BULGARIAN STEEL INDUSTRY (16563/06)
Letter from Rt Hon Ian McCartney MP, Minister
for Trade, Investment and Foreign Affairs, Department for Trade
and Industry/Foreign and Commonwealth Office
I regret to inform the Committee of a scrutiny
override on 19 December 2006 on EM16563/06, submitted to your
Committee on 9 January. I apologise for the delay in submitting
this letter, due to the Christmas and New Year interval.
The Decision is intended to allow implementation
of a revised restructuring plan for the Bulgarian steel industry
so that it achieves viability under normal market conditions,
in line with the provisions of the Europe Agreement with the Bulgarian
Government, by the end of 2008. This supports the Government's
policy objectives in relation to the steel sector in Central Europe.
The revised restructuring plan, and request
by the Bulgarian Government for an extension of the time allowed
to implement it, follows a Commission assessment that Kremikovti
AD, the only company to have benefited from state aid, would not
reach viability by the end of 2006, as required under the previous
plan.
EM 16563/06 sets out the background and scrutiny
history and notes that your Committee was supportive of the previous
2004 Council decision and did not comment on the proposal at that
time.
The background to agreeing to adoption of the
Decision in advance of scrutiny clearance was that the document
was only presented by the Commission on 11 December 2006, just
before the last meeting of the Select Committee on the European
Union, at the same time as it was made clear to us that the proposal
was coming to full agreement before Christmas. In view of the
recess and the urgency of getting the Decision adopted as an amendment
to the Europe Agreement before Bulgaria's EU accession on 1 January,
when the EC Treaty provisions on State aid apply, not those in
the association agreement, the Government felt that it should
not withhold agreement. I hope that the Committee will agree it
was important that we supported this proposal.
11 January 2007
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