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COMMISSION ASKS GERMANY TO RECOVER AID TO BREMER VULKAN

The European Commission decided on July 24 that state aid granted by Germany to its Bremer Vulkan shipyard was incompatible with EU state aid regulations and must be repaid. The EU executive's ruling confirms that there has been a misuse of restructuring aid to the German MTW-Schiffswerft and Volkswerit Stralsund shipyards, which were formerly part of Bremer Vulkan Verbund AG (BVV) and an illegal disbursement of a DM 112.4 million investment loan to MTW-Schiffswerft. After extensive investigations, the Commission concluded that DM 788.7 million of aid was illegally used by other parts of the BVV than the two Eastern German shipyards to which the aid was originally granted. It decided therefore that Germany must recover this amount in the framework of BVV's bankruptcy proceedings.

Treuhandanstalt (THA), the agency set up to carry out the privatisation of assets of the former East Germany, sold to BVV both MTW-Schiffswerft (1992) and Volkswerft Stralsund (1993) and provided quite a high level of funding for the comprehensive modernisation and restructuring of both yards. The Council of Ministers issued an exemption in 1992 for the granting of aid to Eastern German shipyards (Council Directive 92/68/EEC). This exception was subject to the condition that this aid benefit only shipyards in the former East Germany. Pursuant to the regulations of the Seventh Directive on aid to shipbuilding, strict limits on the use of aid apply to all shipyards in the European Union. For this same reason, the Commission has cleared partial amounts of the aid along with the restructuring process.

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Publication:European Report
Article Type:Article
Geographic Code:4EUGE
Date:Jul 25, 1998
Words:257
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