Austrian aid for BMW’s engine plant in question

The European Commission has decided to initiate a detailed investigation concerning 40.25 million Euros in aid earmarked for BMW’s plant in Steyr in the Austrian region of Oberosterreich.

The Commission has asked Austria to forward any comments within one month.

Several aspects of the aid package are in question.

In terms of the part of the aid that was aimed at regional investment, the Commission says that it is not convinced that the cost difference between carrying out the project in Steyr and not in the alternative location in Landshut, Germany justifies the level of regional aid.

Referring to the part of the package that was aimed at training, the Commission says that it cannot exclude that Austria might have applied an ‘excessively wide definition’ of general training in order to grant a lot more aid that it should.

The Commission also doubts that the money targeted at supporting the development of new diesel engine technology, as well as the part of the aid aimed at supporting innovation and environmental issues, are ‘compatible with the current state aid framework for the motor vehicle industry’.