Brussels, 21/12/2006 (Agence Europe) - The European Commission has opened an in-depth investigation to establish whether the €8 million aid that the Polish authorities intend to grant for the restructuring of machine-tool manufacturer Bison-Bial is compatible with the EC Treaty rules on state aid. On the basis of the information currently at its disposal, the Commission has doubts about the notified restructuring plan's effectiveness and has concerns that the aid would create undue distortions of competition in the machine tool sector, which already suffers from overcapacity.
Bison-Bial produces parts of machine tools. The company started to make large losses in 2001, due to the increase in value of the zloty, difficulties of the parent company and the slump in its main export markets. The workforce decreased from 1680 workers in 2000 to 950 in 2006. In May 2006 Poland notified the Commission about the planned restructuring aid to the company, which amounts to €8 million (PLN 30 million).
After a preliminary assessment, the Commission doubts that the restructuring plan is sufficient to restore the long term viability of the company, or to avoid a repetition of the difficulties that started in 2001. The Commission also observes that the sector in which Bison-Bial operates is in overcapacity in the EU and no measures are proposed to limit the distortion of competition created by the aid. Accordingly, at this stage the Commission is concerned that the aid would simply shift the difficulties of Bison-Bial to other producers and other workers in the EU. (cd)