91998E3287

WRITTEN QUESTION E-3287/98

by Paul Rübig (PPE) to the Commission

(9 November 1998)

Subject: Restructuring measures in compliance with EU rules

One form of promotion at national and European level is financial assistance for the restructuring of firms. This policy should be fully endorsed provided that balanced market conditions are maintained and the preconditions are observed.

However, restructuring processes often lead to concentration in the market. The first to be affected by this are small and medium-sized enterprises, which also create and safeguard many jobs. This is true, for example, of the current situation in the Austrian bread and confectionery industry, where small and medium-sized craft enterprises account for 80 % of commercial production. Applications for assistance made by certain large enterprises under the Austrian Labour Market Promotion Act should therefore be examined for compliance with the competition law of the European Communities.

Does the Commission share the questioner's concern about the situation in the Austrian bread and confectionery industry?

How does the Commission ensure that the same promotional measures are open to all producers, thus preventing this situation from causing distortions of competition?

Answer given by Mr Van Miert on behalf of the Commission

(15 December 1998)

The Commission has already been made aware of a case in which aid for restructuring is said to have been sought by an enterprise in the Austrian bread and confectionery industry (the Honourable Member is referred to the answer the Commission gave to Written Question E-3003/98 by Mr Hager(1)). The Commission is naturally concerned by any state aid which distorts competition where it affects trade between Member States. Such aid needs to be notified to the Commission and examined against the provisions of the EC Treaty (Articles 92 and 93) before it can be granted.

Under the rules which the Commission has prepared for the exercise of its discretionary powers under these articles, aid for the rescue and restructuring of firms is restricted to firms which are in difficulty as defined in the relevant guidelines and which are as a consequence unable to finance such restructuring themselves. Such aid is not therefore open to all producers. It is however subject to the principle of necessity, that is, it must be the minimum necessary to restore the company's viability and to carry out the restructuring plan which has received the Commission's prior approval. By this means the distortion of competition is minimised. Provided this principle and the other provisions of the guidelines are met, the Commission may approve the aid.

(1) See page 38.