The European Commission has initiated an investigation into German aid to the glass company Technische Glaswerke Ilmenau (TGI) in Thuringia, Germany.
The European executive doubts in particular that…
The European Commission has initiated an investigation into German aid to the glass company Technische Glaswerke Ilmenau (TGI) in Thuringia, Germany. The European executive doubts in particular that the company was in difficulties at the time of the aid. The German authorities have one month to supply the Commission with information requested regarding this un-notified aid granted in the form of loans and a release from the obligation to pay back a debt. TGI manufactures technical glassware for domestic and scientific use. It was created in 1994 for the purchase of twelve production lines of the former East German firm of Ilmenauer Glaswerke, liquidated by the Treuhandanstalt. At the time, TGI received DM 68 million in aid for restructuring and compensation for losses, as well as three loans for a total of DM 17 million from Kreditanstalt fur Wiederaufbau (KfW). Following a delay in beginning the planned investments, the successor of the Treuhandstalt, the Bundesanstalt fur vereiningungsbedingte Sonderaufgaben (BvS) granted a release from the obligation to pay DM 4 million to TGI on the sale price agreed for the production line. At the same time, the Land of Thuringia granted a DM 2 million loan to TGI. According to the Commission“s press release, it has doubts on the nature of the company, as it notes that the main shareholder and managing director of TGI “is the same natural person, who is also the sole shareholder and managing director of two other undertakings operating in related markets. Therefore, the Commission has doubts as to the identity and size of the undertaking receiving aid”; the fact that TGI was a company in difficulty at the time of granting the aid, or whether all the conditions for the authorization of restructuring aid of a company in difficulty had been met; and whether the loans from the Land of Thuringia and the KfW met the requirements of the aid schemes under which they were granted.