EU Investigates German Aid
Oct. 09, 2002
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BRUSSELS, Belgium (AP) _ The European Union opened a probe Wednesday into German plans to grant 52 million euros ($51 million) in aid to DaimlerChrysler for an expansion at its Berlin engine plant.
The EU's executive Commission said the German government has not provided sufficient evidence to prove that the aid is compatible with EU fair competition rules.
Under the rules, a company may receive subsidies to compensate for the additional costs from its investment in one country compared to an alternative, less-costly site.
DaimlerChrysler said it considered investing in the Romanian city of Cugir instead of Berlin, but the Commission said that ``at this stage'' it doubted whether that consideration was ever serious.
It also questioned whether the costs of production in Berlin were really as much more as DaimlerChrysler claimed.
DaimlerChrysler says the investment in Berlin will create 729 jobs producing a new 6-cylinder diesel engine and camshafts.
Berlin notified the Commission in March that it intended to grant regional aid. The German authorities now have one month to provide regulators with additional information.