Commissioner Monti Reopens Case Of Pirelli Jobs Subsidy That Cost UK Jobs

9.00.00am UTC (GMT +0000) Wed 19th Feb 2003

Chris Huhne MEP at the Pirelli Site in Bishopstoke

The European Union Competition Commissioner Mario Monti said today (Tuesday) that he will reopen the case of €74.5 million (£50 million) state aid paid by the Italian government to the Pirelli company.

The aid was approved by the Commission in October, and is to expand production facilities in southern Italy for glass fibre even though Pirelli has closed its Hampshire plant making similar products.

Mr Monti was answering a question from Chris Huhne MEP in the economic and monetary affairs committee of the European Parliament. He said that he would look at the case again following a complaint from Mr Huhne, the Liberal Democrat MEP for South East England.

Mr Huhne says that the subsidy was responsible for shifting more than 300 jobs from Hampshire to southern Italy. The Commission had approved the aid without any knowledge that it would cause a transfer of production, but Mr Huhne has provided the Commission with a copy of a Pirelli press release for local Hampshire press that admits the shift.

'The reopening of this case is very welcome' said Mr Huhne. 'I will now be in touch with the Commission services to provide them with all information necessary to speed up their decision.

'The very fact that the Commission is reopening this case may cause Pirelli to rethink their expansion plans in southern Italy that were the cause of the closures in Hampshire.

'In addition, David Chidgey, the Liberal Democrat MP for Eastleigh, and I are asking for meetings with the trade union representatives so that we can organise further formal letters of support and complaint to the EU Commission. We are going to keep up the pressure on this. There is no way that big multinational companies like Pirelli can be allowed to walk roughshod over the lives of decent and long-serving employees' said Mr Huhne.

The Commission approved the planned Italian subsidy of €74.5 million (£49.4 million) subsidy to Pirelli in Italy. Since this total investment cost was €167.4 million (£111 million), this amounts to 44 per cent of the total, says Mr Huhne.

Pirelli's subsidiary Fibre Ottiche Sud claimed to the Commission that the project would create 311 direct jobs and 108 indirect jobs in southern Italy, and Pirelli have announced 312 job cuts in Eastleigh (including Bishopstoke) since March.

Notes to editors: Chris Huhne MEP is deputy leader of the UK Lib Dems in the European Parliament and economics spokesman for the European Liberal Democrat group. He sits on the economic and monetary affairs committee, which monitors the activities of Commissioner Monti. The full question and answer from Mr Monti together with the Commission's letter approving the state aid in October are available from Jo White (see above).

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