Summary: The European Commission ruled on six outstanding state aid cases in Germany on December 9. Approval was given to investment aid, environmental aid and two further cases of regional assistance to help investment in the motor industry. A new law proposed by the German Government on aid "bonuses" was also given the green light by the Commission, while only one case tainted the group-ruling, a new investigation opened by the Commission into aid granted by the Land of Bavaria to the troubled Neue Maxhutte steel firm.

Investment aid for lignite plant in Cottbus. The Commission has decided to close its state aid inquiry and not to raise objections against an investment grant to the tune of DM 49.5 million (ECU 25.2 million) provided by the Land of Brandenburg for the construction of a new lignite power plant in Cottbus. The project aims to provide district heating to the city. The proposed aid has positive effects on regional development and only a negligible impact on competition. Cottbus is located in the biggest Eastern German lignite-producing territory. With the construction of the new power plant, the town decided to replace its old lignite power plant built in GDR times which did not meet the latest technical and environmental standards. The overall project cost was high, at ECU 201.5 million, but this is the first time lignite is being used as a fuel for pressurised fluidised bed combustion, the Commission is supporting the project itself under the Thermie energy technology programme with an extra DM 29 million (ECU 14.8 million), with a view to boosting the chances of exporting the new technology. In order to balance the price difference towards a modern combined heat and power plant fuelled by gas which would have cost far less, the Brandenburg authorities also decided to support the project with an amount of ECU 25.2 million. Environmental aid for recycling firm. The Commission has approved a subsidised loan of DM 65 million (ECU 33.2 million) and a guarantee covering 80% of loans totalling a maximum of DM 67.976 million (ECU 34.7 million) to MCR Gesellschaft fur metallurgisches Recycling. The aid relates to a recycling plant which compacts and smelts car bodies for onward processing in a steel furnace. The project is eligible for environmental aid. The Commission opened a formal state aid inquiry on December 18, 1996 because it doubted that the initial proposal was in line with its Steel Aid Code and environmental aid...

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