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    2005/652/EC: Commission Decision of 20 October 2004 on the State Aid C 38/03 impl... (32005D0652)
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    EU - Rechtsakte: 13 Industrial policy and internal market
    (11) The Commission received comments from three parties. A party requesting anonymity made a joint comment for this case and State aid case C-40/00(6). It underlines that the investigated aid has created a serious distortion in the market of recreational ships. Another joint comment for this case and case C-40/00 was received from Royal van Lent Shipyard B.V. The company claims that aids granted by the Spanish government during the past years has been extremely prejudicial for many of the competitors in the market for mega yachts.
    (12) The Commission also received comments from IZAR. IZAR claims that the concerned capital injections fall under Article 296 of the EC Treaty, and that any problems concerning distortion of trade should be treated within the context of the cooperation procedure of Article 298 of the EC Treaty. IZAR also claims that the capital injected by SEPI is not State resources and in any case falls under the market investor principle. IZAR finally claims that the possibility of recovery of any aid provided to the public Spanish shipyards in 1997 is unacceptable since it is existing aid.

    IV.   COMMENTS FROM SPAIN

    (13) In the procedure, Spain provided the Commission with the following arguments on why, in its view, no State aid was involved in the concerned capital injections.
    (14) Firstly, Spain claims that SEPI acted as a private investor in a market economy, that aims at maximizing profits, and that the Commission did not prove that SEPI's resources comes from the State or are imputable to the State.
    (15) Furthermore, the capital was injected in the context of a plan for the company BAZAN, which used to be a military company. The capital was injected in order to cover a number of costs linked to this plan, developed in 1998. In particular, EUR […](7) million related to so-called externalisation of social costs linked to pre-pensions by former BAZAN employees. This amount was paid to insurance companies in the years 2000 to 2002, which pay out the pensions. The increased costs for these commitments explains, according to Spain, the additional capital injections from SEPI to IZAR in 2001 and 2002.
    (16) In addition, a further approximately EUR […] million had been paid for such social costs directly from BAZAN to some pre-retired employees.
    (17) The rest of the capital injected was, according to Spain, needed to cover investments in the military areas of the new company IZAR, amounting to EUR […] million, and for an increased need for working capital for military constructions.
    (18) Spain also stated that these measures should be analysed within the context of Article 296 of the EC Treaty, since the capital was provided to BAZAN, which according to Spain was a purely military company at the time of the injection of the capital.
    (19) Spain furthermore argued against the possibility that some of the aid authorised in 1997 would become incompatible in case the Commission would declare that further illegal aid has been provided to the public Spanish shipyards.
    (20) In reaction to the comments provided by third parties Spain fully agrees with all that was stated by IZAR, and denies that IZAR has an important activity in the luxury yacht sector.
    (21) Spain at a later stage of the procedure provided further information requested by the Commission, i.e. the estimated losses of the civil activities of IZAR, from 1 July 2000 to 31 December 2003 and information on the overhead costs of IZAR during this period.

    V.   ASSESSMENT

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