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| EU sets tone as it cracks down on subsidies for struggling steelworks | EU sets tone as it cracks down on subsidies for struggling steelworks |
| (7 months later) | |
| The EU has fired a warning shot against countries using subsidies to help struggling steelworks, in a further blow to UK government attempts to protect the British steel industry. | The EU has fired a warning shot against countries using subsidies to help struggling steelworks, in a further blow to UK government attempts to protect the British steel industry. |
| Belgium has been ordered to claw back €211m (£162m) in illegal state aid given to privately owned Duferco, while the European commission – which enforces EU law – has opened an investigation into €2bn of state support the Italian government is alleged to have given to Ilva, the EU’s third largest steel manufacturer. | Belgium has been ordered to claw back €211m (£162m) in illegal state aid given to privately owned Duferco, while the European commission – which enforces EU law – has opened an investigation into €2bn of state support the Italian government is alleged to have given to Ilva, the EU’s third largest steel manufacturer. |
| Margrethe Vestager, the Danish politician in charge of EU competition policy, said the European steel industry could not rely on public funds to survive. | Margrethe Vestager, the Danish politician in charge of EU competition policy, said the European steel industry could not rely on public funds to survive. |
| Governments across Europe are under growing pressure to rescue steel companies, amid a global glut of supply that is forcing plants out of business or triggering significant job cuts. This week Tata Steel, Britain’s largest steelmaker, announced plans to shed more than 1,000 jobs. | Governments across Europe are under growing pressure to rescue steel companies, amid a global glut of supply that is forcing plants out of business or triggering significant job cuts. This week Tata Steel, Britain’s largest steelmaker, announced plans to shed more than 1,000 jobs. |
| The Indian-owned business said on Monday it was cutting 1,050 jobs, including 750 at the UK’s biggest steel plant in Port Talbot. Sheffield Forgemasters also announced it would be cutting up to 100 jobs, after recently recording a loss, of £9.4m, for the first time in its 210-year history. | The Indian-owned business said on Monday it was cutting 1,050 jobs, including 750 at the UK’s biggest steel plant in Port Talbot. Sheffield Forgemasters also announced it would be cutting up to 100 jobs, after recently recording a loss, of £9.4m, for the first time in its 210-year history. |
| Vestager said the European steel industry was undergoing “restructuring”, with “severe painful consequences as we have seen in the UK”. She stressed the commission would act to prevent illegal state subsidies, as “this kind of aid distorts competition and it risks ... a harmful subsidy race within member states”. | Vestager said the European steel industry was undergoing “restructuring”, with “severe painful consequences as we have seen in the UK”. She stressed the commission would act to prevent illegal state subsidies, as “this kind of aid distorts competition and it risks ... a harmful subsidy race within member states”. |
| Steel companies have blamed their troubles on a glut of cheap steel from China and are calling on Brussels to take action against “unfairly” cheap imports. | Steel companies have blamed their troubles on a glut of cheap steel from China and are calling on Brussels to take action against “unfairly” cheap imports. |
| Vestager said the commission had deployed measures that allow Europe to levy duties on non-EU products that are artificially cheap thanks to government subsidies. The EU has 30 anti-dumping measures in place on steel, with investigations ongoing into six other steel products. | Vestager said the commission had deployed measures that allow Europe to levy duties on non-EU products that are artificially cheap thanks to government subsidies. The EU has 30 anti-dumping measures in place on steel, with investigations ongoing into six other steel products. |
| The backdrop to the moves against state aid is a fractious debate within the EU about whether to grant China market economy status, which would boost the flow of Chinese goods into Europe. EU rules allowing the bloc to treat China as a non-market economy expire at the end of 2016. Steel producers are bitterly opposed to letting down Europe’s defences and claim a move to market economy status will destroy the continent’s 330,000 jobs in the sector. | The backdrop to the moves against state aid is a fractious debate within the EU about whether to grant China market economy status, which would boost the flow of Chinese goods into Europe. EU rules allowing the bloc to treat China as a non-market economy expire at the end of 2016. Steel producers are bitterly opposed to letting down Europe’s defences and claim a move to market economy status will destroy the continent’s 330,000 jobs in the sector. |
| The Danish EU commissioner said she had opened the case against Ilva, following complaints from competitors that the Italian firm was benefitting from illegal government aid to modernise its plant. Ilva has “a long tradition” of not complying with EU rules on industrial pollution, the commissioner said. | The Danish EU commissioner said she had opened the case against Ilva, following complaints from competitors that the Italian firm was benefitting from illegal government aid to modernise its plant. Ilva has “a long tradition” of not complying with EU rules on industrial pollution, the commissioner said. |
| “We need to look into the concerns very carefully as they concern large-scale measures to a significant player, and might bring a serious distortion of competition in a very competitive sector,” she said. | “We need to look into the concerns very carefully as they concern large-scale measures to a significant player, and might bring a serious distortion of competition in a very competitive sector,” she said. |
| In the Belgian case, the commission found the regional government of Wallonia had handed out public money to the Duferco steelworks between 2006 and 2011 to boost production. Despite receiving millions of euros in taxpayer funding, the steel firm closed its works in La Louvière in 2013. | In the Belgian case, the commission found the regional government of Wallonia had handed out public money to the Duferco steelworks between 2006 and 2011 to boost production. Despite receiving millions of euros in taxpayer funding, the steel firm closed its works in La Louvière in 2013. |