EU gives OK to save Spanish shipbuilding industry

20th January 2005, Comments 0 comments

20 January 2005, BRUSSELS- The European Commission has cleared a deal designed to save Spain's shipbuilding industry that will see Spanish yards focus on making military rather than civilian vessels.

20 January 2005

BRUSSELS- The European Commission has cleared a deal designed to save Spain's shipbuilding industry that will see Spanish yards focus on making military rather than civilian vessels.

EU Competition Commissioner Neelie Kroes has received assurances from Spanish Finance Minister Pedro Solbes that the deal brokered last month complies with EU rules on fair competition, a spokesman for Kroes said.

"The commissioner wanted to be certain that these military shipyards would not be undertaking much civilian activity that would distort competition," spokesman Jonathan Todd told reporters.

"On the basis of assurances we have received from the Spanish government, we are now satisfied on that score," he said, explaining that military procurement is largely exempt from EU treaty provisions.

The future of the whole sector was thrown in doubt after Brussels demanded that Spanish state shipbuilder Izar repay 300 million euros of government aid that was found to be illegal under EU competition rules.

Under the deal between employers and union representatives, Izar will be split into civilian and military production sections.

The accord provides for the creation of a new public company for military production at Ferrol and Fene in the northwest, and Cartagena, Puerto Real and Cadiz in the south, where a small proportion of civilian output will also be affected.

"Mrs Kroes is satisfied with the arrangements. There is no distortion of competition in the (EU) treaty sense," Todd said, adding the commissioner now expects to receive a letter from Solbes putting the assurances in writing.

The letter will need to demonstrate "that the vast majority of remaining shipbuilding will be devoted to the military sector and therefore exempt from treaty competition rules", the spokesman said.
  
[Copyright EFE with Expatica]

Subject: Spanish news

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