Commission to investigate fuel duty concessions

Legality of support for French, Italian, Dutch hauliers; Spanish farmers under state aid scrutiny

The European Commission today announced it is to investigate the compatibility with EU state aid rules of reductions in diesel fuel taxes granted to road hauliers in France, the Netherlands and Italy and to farmers in Spain. The concessions were made after widespread protests were triggered by high oil prices and fuel taxes at the end of last summer (ENDS Daily 19 September 2000) (ENDS Daily 21 September 2000).

The Commission justifies its investigation into hauliers' tax breaks by the need to establish that the measures do not lead to any "discrimination or distortion of competition that leads counter to the common interest". The Dutch, French and Italian governments now have a month in which to give their comments. In the meantime the Commission says it will continue its inquiries among other member states which adopted measures favouring road hauliers.

Tax concession for Spanish farmers have come under the spotlight as the Commission "queries the compatibility with the common market of the measures introduced by the Spanish government".

The EU executive is already investigating similar support given to Belgian, Spanish and French fisherman (ENDS Daily 1 February).

Efforts by a number of member states to pacify angry hauliers, fisherman and farmers caused a split between EU member states which bowed to demands and those which stood firm.

Although EU finance ministers found a compromise in February, when they agreed to phase out concessions made to French, Dutch and Italian hauliers within two years, the Commission is carrying out its threat (ENDS Daily 13 February) to investigate the tax breaks to see whether they are compatible with EU state aid rules.

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