Global Trade Alert

On 13 July 2011, the European Commission has approved a regional aid of EUR 17 million for the car manufacturer BMW in order to produce two new car models - the 'i3 Mega City Vehicle' and the 'i8 sport' in the city of Leipzig, Germany.
 
The beneficiary is the BMW AG, which belongs to the BMW Group. 
 
The aid will be paid out in the form of an investment allowance each year after the costs occurred, meaning that the last payment will be issued in 2015.
 
The Commission allowed only for aid of EUR 17 million coming from the initially planned aid of EUR 45 million, as it was argued to be more than necessary to locate the investment in Leipzig.
 
Nevertheless, the aid package "will relieve the company from costs it would normally have to bear itself under normal market conditions when setting up the production facility and, therefore, the undertaking benefits from an economic advantage over its competitors" (para.29, letter from the EC to Germany, Brussels 13.7.2011). Also, the regional aid is expected to 'affect trade between Member States' (para. 30).
 
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metrics, the state aid proposed here is discriminatory.