The European Commission announced here on Thursday that it has opened in-depth investigation into Poland's proposed subsidy of millions of euros to U.S. computer maker Dell.
The Commission suspected that a proposed state aid of 52.7 million euros for the Dell Products Poland company to set up a new manufacturing plant in Lodz is not in line with the rules on regional aid for large investment projects.
"We need to investigate all the effects of this aid to verify that it contributes to regional development and to ensure that it will not reinforce Dell's position or create significant capacity in a market on the decline in the EEA," said Competition Commissioner Neelie Kroes.
Dell Products Poland, a company owned by U.S. Dell Inc., intends to set up a new plant for the production of desktops, notebooks and servers.
The new factory is expected to create up to 3,000 jobs in Lodz, Poland's third largest city eligible for regional aid under the EC Treaty as an area with an abnormally low standard of living and high unemployment.
Regions with structural disadvantages, like Lodz, are in general entitled to grant investment aid to compensate for regional handicaps, but large aid amounts present a higher risk of distorting competition.
The proposed amount accounts for more than a quarter of the 189.58-million-euro cost of the factory.
During the investigation, the Commission will verify whether the thresholds of the regional aid guidelines are respected, whether the aid provides an incentive for investment, and whether the benefits of the measure outweigh the resulting distortion of competition.
Source:Xinhua
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