EC’s intervention over alleged state aid ‘not helpful’

MEP for Ireland South, Deirdre Clune says a decade long battle between Ireland and the European Commission over alleged state aid to Aughinish Alumina is “not helpful” to business development in the west.

The European Commission wants €10m of what it believes were illegal tax breaks given to Aughinish Alumina between 2002 and 2004 paid back, and is pressing the Irish government to do this.

The case was back in the general court of the European Union this Wednesday for mention.

It dates back to 2005 when the commission ruled that Aughinish Alumina - one of West Limerick’s biggest employers with almost 500 people on its books - has received €10m of illegal tax breaks in the three years previously.

The Irish government argued it had exempted the aluminium powder producer from paying excise duty on the mineral oil it used, and subsequently had the commission’s finding overturned at the European General Court in Luxembourg.

But the commission then appealed this finding to the European Court of Justice, which overturned the general court’s decision and sent the case back to be reheard there.

In 2012, this court annulled the Commission’s decision, arguing the EU council of ministers had previously made similar decisions, and these should also be examined. However, in December 2013, the European Court of Justice again found the General court had erred in its judgement and sent the case back to the General Court to examine a number of remaining arguments.

It means the state aid case is effectively being heard all over again, and Fine Gael TD Ms Clune fears this may have a detrimental effect on business.

“The Government has strongly denied there was any preferential state aid deal with Aughinish and has strongly contested the findings of the Commission. The constant stream of court hearings relating to this case is not helpful for business development in the Limerick area. We are continually trying to attract foreign direct investment into Limerick with the aim of creating jobs and ongoing protracted legal battles like this one are not helping,” Ms Clune said.

The general court has four main issues to consider, including the contention by the Irish government that it erred in law by incorrectly classifying the aid secured by Aughinish Alumina.

The largest alumina refinery in Europe, the company is now owned by Rusal after a merger by its previous owner, the Swiss commodities firm Greencore.