EC Asks Romania To Recover EUR27M State Aid From Automobile Craiova

Competition Commissioner Neelie Kroes said that certain conditions imposed on a privatization normally trigger a lower sale price, so that the state loses revenue and the privatized activity gains advantages.

Kroes added that EC fully supports regional development but this should not affect competition.

The Romanian privatization agency AVAS attached specific conditions to Automobile Craiova privatization, namely a minimum production level of 200,000 cars in the fourth year after the privatization, the continuation of the current activity for four years and the keeping of the 3900 former employees of Automobile Craiova.

Under these circumstances, Ford was the only bidder, offering a EUR57 million purchase price and winning the tender.

The Commission started the investigation in as it was concerned that the privatization of Automobile Craiova through a conditional tender might have resulted in a lower sale price and could therefore involve state aid. The investigation showed that the conditions lowered the sale price, and EC ordered the aids recovery.