausschuss), where all German Länder as well as the German federal government are represented. Germany has pointed out that these conditions have been met. The Commission considers that the information provided so far by Germany is not sufficient to be able to establish that the aid project is conform to the principles given in the Community framework for State aid in the car sector, mainly with regards the proportionality of the aid as shown by the results of the cost-benefit analysis. It has therefore decided to open the formal investigation procedure in order to give Germany, as well as all the other parties interested, an opportunity to put their observations forward.