U.S. Steel gets most state aid

Steelmaker U.S. Steel Košice (USSK) swallowed the biggest portion of the aggregate state aid last year, news wire SITA reported.

The steelmaker received aid from 2001 income tax relief at Sk2.088 billion (€50.8 million), which accounted for almost 35 percent of the aggregate provided state aid of Sk6.106 billion (€148.56 million).

The Slovak arm of German carmaker Volkswagen Slovakia, the main driving force of Slovakia's exports, was the second biggest receiver of state aid, amounting to Sk1.469 billion (€35.74 million) from income tax relief. This made up over 24 percent of aggregate aid in 2002.

The European Commission has labelled shipbuilding and automotive industries, as well as steel production, as "sensitive" industrial branches for which state aid rules are stricter than for others.

USSK is eligible for income tax relief up through the end of 2009. However, the aggregate aid must not exceed Sk21.219 billion (€516.25 million).

The Slovak government's condition for the aid is that the steelmaker maintains its labour force at 15,500 people, which lifts the company into the position of the biggest employer in the country.

The U.S. steelmaker has accepted this commitment in the privatisation contract under which it acquired the core business of the ill-fated VSŽ steelmaker in 2000.

Volkswagen enjoys state aid until the end of the fiscal year 2008 if the total assistance does not exceed 30 percent of the investment costs the company spent on production halls in 1998. Volkswagen Slovakia closed 2002 with an active trade balance of Sk33.09 billion (€805.07 million).

Compiled by Beata Balogová from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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