The outcome of talks with the European Commission (EC) on overproduction in US Steel Košice (USSK) will affect neither employment in the company nor the volume of investments to which US Steel obliged itself when originally entering the eastern-Slovak steelmaker VSZ four years ago.
USSK president Christopher Navetta told the TASR news wire that the company intended to completely fulfil its obligations, despite changes on the government's side of the contract.
This year's investment plan counts on $170 million and there will only be a natural decline (attrition) in employment.
Tax sanctions, amounting to $70m, will not affect the company's economy, but the real impact still must be calculated due to the flat tax and other changes in the business environment.
USSK was preparing to reduce its steel production as of May 1, as has been known for some time.
Most of the negative impacts resulting from the talks with the EC will be eliminated due to more effective sales and the transition to products with higher added value.
"We are glad the chapter of negotiations with the EC is over and closed," Navetta said.
Tax sanctions for USSK were a result of several-months long talks between the Slovak government and the EC over the US-based steelmaker, which became the majority owner of the former Košice steelmaker VSZ in November 2000, TASR wrote.
The problem with overproduction was based on different interpretations of Slovakia's Accession Treaty with the EU.
While the company thought the production limits would apply on the day of Slovakia's entry into the union, the EC insisted that the starting date was the day the Accession Treaty was signed in late 2002.
As a result of negotiations with the EC, USSK will lose several $70m tax holidays totalling some $500m and will pay $32m to the Slovak cabinet in two payments this year and next year.
Compiled by Beata Balogová from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.
5. May 2004 at 9:52