GERMANY GETS ULTIMATUM OVER ILLEGAL AID TO NEUE MAXHTTE STEEL FIRM.

The European Commission ordered Germany on December 17 to recover illegal subsidies granted to the Neue Maxhutte steel firm or face a freeze in EU payments to the coal and steel industries, a Commission spokesman confirmed. The stern warning marks a precedent as it is the first time the Commission has threatened to block EU grants to the two sectors, which are covered by their own state aid rules under the European Coal and Steel Community (ECSC), in order to make itself heard. But it is also a symbolic move as direct EU money to the steel and coal sector has almost dried up in view of the expiry of the ECSC Treaty in 2002. The move comes following a decision not to challenge the German Government's move to inject 9.4 billion Deutschemarks (ECU 4.8 billion) into its coal industry angering British firms that had attempted to block the payments.

In the Neue Maxhtte case though, the Commission is reacting...