Brussels, 21/01/2005 (Agence Europe) - The European Commission has partially approved investment aid to De Tomaso Cutro for its planned greenfield car production plant in Cutro (Calabria, Italy). Italy notified regional aid amounting to €179 million in 2003 prices in support of a proposed €207 million investment project for the production of off road and sports vehicles. In July 2003, the Commission opened a formal state aid investigation procedure as it had doubts about the compatibility of the aid with the specific state aid rules for the car sector. According to these rules aid to the car sector notified before January 2003 has to be both necessary for the realisation of the project and proportional to the seriousness of the problems it intends to solve. The Commission concluded that the identified production sites were effectively an economically viable alternative and that the project can be considered mobile since the investment could have been carried out at Timisoara (Romania) for the off road model, and Modena (Italy) for the sports cars. The Commission established that the aid necessary for the project amounts to €81 million, expressed in 2003 prices and consequently, only this amount has been authorised by the Commission.
Since the case was notified in 2002, it was assessed under the state aid framework for motor vehicles in force at the time. The framework expired in December 2002. From January 2003, the motor vehicle sector has been integrated into the new Multisectoral Framework on regional aid for large investment projects. According to the new, simpler rules, projects in the motor vehicle sector are eligible for aid up to 30% of the maximum allowable for each region (compared to up to 100% under the old rules). This case was the last notified case to be assessed under the old car framework.