French pig industry rescue aid under the microscope.

The European Commission has opened a state aid investigation into aid worth ECU 108 million that the French authorities are planning to grant to the pig industry. The Commission believes that two parts of this latest aid scheme proposed by the French Government, that is postponement of social security contributions and underwriting of loans to recent investors, may affect trade between EU Member States and threaten to distort competition by favouring French producers and therefore do not appear, at this stage, to comply with EU rules on anti-competitive state aid (based on Article 92 of the EC Treaty). However, the other part of the scheme, which proposes to revive the refundable-advance system under the Stabiporc fund to help stabilise pig prices and farmers' incomes, could be acceptable, although aid channelled through this system had been condemned by the Commission in an earlier case in 1994. Indeed, according to the EU executive, where these advances (i.e. loans) are granted at market interest rates and comply with the reference rates set by the Commission, the scheme does not seem to constitute state aid within the meaning of Article 92 of the Treaty.

Manure storage aid for Flemish farmers.

The Commission decided on December 9 to open a formal investigation into state aid amounting to roughly ECU 10 million granted to farmers by the Flemish authorities in accordance with a Decree governing the use of the manure for the 1996 and 1997 growing seasons whilst the aid arrangements for 1998 are still under examination. The...

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