EU Regulator Tells Spain To Recover Shipyard Aid

BRUSSELS/MADRID, July 17 (Reuters) – The European Union competition regulator has ordered Spain to recover state aid given to shipyard investors, saying the measure gave them an unfair advantage over rivals.

“Economic interest groupings and their investors have benefited unlawfully from tax advantages which they must now repay to the Spanish state,” European Competition Commissioner Joaquin Almunia said in a statement.

Although only investors have to pay back the money, shipbuilders worry they could be sued by partners and that much-needed jobs in a country with 27 percent unemployment will go elsewhere.

Shipyard workers protested prior to the decision, fearful the Commission would order the government to claw back the money.

Shipyard association Pymar said on Tuesday that the Commission’s proposal was “totally insufficient” and would result in the disappearance of Spanish shipyards.

Almunia declined to give an estimate for how much money would have to be repaid.

“It’s up to the Spanish government to say how much investors have to pay back,” he said at a news conference, adding that Spain would also decide when investors would have to pay.

The commissioner said the future of the industry depended on the ability of shipyards to be innovative and attract investors.

While Spain set up the scheme in 2002, investors will only have to pay back money owed since April 2007, when the French system, similar to Spain’s, was also halted, Almunia said.

A government official said the state was pleased it had managed to soften the terms with the Commission, who had initially wanted investors to return tax advantages dating back to 2005. (Reporting by Foo Yun Chee inBrussels and Clare Kane in Madrid; Editing by Paul Day and Louise Heavens)

(c) 2013 Thomson Reuters, Click For Restrictions

Unlock Exclusive Insights Today!

Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.

Sign Up