2023 Author: Eric Donovan | [email protected]. Last modified: 2023-05-21 15:44
BMW and VW are facing an examination by the EU Commission for state subsidies for two plants in Saxony. The competition watchdog is investigating whether the European rules have been observed.
The EU Commission is scrutinizing state aid for the Volkswagen and BMW car plants in Saxony. The Brussels competition watchdog opened a corresponding test procedure on Wednesday. One must clarify whether the European rules are being adhered to, the authority said.
Such an examination does not say anything about the result. If the financial injections are inadmissible, the companies may not receive them or have to repay them.
Cash injections for plants in Saxony
On the one hand, a public grant of 83.7 million euros, which is planned for the modernization of the VW plant in Zwickau, is being scrutinized. Europe's largest car manufacturer wants to change its processes for the production of small and medium-sized cars there and invest a total of 700 million euros. The group emphasized that this is a routine procedure and not controls based on suspected irregularities.
"The basis is a regular, normal process, as required by European law," it was said in Zwickau. The funds had already been applied for in 2009 as part of a regional economic development program in Saxony. They would be used to advance production and environmental technologies and to secure jobs. As part of its "usual procedure", the Brussels Commission has now started the main investigation into the investment grants. "The Commission has not yet made a decision in this or that direction."
At BMW, the EU authority is assessing aid amounting to 46 million euros that Germany intends to grant for the production of electric cars at the BMW plant in Leipzig. It is about the battery-powered model i3 and the hybrid vehicle i8. In total, the investment project amounts to 368 million euros. A BMW spokesman said it was “a normal process” for the Commission to examine state aid.
Certain EU rules apply to state aid in structurally weaker areas such as eastern Germany. The criteria are the company's market shares, the creation of new jobs and the consequences for competitors.
At the same time, the EU Commission approved EUR 219 million in aid for an investment project by the US chip manufacturer Globalfoundries in Dresden. This allows the company to expand its facilities. The EU Commission decided that the aid was appropriate and secure jobs. (dpa)
