The European Commission is currently investigating the case of the state guarantee for Oltchim

The European Commission is currently evaluating the case of the state guarantee for Oltchim, after the decision to launch the investigation was made on November 19th, 2009, as discussed in a study by the EC on the measures taken by the EU member states as a response to the economic and financial crisis.

The Oltchim case is the only one reviewed by the Executive of the European Commission included in the category "Cases currently under official investigation - cases targeted by the temporary framework (an extended investigation according to the rules of the EU treaty on state aids)", press agency Agerpres said.

On November 19th 2009, the European Commission launched an official investigation, based on the guidelines of the EC treaty on state aids, concerning a state guarantee of 49.6 million Euros in favor of Oltchim, one of the largest chemical manufacturers in Romania.

In motivating the decision, the Commission noted that it had doubts on whether the state guarantee, which would be issued as part of an existing aid scheme, approved by the Commission on June 5th, 2009, complied with the dispositions of the Temporary framework for the state aids destined to help economy during the crisis, in its form which was amended on February 25th, 2009. The EC wanted to check whether Oltchim was already in trouble before the current financial and economic crisis (meaning it would have no longer been eligible for the aid received as part of the temporary framework). The opening of an extended investigation will provide concerned third parties the possibility to present observations concerning the measure into effect.

Following the publication of the public announcement of the intention to provide a guarantee to Oltchim on the grounds of the "Temporary framework", the Commission received a complaint questioning the compatibility of the guarantee with the criteria of the temporary framework. The guarantee in question was supposed to be issued by EximBank to cover 80% (49.6 million Euros) of a commercial loan of 62 million Euros to be used in the acquisition of Arpechim, a supplier of Oltchim.

Romania issued the guarantee as part of state aid scheme passed on the basis of the Temporary framework, which had been approved by the Commission on June 5th, 2009. According to the dispositions of the temporary framework, the government aid scheme in question explicitly excluded companies in trouble before the beginning of the economic crisis, in other words, before July 1st 2008.

Tuesday"s review by the EC also states that three other decisions of the Executive made between 2008 - 2010 concerning Romania, including the decision of November 13 2009, such as the state guarantee provided for Ford Romania, did not cause any objections.