Brussels, 25/10/2002 (Agence Europe) - European Council President Anders Fogh Rasmussen said on Thursday that the EU had just reached agreement with the Czech Republic and Slovakia on the competition chapter. According to diplomatic sources, this agreement provides for: - the Czech Republic introducing a ceiling of 450 million euro a year until 2006 for its State aid to the steel industry, while reducing steel production; - Slovakia limiting, until 2009, its State aid to the steelworks of Kosice to some 500 million euro a year. Furthermore, Slovakia has undertaken to reduce its State aid to the automobile industry.
The NGOs Centre for Environmental Public Advocacy/CEE Bankwatch Network, as well as Friends of the Earth Slovakia regretted that European negotiators had not responded to their appeals of not closing the "competition" chapter of negotiations with Slovakia before taking account of their concerns. The NGOs claim, in particular, that foreign investors in Slovakia (notably Volkswagen Slovakia) receive incentives well beyond tax concessions, and cite: the right to land expropriation, direct financial subsidies for the construction of roads and water and sewage systems, electricity supply and the expansion of railway stations. Another problem they highlight is the fact that State aid especially benefit projects concentrated in the most developed regions, neglecting the rest of the country, where unemployment is highest.