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Germany gets final EU nod to extend coal subsidies to 2018

Business Materials 10 December 2010 19:56 (UTC +04:00)
An agreement to let subsidies for loss-making coal mines in the European Union run until the end of 2018, meeting a key request from Germany, was finally approved on Friday
Germany gets final EU nod to extend coal subsidies to 2018

An agreement to let subsidies for loss-making coal mines in the European Union run until the end of 2018, meeting a key request from Germany, was finally approved on Friday, DPA reported.

The European Commission had proposed in July that uncompetitive mines should be closed by October 15, 2014, arguing that subsidies were bad for the environment and fair competition.

But Germany - whose coal industry is heavily dependent on state payouts - complained that keeping to this timeline would hurt competitiveness and cost too many jobs.

EU competitiveness ministers, meeting in Brussels, approved a revised proposal taking into account those demands, a statement indicated.

However, on the commission's insistence, ministers stipulated that aid granted "must follow a downward trend, in order to prevent undesirable effects of distortion of competition in the internal market."

They also decided to allow governments to ease the pain of closing mines by allowing them to spend on welfare benefits for retired miners until December 2027.

Beyond Germany, only Romania and Spain are directly affected by the phasing out of subsidies, meaning that other EU countries had no particular economic reason to oppose the compromise.

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