EC ORDERS SPANISH SHIP SUBSIDY REPAYMENT

   The European Commission has ordered Sociedad Estatal de Participaciones, the owner of shipyards in Spain, to repay irregular state aids of 111 million euro ($130 million) plus interest to Spanish authorities.
    The EC said that the state aid, paid in 1998 to the publicly-owned merchant shipyards in Spain, was not compatible with the conditions of a 1997 Commission decision approving a package of restructuring aids to the yards.
    The original aid package approved in 1997 had included special tax credits to compensate the yards for the absence of any possibility of being able to benefit from tax credits under Spain’s general tax consolidation system. However, Sociedad Estatal de Participaciones was subsequently able to obtain tax credits under the general tax consolidation system "by offsetting losses in one part of the group against profits elsewhere," the EC said.