92000E2520

WRITTEN QUESTION E-2520/00

by Glyn Ford (PSE) to the Commission

(2 August 2000)

Subject: Transparency of State aids

Commissioner Monti in his answer to my question E-1338/00(1) Transfer of jobs from the United Kingdom to Germany due to tax credits stated that it is important not to overestimate the importance of aid in firms' decisions. Although aid may affect a choice of a new location, it is much more doubtful that it has a decisive influence on a decision to close or reduce the existing one. I would have to doubt Commissioner Monti's assertion. If state aid is so ineffective, logically Member States would stop offering these inducements to attract jobs and industry into their regions. However there seems to be little evidence that in the absence of Community pressure the volume of state aid has diminished.

Is the Commission claiming that the DM seven billion subsidy to the German coal industry has had no impact on jobs and industry? More importantly, my constituents whose jobs have been lost with the transfer of the work to Germany will be more concerned that the motivation was influenced by the rumoured German tax credits.

Will the Commission confirm whether such tax credits were given out or not? If they cannot provide this information how can they possibly draw any conclusion as to the motivation behind the decision?

(1) OJ C 53 E, 20.2.2001.

Answer given by Mr Monti on behalf of the Commission

(27 September 2000)

The Commission's previous answer to the Honourable Member's written question E-1338/00(1) did not state or mean to imply that aid is ineffective. It is clear that state aid can help to attract investment projects to a particular area, and this is why the Commission allows higher levels of aid in less developed areas of the Community (such as Saxony, where the investment of concern to the Honourable Member is located). Indeed, one reason for state aid control is to ensure that aid offered in these regions is not outbid by others which do not have the same handicaps. As for aid to the German coal industry, the Honourable Member is correct to suggest that without such aid the sector would be in the most severe difficulties.

Concerning overall volume of aid, the Commission has noted, most recently in the eighth survey of state aid(2), a continuing decline but has also stressed the importance of maintaining this current overall downward trend.

In the case to which the Honourable Member refers, the Commission has enquired and has been informed by the German authorities that no decision on an individual award of aid has yet been made. However, under the Investitionszulage and Gemeinschaftsaufgabe schemes, and in conformity with the Community's regional aid guidelines, the Commission has authorised Germany to grant certain aid to investment in the form of tax credits and grants in order to allow the authorities at Federal and Länder level to promote investment, in particular in the less developed areas of Germany, including the New Länder. Individual cases which conform to the Commission's authorisation would not normally be the subject of an individual notification or information to the Commission.

(1) OJ C 53 E, 20.2.2001.

(2) COM(2000) 205 final.