Commissie spreekt zich uit over Spaanse staatssteun aan scheepsbouw-sector (en)

Today the European Commission decided that aid provided to the public Spanish shipyards is not in line with EC rules on State aid to shipbuilding. The Commission has established that State holding company Sociedad Estatal de Participationes Industriales (SEPI), in 1999 and 2000, granted aid worth €500 million to the civil public shipyards that are today all owned by IZAR. The aid took the form of a capital injection, loans and a purchase price above market value. As IZAR paid back the loans amounting to € 192.1 million to SEPI, the sum to be reimbursed by IZAR will only amount to € 308.3 million, plus interest. The Commission concludes that the above amount constitutes further state aid which, after the approval of a final restructuring package of € 1,900 million, can no longer be approved under the EU shipbuilding aid rules.

The object of today's decision are a number of transactions that took place between 1999 and 2000 involving SEPI and its subsidiaries Astilleros Españoles (AESA), the former holding company of the public shipyards, and Bazán, the military shipbuilding group. These transactions resulted in the July 2000 merger of all public Spanish yards into Bazán, which then changed name to IZAR. Since the Commission suspected that these transactions might have contained state aid, it opened a formal investigation¹ on 12 July 2000, was extended² on 28 November 2001 and further extended³ on 27 May 2003.

Based on the facts that have been established during the formal investigation the Commission concludes that the state holding company SEPI undertook the following transactions, which entailed further state aid to the public Spanish shipyards:

• An excess purchase price paid by SEPI when AESA sold three shipyards (Cadiz, Juliana and Manises) to SEPI in 1999. According to the Commission's calculation the purchase price paid by SEPI contained an aid element of € 55.9 million. The aid benefited the remainder of civil shipyards still owned by ASEA, i.e., Puerto Real, Sestao and Sevilla;

• A 1999 SEPI loan amounting to € 192.1 million to the three shipyards Cadiz, Juliana and Manises;

• A capital injection by SEPI of € 252.4 million to AESA in 2000, benefiting the remaining ASEAN civil shipyards Puerto Real, Sestao and Sevilla.

Since Spanish shipyards after the final restructuring package of 1997 are no longer eligible for restructuring aid and since none of aid measures described above could be approved on any other base available under the State aid provisions, the aid identified above should be recovered.

All the shipyards benefiting from the aid were taken over by Bazán/IZAR from SEPI and AESA, respectively, for a symbolic price, and not in open and transparent tendering procedures. Furthermore, the shipyards benefiting from the aid were, at the time the aid was provided, legal entities but are now profit-centers without legal personality within the IZAR group. For these reasons IZAR is now responsible for the recovery of the aid.

However, in 2000 IZAR paid back the loan of € 192.1 million to SEPI, the sum to be reimbursed by IZAR will amount to €308.3 million, plus interest.

The Commission is aware that the consequences of this decision may be serious for IZAR, its shipyards and its employees. However, the Commission has received numerous complaints from shipyards in other EU Member States, and even from Spanish competitors. Several of the complainants argue that job losses have already occurred in their companies as a result of suspected illegal state aid provided to the public Spanish shipyards over the last years.

Background

In 1997 the Commission and the Council approved restructuring aid to the public Spanish shipyards amounting to € 1,900 million⁴ on the condition that no further such aid could be provided. The restructuring period lasted from 1994 to 1998, after which the shipyards should have become profitable. This did not happen, and the shipyards have continued to generate losses.

In 1999 the Commission decided that 111 million euro provided in 1998 to the public Spanish shipyards could not be approved and had to be recovered. The Court of Justice upheld the decision after it was challenged. The Commission considers that, still today, this aid has not been correctly recovered and is considering further legal actions.

Today's decision leaves intact its policy with respect to unfair competition from Korea

The Commission does not deny that some problems of the public Spanish shipyards are linked to the unfair practices of Korean shipyards. However, it has to be underlined that many other EU shipyards, while facing the same international situation as the Spanish yards, have managed to generate much better financial results.

The Commission would like to underline that European Community has a coherent policy in support of EU shipyards, which face unfair competition from Korean shipyards. This policy consists of three main elements.

• WTO procedure. The Commission has launched a dispute settlement procedure in the WTO against Korea challenging restructuring aid and export aid and the price depression these measures have caused. This procedure is currently ongoing in Geneva.

• Temporary defense mechanism. The Commission already in year 2001 proposed a temporary defensive aid⁵ to help EU shipyards face the unfair Korean competition in market segments particularly hit, such as product-, chemical- and LNG-tankers and containerships. This aid, of up to 6% of the contract value per ship, is available since October 2002 and was recently prolonged until 31 March 2005.

• "LeaderSHIP⁶ 2015" is a Commission initiative aiming at strengthening the competitiveness of EC shipyards. The Leadership 2015 Group has identified a number of priorities in the field of maritime industries: strengthening R&D and innovation, establishing a level playing field at world level, developing financial and guarantee schemes, ensuring the protection of intellectual property rights, and providing access to a skilled workforce. Implementation of these priorities will be subject to particularly close scrutiny. In both cases, this will mean implementing the guidelines proposed by the Commission and adopted by the Council on the basis of the recommendation of the High-Level groups.

  One if the first results of LeaderSHIP is support for innovation, and was included in the new Framework on state aid to shipbuilding⁷, which is applicable since 1 January 2004 and which allows up to 20% innovation aid for shipbuilding for the innovative parts of the project. Shipbuilding is the only industrial sector in the EU that has access to such aid.

  The Commission believes that further consolidation, respecting competition rules, can generate benefits at all levels of activity, commercial and naval shipbuilding, and ship repair.

  ¹  OJ C 328, 18.11.2000, p.16. Press release IP/00/760, 12/07/2000

  ²  OJ C 21, 24.01.2002, p.17. Press release IP/01/1672, 28/11/2001

  ³  OJ C 199, 23.8.2003, p.9. Press release IP/03/754, 27/05/2003

  ⁴  OJ C 354, 21.11.97, p.2. Press release IP/97/646, 15/07/1997

  ⁵  OJ L 172, 2.7.2002, p.1, Press release IP/02/945, 27/06/2002

  ⁶  COM(2003) 717 final of 21.11.2003,

  ⁷  OJ C 317, 30.12.2003, p.11. Press release IP/03/1607, 26/11/2003