BRUSSELS, Jul 1 (EUROPA PRESS) –
The European Commission announced on Monday the opening of an in-depth investigation to assess whether Spain’s plan to grant 20.7 million in aid to the PSA Peugeot Citroën plant in Vigo complies with European standards on State aid for regional purposes , as reported in a statement.
Spain notified in November 2017 to the European authorities its intention to grant 20.7 million in public aid to said plant within its project to invest 500 million in new production lines to launch new vehicles and improvements in the production process of the factory . The work in both cases had begun in April 2015.
“The Commission will thoroughly investigate whether the planned aid from Spain is really necessary for Peugeot to invest in truly innovative production processes in Vigo and if they are going to develop the region without unduly distorting competition or undermining cohesion in the EU,” summarized the Competition Commissioner, Margrethe Vestager.
The Danish has stressed that public investment “is important to promote the economic growth of disadvantaged regions in Europe”, but the EU Executive must “avoid harmful competition” among the countries of the EU bloc.
Member States can boost the economic development and employment of regions considered “disadvantaged” and promote regional cohesion through public aid, but in order to be approved by Brussels they must meet certain conditions. For example, they should encourage private investment, limit themselves to the minimum necessary and not attract investment from an equal or more disadvantaged region of another community partner.
In particular, the Community Executive has the suspicion that this aid may have attracted the investment project to the detriment of another more disadvantaged European region. He also thinks that PSA could have made the investment in Vigo without the need for state aid.
Brussels also doubts that the new production process in the plant is sufficiently innovative so that the company can benefit from the exception of the rules that allow granting public aid to projects of large companies in existing facilities.
In addition, the Commission is not convinced of the contribution of such aid to regional development, as well as its suitability and proportionality. Finally, it can not rule out having negative effects on the competition of certain segments of the passenger car market.