April 27th, 2007
Hooked on subsidies, and itching for more
Germany has urged the European Commission to relax its strict rules on state aid in cases where EU governments compete with non-EU countries for investment. Berlin wants to introduce a "matching" clause that would essentially nullify the Union’s ban on subsidies and allow governments to offer the same aid package as countries outside the union.
Germany’s proposal would mean that if, for example, a US federal state tried to attract investment from a South Korean chipmaker with the help of massive financial incentives, Germany or France could offer the same level of subsidies.
The plan will be discussed at an informal meeting of EU industry ministers starting today, and no doubt it will be wildly popular in other European capitals.











