The European Commission has opened an in-depth investigation to assess whether Spain’s plan to grant €20.7 million of public support to PSA for investing in its existing car plant in Vigo, Spain is in line with EU rules on regional State aid.

Investments by large companies in existing production facilities are generally not eligible to receive regional investment aid. The Commission is concerned that PSA would have carried out the investment in any event in Vigo, even without public support from Spain. Granting aid in a context where a large company would have invested in any event, would reduce the company’s ordinary operating costs, which leads to competition distortions at the expense of taxpayers.