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11/23/05

baltimoresun.com: EU Probes Suspicions of Illegal Subsidies in Poland

baltimoresun.com

EU Probes Suspicions of Illegal Subsidies in Poland

EU regulators have launched an investigation into suspicions of illegal subsidies in Poland's energy and industrial machinery markets. The probe concerns so-called long-term power purchase agreements between the state-owned network operator and power generation companies. The European Commission said Wednesday in a statement it has "doubts as to the compatibility" of the agreements with EU rules prohibiting state subsidies that unfairly distort competition.

The agreements cover half of the Polish power generation market, "leaving little room for new market entrants," the EU head office said.

European regulators will also probe some 27 million euros ($32 million) in restructuring aid for a Polish industrial machinery company, Huta Stalowa Wola S.A. Later Wednesday, Poland's new premier will arrive in Brussels on his first visit to the European Commission since taking office. Kazimierz Marcinkiewicz is expected to take a tough line in defending his country's interests within the EU.

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