The European Commission has launched an investigation into the Austrian government's proposal to Ecu27 million of aid to Siemens? semiconductor unit, Baulemente.
The aid comprises Ecu25.5 million for research and development and Ecy 1.5 million for environmental and training measures on a project to produce power semiconductors using 150-millimetre silicon wafers.
"The work described corresponds to the evolution of products and processes to be used in production, to the upgrading of existing production lines, and to the transfer of technologies to Villach from others Siemens sites," a Commission spokesperson said.
"As such, the 'incentive' effect of the proposed aid - an inducement for the company to carry out research which it would not otherwise have pursued - appears non-existent," he added.
Siemens Baulemente operates a semiconductor manufacturing plant in Villach, which is being developed by Siemens as its centre of competence for power semiconductors.
The planned project is to upgrade an existing 125-millimetre wafer production line, with a reduction in wafer thickness for special applications.
The Austrian authorities have said they intend to grant the aid without waiting for the results of the commission investigation, it said.
US turns down EU offer to end import duties on Lan equipment by Nigel Tutt in Brussels The US has turned down an offer from the EU to end import duties on up to $1 billion on Lan equipment. The offer, which could have taken effect as early as 1 January, was proposed by the EU to resolve a World Trade Organisation dispute, European Commission sources said.
The EU made the offer to end the duties of 5-6 per cent on Lan equipment in response to a WTO dispute panel's interim report, which criticised the way the EU, and particularly the UK and Ireland, had classified Lan equipment in higher customs tariffs, they said.
?There were talks about a mutually satisfactory solution, in conformity with WTO and with no need for the report to appear. My understanding is that they have not reached a settlement and the final report will be issued in January,? a Commission source said.
?One of the things that could have been examined was the early implementation of duty reductions,? he said, referring to the WTO Information Technology Agreement's programme to phase out duties on Lan imports by the start of 2000.
Member states supported the early cut and would have been able to agree an end to the duty covering $500 million to $1 billion of Lan imports. ?It was not as if the US had to do anything. We would have done that. It is very difficult to say what they wanted,? the source said.
?The whole thing is a complete farce. Resolving it on a mutually satisfactory basis would have brought forward the duty cut and the report would not have been adopted?
?If the report is adopted then I suppose we might go to appeal because there would be legal points and then we would spin it out. By the time the report was adopted the duties would be pretty much down to zero,? the source went on.
Diplomats said the US had queried whether sufficient Lan products were covered by the EU offer but also noted that a settlement was complicated by an ongoing court case in Ireland on the issue, which was continuing in parallel.
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