European Commission probes Polish machine tool aid
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The European Commission has opened an in-depth investigation to establish whether the €8 million aid 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.
The company produces parts of machine tools, a sector in overcapacity in the EU, says the Commission. 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 went down from 1680 workers in 2000 to 950 in 2006.
On the basis of the information currently at its disposal, the Commission doubts whether the notified restructuring plan is sufficient to restore the firm's long term viability and has concerns that the aid would create undue distortions of competition in the machine tool sector, which already suffers from overcapacity.
The opening of an in-depth investigation allows interested parties to comment on the proposed measures. It does not prejudge the outcome of the procedure. “We have to make sure that the restructuring plan restores the long-term viability of the company and that appropriate measures are taken to limit the distortion of competition. The aid cannot simply shift the difficulties of Bison Bial to other producers and their workers in other Member States," said EU Competition Commissioner Neelie Kroes.
