Environmental aid for EU steel firms questioned

European Commission scrutinises national motives for steel industry state aid applications

Some EU member states are trying to subsidise national steel businesses under the guise of improving the environment, the European Commission has reported. According to the EU executive's 2000 review of steel industry state aid applications, requests for aid aimed at environmental protection were found to be questionable more often than any other type.

Beset by rising international competition and a long-term fall in prices, many European steel firms seek, and get, government support, especially for restructuring. During 2000, the Commission made decisions on 17 state aid applications regarding steel companies, seven of which had environmental objectives.

Of these, only two were passed without objections - both applications for refunds on green taxes introduced in Germany and Sweden. Of five applications to grant investment aid for environmental protection purposes, the Commission gave only partial approval to one, opened investigations into another two, and rejected outright the remaining two. The rejected applications were both made by Italy, while the investigations concern applications made by Austria and Germany.

Follow Up:
European Commission competition directorate, tel: +32 2 299 1111, and the report.

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