EU investigates Polish plan to grant aid to Fiat

The European Commission said Wednesday it has launched a probe into a Polish plan to grant aid to a project by the Italian car maker Fiat Group.


The European Union's competition guardian said it had doubts the aid meets EU guidelines on aid to large investment projects in relation to the market shares and production capacities of the Fiat Group.


"The commission welcomes aid to encourage investment projects in less-developed or high-unemployment regions. However, we have to be careful that the resulting distortions of competition do not outweigh the benefits of the aid, especially in sectors with overcapacity or other problems," said Joaquin Almunia, the commission vice president in charge of competition policy.


The project concerns the production of a new generation of petrol engines in Poland's Silesia region, an area eligible for regional aid because of its abnormally low standard of living and high unemployment.


But for large investment projects, i.e. projects with eligible investment costs of more than 50 million euros (68 million U.S. dollars), EU state aid rules require the commission to be watchful because they may carry a greater risk of distorting competition.


The investment costs for the Fiat project amount to 180 million euros (245 million U.S. dollars), among which Poland intended to grant aid of 40.9 million euros (55.8 million U.S. dollars) in the form of a tax allowance.
(Source:http://news.xinhuanet.com)