91999E2669

WRITTEN QUESTION E-2669/99

by Benedetto Della Vedova (TDI) to the Commission

(12 January 2000)

Subject: State aid to Philipp Holzmann AG

It has been announced that the German Government is to take various measures to facilitate the restructuring of Philipp Holzmann AG, the construction group.

The Commission's recent notice on the application of Articles 87 and 88 of the EC Treaty to State aid in the form of guarantees clarifies the circumstances in which State guarantees fall under the heading of State aid and how far they are compatible with Article 87 of the EC Treaty.

The provisions announced, loans amounting to DEM 150 million and guarantees of a further DEM 100 million, constitute State aid (specifically, aid for rescuing and restructuring, as defined in the Community guidelines published in OJ C 368, 23.12.1994) falling within the scope of Articles 87 and 88 of the EC Treaty.

In view of the above, does the Commission not consider that these measures taken by the German Government constitute a serious distortion of competition within the Community and breach the provisions on State aid in Articles 87 and 88 of the EC Treaty?

In the light of the statements by the Commissioner responsible for competition and the Governor of the European Central Bank on the coincidence of measures and proposals for State interference in the markets and the euro's weakness, does the Commission intend to take steps to reduce the number of possible exceptions to the prohibition on State aid contained in Article 87 of the EC Treaty? In particular, does the Commission not think it advisable to take action to modify, if not tighten up, the above-mentioned Community guidelines on State aid for rescuing and restructuring firms in difficulty, which are characterised by an excessively general and broad approval system?

Answer given by Mr Monti on behalf of the Commission

(9 February 2000)

Whether or not the measures of the German government constitute a serious distortion of competition has to be assessed on the basis of a detailed analysis taking into account the criteria of the Guidelines on state aid for rescuing and restructuring firms in difficulty(1). These guidelines which came into force on 9 October 1999 amended the previous guidelines from 1994 and have stricter criteria, for instance, with respect to the avoidance of undue distortions of competition and the one time, last time principle.

After a preliminary examination of the notification the Commission found that the aid raised doubts as to its compatibility with the common market. Therefore, on 18 January 2000 the Commission initiated proceedings in order to launch an in-depth investigation of the aid measures.

(1) OJ C 288, 9.10.1999.