91999E0782

WRITTEN QUESTION E-0782/99

by John Iversen (PSE) to the Commission

(6 April 1999)

Subject: Aid for shipyards in the EU

On 26 January 1999 the Danish shipyard Aarhus Flydedok A/S went bankrupt with the loss of some 2000 jobs. The bankruptcy is bound up with the unfair conditions of competition in the shipbuilding industry. Shipyards in some Member States apparently still receive state aid whereas other have to manage on market terms, which does not seem to fit in with the objectives of EU policy. The most recent example of this is the German shipyard Meyer Werft, which has succeeded in concluding a agreement to build two ships for Indonesia on the basis of developing country resources.

1. What initiatives does the Commission intend to take to put an end to state aid in this sector in the EU?

2. How are OECD negotiations proceeding between the EU, the USA, Japan and Norway on abolishing state aid for shipbuilding?

Answer given by Mr Van Miert on behalf of the Commission

(3 May 1999)

1. The possibilities to grant state aid to the shipbuilding industry within the Community have gradually been reduced in the past years. Furthermore, the Commission monitors closely the state aid granted to this sector. Unfortunately, the Organisation for economic cooperation and development (OECD) agreement has not entered into force as expected. Therefore, the Commission in 1998 proposed to the Council Regulation (EC) 1540/98 of 29 June 1998, establishing new rules on aid to shipbuilding(1). According to this Regulation which entered into force on 1 January 1999, contract related aid for shipbuilding will come to an end on 31 December 2000. The Regulation continues to permit operating aid in the form of development assistance to developing countries. However, it imposes stricter conditions than those previously in force in the seventh shipbuilding Council Directive 90/684/EEC of 21 December 19990 on aid to shipbuilding(2). In fact, to avoid development aid being used as hidden operating aid to a yard, the Member State must now demonstrate to the Commission that the offer of development assistance is open to bids from different yards. Furthermore, it should be noted that all development aid must be notified individually and approved by the Commission. In all cases the Commission must verify the particular development content of the aid in order to ensure that the project contains genuine development aid.

2. The prospects of ratification of the OECD shipbuilding agreement by the American Congress are not very encouraging. The option of exploring the possibility to implement the OECD agreement among "the four" (without the United States) has been opposed by the Community industry and not supported by a majority of Member States. Alternative options will be discussed during the next meeting within the working party no6 of the OECD, on 31 May 1999.

(1) OJ L 202, 18.7.1998.

(2) OJ L 380, 31.12.1990.