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Brussels, 20th December 2006

State aid: Commission opens in-depth inquiry into proposed restructuring aid to Bison-Bial in Poland

The European Commission has opened an in-depth investigation to establish whether the €8 million aid the Polish authorities intend to grant for the restructuring of machine-tool manufacturer Bison-Bial is compatible with the EC Treaty rules on state aid. On the basis of the information currently at its disposal, the Commission doubts whether the notified restructuring plan is sufficient to restore the firm's long term viability and has concerns that the aid would create undue distortions of competition in the machine tool sector, which already suffers from overcapacity. The opening of an in-depth investigation allows interested parties to comment on the proposed measures. It does not prejudge the outcome of the procedure.

EU Competition Commissioner Neelie Kroes said: “We have to make sure that the restructuring plan restores the long-term viability of the company and that appropriate measures are taken to limit the distortion of competition. The aid cannot simply shift the difficulties of Bison Bial to other producers and their workers in other Member States.”

In May 2006 Poland notified to the Commission the planned restructuring aid to Bison-Bial, which amounts to €8 million (PLN 30 million).

The company produces parts of machine tools, a sector in overcapacity in the EU. The company started to make large losses in 2001, due to the increase in value of the zloty, difficulties of the parent company and the slump in its main export markets. The workforce went down from 1680 workers in 2000 to 950 in 2006.

After a preliminary assessment, the Commission doubts that the restructuring plan is sufficient to restore the long term viability of the company and to avoid a repetition of the difficulties that started in 2001. The Commission also observes that the sector in which Bison-Bial operates is in overcapacity in the EU and no measures are proposed to limit the distortion of competition created by the aid. Accordingly, at this stage the Commission is concerned that the aid would simply shift the difficulties of Bison-Bial to other producers and other workers in the EU.

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