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Tuesday, May 27, 2003

On the Seamy Side of the Street

News is a bit slow at the moment after the holiday weekend. this gives me an opportunity for a little time out on Spain. I noticed this in the Financial Times this morning. Since Brussels virtually never does anything about EU abuses in Spain, this couldn't have any connection with the recent Spanish posture on Iraq, now could it? Oh, how I wish we had an EU which conformed more to some of our earlier ideals. What is it Frans says, idealist but not naieve, realist but not cynical:

European regulators are to probe a €1.5bn ($1.8bn) cash injection by the Spanish government into Izar, Europe's second-largest shipbuilder, because they suspect the aid might be anti-competitive. The investigation, to be announced as early as Tuesday, is set to anger Madrid, which is believed to have argued that the European Commission has no powers over the aid. If the Commission's investigation, likely to last several months, finds the aid is illegal, Izar will have to pay the money back.The issue is politically sensitive in Spain, where state-owned Izar is a major employer. For this reason, the Brussels authorities are believed to have delayed the opening of the investigation until after last weekend's Spanish local elections.The probe could be controversial because the Commission has authorised European Union governments to subsidise struggling shipbuilders as part of a trade battle with South Korea.However, people close to the Izar case said Brussels is concerned the aid, dispensed between 2000 and 2002, gave the company an unfair advantage over EU rivals. They argue that some of the shipyards owned by Izar already received €800m in state aid in 1997 and, under EU rules, should not be granted any more subsidies until at least 2007."One of the key conditions attached to the approval was that the yards would not receive any further aid," the Commission said at the time. But Spain is believed to have told the Commission the new aid would be used to build military vessels - an area over which the Brussels authorities have no powers.The Commission declined to comment on Monday. Sepi, the Spanish government's industrial holding company that is responsible for Izar, said it had not received any formal communication from the Commission.
Source: Financial Times

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