Hampshire MEP Welcomes Tougher EU Rules After Unfair Pirelli Subsidies

9.00.00am UTC (GMT +0000) Sun 13th Jul 2003

Chris Huhne MEP at the Pirelli Site in Bishopstoke

Hampshire Liberal Democrat MEP Chris Huhne welcomed moves this week by the EU Commission to toughen up the rules on unfair government subsidies and to set up a new unit to force repayment of dodgy state aid.

The decisions follow cases such as the £50 million subsidy paid by the Italian government to Pirelli to shift fibre optic cable production from Bishopstoke to Naples. 'The Commission says it is going to toughen up, and that is overdue. It is not much consolation for those who have lost their jobs in Bishopstoke, but at least it may mean that greedy multinationals cannot get away with it again' said Mr Huhne.

Commissioner Mario Monti, who is in charge of the rules guaranteeing fair competition including subsidies, told MEPs last week that one of his top priorities for the remaining year of his term of office was to review the state aid rules for depressed regions.

In addition, he promised the economic and monetary affairs committee on which Mr Huhne sits that there would be a new tough monitoring unit to get back government aid that had been unfairly paid out.

'This is to toughen up the rules on unfair government subsidies following 300 job losses at Bishopstoke last year' said Mr Huhne. 'Overall, the Commission has been making some progress in reining back these subsidies which have fallen from 102 billion Euro in 1997 to 86 billion Euro in 2001'.

Mr Huhne said he had been disgusted that the Commission had been unable to stop the £50 million paid to Pirelli by the Italian government thanks to a technicality in the rules. 'This must never happen again' he said.

'These rules are meant to protect workers against sackings due to job poaching in other member states, but they have completely failed in this case' said Mr Huhne. 'I have pressed the Commissioner to toughen up the rules so that in future the Commission can take account of any likely downturn in a market. When it approved the Italian aid to Pirelli, it was only able to look at the last five years of sales figures, which showed a boom' .

'I hope that in the review of regional aid which Mr Monti announced, the Commission will now ensure that this loophole is closed' said Mr Huhne.

Mr Huhne also confirmed that the Commission could still reopen the Pirelli case if there was proof that second-hand equipment had been shipped from Bishopstoke to Battipaglia instead of Pirelli buying new.

'I appeal for any employee or ex-employee to come forward with evidence, which will be treated in confidence' said Mr Huhne.

Notes to editors: Chris Huhne MEP is economic spokesman of the European Liberal Democrats. Commissioner Monti reports to the Economic and Monetary Affairs committee of the European Parliament, on which Mr Huhne sits.