91999E2172

WRITTEN QUESTION E-2172/99

by Salvador Jové Peres (GUE/NGL) to the Commission

(29 November 1999)

Subject: Investment aid for flax processing

The Order of 5 April 1999 concerning a call for projects under Law 50/1985 on regional incentive measures, published in the Boletín Oficial del Estado Español (Official Bulletin of the Spanish State) of 25 May 1999 (p.197), grants a subsidy of Ptas 20 160 470 to the firm Colisur 2000 Ltd., Picón, Ciudad Real.

Under paragraph 2(12) of the annex to Commission Decision 94/173/EC(1) of 22 March 1994 on the selection criteria to be adopted for investments improving the processing and marketing conditions for agricultural and forestry products, All investments in the flax and hemp sector are excluded except where they concern products for new non-food uses or modernisation without increase in total capacity in the region concerned.

In the Commission's opinion, is the subsidy granted to Colisur 2000 compatible with the terms of this Commission decision and with other legislation in force?

(1) OJ L 79, 23.3.1994, p. 29.

Answer given by Mr Fischler on behalf of the Commission

(26 January 2000)

Law 50/1985 on regional aid measures and the provisions implementing those measures constitute regional State aid scheme No 38/87, compatible with the common market and authorised by the Commission on 1 June 1987.

The purpose of the scheme is to provide financial support for productive investment in certain sectors in certain regions of Spain, granting assistance at a selective rate, so as to achieve a balanced distribution of economic activities over the country.

This scheme appears, on the face of it, an appropriate instrument to support the investment project mentioned by the Honourable Member, Colisur 2000 Sociedad Limitada, because the project relates to the agri-industrial sector (flax) and is situated in Castile-La Mancha, and in view of the intensity of aid, which is 17 % of the cost.

As this project involves agricultural products, it must, in addition to meeting the requirements imposed on all projects irrespective of sector of activity, comply with the Guidelines and appropriate measures for State aid in connection with investments in the processing and marketing of agricultural products(1), and, as it involves flax, with point 2.12 of the selection criteria for investments annexed to Commission Decision 94/173/EC of 22 March 1994 on the selection criteria to be adopted for investments for improving the processing and marketing conditions for agricultural and forestry products and repealing Decision 90/342/EEC(2).

The management of the State aid scheme, including the analysis of each individual project and the selection of the most deserving, is up to the national Government and the regional authorities in accordance with their respective responsibilities. Consequently, the Commission has no detailed knowledge of the content of individual projects in receipt of a subsidy under this scheme.

However, the selection process established by the aforementioned arrangements for implementing Law 50/1985 (which were notified to the Commission in the course of authorisation) should ensure that all the aid granted is allocated to investment projects fulfilling the requirements of the national and Community legislation applicable. In the case of Colisur 2000, S.L. these requirements include the relevant selection criteria.

At all events, if the Commission received evidence that the conditions of the authorised aid scheme had not been fulfilled, it would take action in accordance with the procedure laid down in Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty(3).

(1) OJ C 29, 2.2.1996, p. 4.

(2) OJ L 79, 23.3.1994, p. 31.

(3) OJ L 83, 27.3.1999, p. 1.