92002E3777

WRITTEN QUESTION E-3777/02

by Christopher Huhne (ELDR) to the Commission

(23 December 2002)

Subject: Pirelli production

Is the Commission able to provide assurances that the decision by Pirelli to move fibre optic production from its plant in Hampshire to Italy is in full compliance with EU rules on state aid?

Answer given by Mr Monti on behalf of the Commission

(5 February 2003)

On 2 October 2002 the Commission approved planned aid of EUR 74,5 million for the firm Fibre Ottiche Sud in respect of a EUR 167,4 million investment project at Battipaglia, Campania, an assisted region in southern Italy. The project should create 311 direct jobs and 108 indirect jobs. The Commission took its decision under the rules laid down in the multisectoral framework on regional aid for large investment projects(1).

The Commission's general objective in implementing the multisectoral framework is to limit aid for large-scale projects in such a way as to avoid as much as possible adverse effects on competition while at the same time maintaining the attraction of the assisted area. In the case under consideration, the maximum admissible aid intensity was 28 % net grant equivalent (corresponding to the investment's gross intensity (44,5 %), discounted and less taxes).

The Commission is not aware that Pirelli's investment constitutes a transfer of production from the United Kingdom to Italy. It should also be pointed out that the investment project involves the extension of an existing fibre optic plant.

(1) OJ C 107, 7.4.1998.