German coal industry granted multi-billion cash aid

Authorisation for funding worth €2.7 billion has been granted to support Germany's coal industry, the European Commission announced has this week.

The Commission decided not to raise any objections to the multi-billion aid package that Germany has proposed to grant to its coal industry for the year 2005, because the aid is in accordance with the overall restructuring plan that the EC approved for the country for the 2003/05 period.

The total amount of the proposed aid for this year is €2,731.4 million, which will be divided into:

  • Aid for the reduction of activity (€597.7 million)
  • Production aid (€1,494.6 million)
  • Aid to cover exception costs (€617.5 million)
  • Traditional pecuniary benefit to miners (€21.6 million)

    The plan approved by the Commission contained detailed data for the period from 2003 to 2005, and provided a gradual reduction of financial aid to the German coal mining industry, which will then lead to a permanent decrease in production.

    The funding will be provided on a decreasing basis, but also respects the restructuring plan's rules on maximum amounts of aid allowed.

    "Proposed aid measures respect the provisions of the Council Regulation on State aid to the coal industry," the Commission stated, "and are therefore compatible with the proper functioning of the internal market for coal."

    By Jane Kettle

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