European Commission opens investigation into Jaguar Land Rover’s €125 million Slovakia car plant grant
Investigators want to find out if the subsidy proposed by Slovakian government adheres to strict guidelines
The European Commission has opened an investigation into Slovakia’s plans to grant Jaguar Land Rover (JLR) €125 million (£108m) for investing in a car plant in the country.
In December 2015, JLR announced it would build a factory in the city of Nistra in western Slovakia. The firm is spending about £1 billion on the facility, which will be capable of producing 150,000 cars when it opens in 2018.
The investigation centres around whether the grant breaks strict rules intended to encourage investment in less economically developed EU states without drawing investment away from other states that may need it.
In a statement, the Commission said it “has doubts at this stage that the planned aid support of €125 million in Nitra measure complies with all criteria of the Regional Aid Guidelines.”
Margrethe Vestager, in charge of competition policy at the European Commission, said: “It is a good thing if public investment fosters economic growth in Member States. However, we need to avoid harmful subsidy races between Member States.
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“The Commission will carefully investigate if Slovakia’s planned support is really necessary for Jaguar Land Rover to locate its investment in Nitra and is kept to the minimum needed, if it distorts competition or harms cohesion in the EU.”
European Commission guidelines on regional state aid are designed to encourage investment in less economically developed EU countries. However, grants and subsidies cannot give the company involved an unfair advantage over competitors or take investment away from another country of similar or less economic development.
We have reached out to Jaguar Land Rover for comment and are awaiting a reply.
