The European Union ordered Belgium to recoup $230 million from the Duferco steel group because of illegal state aid that distorted competition.
The Commission has concluded that €211 million funding granted by the Walloon authorities in Belgium to several steel companies within the Duferco group between 2006 and 2011 distorted competition in breach of EU state aid rules.
Today’s ruling was the second case in short succession in which the EU competition office went after Belgium after it ordered the government to recover some $760 million in illegal tax breaks from 35 multinationals last week.
EU Commissioner Margrethe Vestager said that even when steel companies across the EU are struggling with a crisis in the industry there was no point in providing state aid just to keep a company within a nation.
Duferco received the aid between 2006 and 2011 but nevertheless withdrew most of its business from Belgium later.
The Commission concluded that no private investor would have accepted to invest at the same terms as the Belgian Foreign Strategic Investments Holding (FSIH), a public authority controlled by the Walloon Government in Belgium. The public funding therefore provides a selective advantage to its recipients that their competitors who have to operate without such subsidised funding did not have.
Margrethe Vestager, Commissioner in charge of competition policy, said: “Steelmakers across the EU are struggling with worldwide overcapacity and strong imports – the response to this challenge must be to improve the sector’s long-term global competitiveness. Despite the illegal state aid to Duferco the company has now withdrawn almost all business activities from Belgium. The case shows that state aid to artificially keep steel manufacturers afloat that are not viable seriously distorts competition and only delays their exit from the market at the cost of taxpayers.”
The EU also opened a probe into Italian support for the Ilva steel producer.