Biscuitman

EU big three hit back at state aid plans
31.01.2005 - 09:55 CET | By Honor Mahony
France, Germany and the UK are preparing a joint response to suggestions by the Competition Commissioner on overhauling the EU's state aid system.

They believe it is "unacceptable" to stop aid, provided under the supervision of the European Commission, to poor regions and are preparing a joint reply to Competition Commissioner Neelie Kroes' plans to reform state aid rules, according to French daily Le Monde.

Mrs Kroes announced her plans via a series of interviews last week.

She questioned whether rich member states should continue to support poor regions and pledged to steer aid away from "lame duck" national giants toward dynamic, smaller companies.

"I am talking about less and better state aid, focusing on those regions that really need state aid ... focusing on risk capital, research and innovation and on small- and medium-sized companies", said the Dutch Commissioner.

Her underlying idea, that it is time for new member states to profit, is what is concerning the EU's richest member states.

London, Paris and Berlin want to be able to continue to lure large companies to their poor regions such as the former east in Germany and the north of England.

Without a financial incentive, companies would probably choose to locate in the new member states where labour costs are cheaper.

Mrs Kroes has also run INTO phpbb_opposition from her colleague Industry Commissioner Günter Verheugen, who has in the past spoken out in favour of the industrial champions that she is trying to get rid of.

On Sunday, Mr Verheugen told German tabloid Bild that "nobody is thinking about taking regional support away from the new regions because Germany, as a whole, is a rich country".

"The whole of east Germany will remain a support area - that I can assure the minister presidents [the leaders of the new regions]", said Mr Verheugen.

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IF THE EU WAS THE ANSWER, IT MUST HAVE BEEN A STUPID QUESTION!