EU Approves State Aid to Modernize German Shipyard

The European Commission said it has approved a $5.5m regional investment aid package for the German shipyard Volkswerft Stralsund. The commission said the investment will enable the yard to build larger ships at competitive costs, thereby increasing the productivity of the yard without creating a result in a disproportionate capacity increase. The total investment will be $24.8m, with $5.5m paid as state aid, corresponding to 22.5 pct -- the maximum aid intensity allowed under the Framework on State aid to Shipbuilding. Germany said it would provide aid to Volkswerft Stralsund, situated on the Baltic coast in Mecklenburg-Vorpommern, in August 2005. The region has a standard of living is below the EU average and serious unemployment. Competition Commissioner Neelie Kroes said: 'This is in line with the objective of the State Aid Action Plan of less and better targeted state aid. I am satisfied that the aid is only used to modernise the yard and not to create additional capacity.' Source: AFX