Commissie opent onderzoek naar Duitse regionale investeringshulp voor Linamar (en)

Brussels, 9 November 2011 - The European Commission has opened a formal investigation to assess whether German plans to grant regional investment aid to the Canadian group Linamar for the construction of a new factory in Crimmitschau, Saxony, are in line with EU state aid rules. The opening of an investigation gives interested third parties the opportunity to comment on the measures under assessment. It does not prejudge the final outcome.

The project to produce engine and power transmission parts for motor vehicles would be carried out in an area eligible for regional aid, according to Article 107(3)(a) of the Treaty on the Functioning of the EU that states that aid can be granted to promote economic development of areas where the standard of living is abnormally low or where there is serious underemployment. The aid would consist of a direct grant and tax allowances for a total amount of € 26.65 million.

As the capacity created by the project exceeds certain thresholds set in the Regional Aid Guidelines for 2007-2013 (see IP/05/1653), the Commission is bound to open the investigation in order to carry out an in-depth assessment of the aid. The Commission considers that for projects where the aid beneficiary has a market share of more than 25% or the production capacity created by the project exceeds 5% of the market (while the growth rate of the product market concerned is below the EEA GDP growth rate), regional aid to large investments entails a higher risk of distorting competition.

The Commission will have to assess, in particular, whether and to what extent the aid is needed to incentivise Linamar to carry out the investment in Crimmitschau and whether the benefit of the aid for the region offsets the distortion of competition which it creates. The assessment will be carried out on the basis of the Commission's Communication on the in-depth assessment of regional aid to large investment projects (see IP/09/993).

Background

The Commission has opened in the last years a series of other formal investigations into regional investment aid projects in the car industry, as for FIAT Powertrain in Poland (see IP/11/139), BMW and Volkswagen in Germany (see IP/11/875) and for Audi in Hungary (see IP/09/1631), for which a final decision is still pending.

The non-confidential version of the decision starting the formal investigation will be published in the Official Journal of the EU and made available on DG Competition's State Aid Register website under the case number SA.33152. New publications of state aid decisions on the internet and in the Official Journal are also listed in the State Aid Weekly e-News.