EC opened in-depth investigation into Belgian Walloon region funding granted to steel group Duferco

Brussels, Belgium, 18-10-2013 — /EuropaWire/ — The European Commission has launched an in-depth enquiry to determine whether the funding granted to steel group Duferco by the Walloon region of Belgium complies with the European Union’s state aid rules. The launch of the enquiry will allow interested third parties to submit their comments on the measure and is without prejudice to the final outcome of the investigation.

In 2003, Société wallonne de gestion et de participations (SOGEPA), a company fully owned by the Walloon region, set up Foreign Strategic Investments Holding (FSIH) with a view to investing in the companies belonging to the Duferco group.

Since its establishment, FSIH has deployed a series of measures in support of the Duferco group, at a cost of EUR 517 million. The measures consist in equity participation, capital injections and loans.

At this stage, the Commission plans to verify whether these investments, which were not notified to it in advance, were made in conformity with prevailing market conditions. The investigation will enable the Commission to obtain the information required to assess the support given.

Background

The Swiss-based Duferco group manufactures and sells steel in some fifty countries around the world. In Belgium, the group was based mainly in the Walloon region. Since the closure of its plant at La Louvière in Spring 2013, the Duferco group has only one plant still operating in Belgium.

Under EU rules, public investment in companies carrying on economic activities can be considered free of state aid provided the investment is made on terms which would be acceptable to a private investor operating under normal market conditions (the market-economy investor principle – MEIP). Public investment that fails to comply with the MEIP constitutes state aid under EU law (Article 107 of the Treaty on the Functioning of the European Union – TFEU) as it gives the beneficiary an economic advantage over its competitors. The Commission then assesses whether the aid granted is compatible with the common EU rules authorising certain categories of aid.

The non-confidential version of the current decision will be made available under case number SA.33926 in the State Aid Register on the DG Competition website, once any confidentiality issues have been resolved. New publications of state aid decisions on the Internet and in the Official Journal are listed in the ‘State Aid Weekly e-News’.