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Government money for helicopter companies
by Staff Writers
Brussels (UPI) Mar 9, 2012

disclaimer: image is for illustration purposes only

Eurocopter in France and AgustaWestland in Italy will receive government funding for development of a new helicopters.

Permission for the research and development funding was given this week by the European Commission, which ruled that the funding was compatible with EU rules on state aid.

The two companies plan to develop new, medium-weight helicopters: the Eurocopter X4 and AgustaWestland's AW 169. The aircraft will feature major technological innovations for enhanced performance, reduced operating costs and limited impact on the environment.

"These two helicopters will bring significant progress in terms of flight security and reduced environmental impact," said EC Vice President in Charge of Competition Policy Joaquin Almunia. "They will also help to increase European know how in leading-edge technologies.

"The public support for these two highly innovative projects is fully justified."

The European Commission said the scale of the Eurocopter and AgustaWestland projects are such that the investments and associated risks exceed the funding capacities of the undertakings (in a context of markets being wary of financing risky projects where there will only be a long-term investment return), so "French and Italian aid, therefore, makes up for a genuine market failure."

Government aid will be "proportionate" -- limited to what is necessary for research and development efforts, the European Commission said.

Eurocopter's X4 will receive French government support through an existing state aid scheme approved in 2010 by the EC. Funding would amount to about $188.7 million -- about 30 percent of total costs eligible for aid. Advances will be repaid when a pre-defined sales target is attained.

Each additional delivery beyond this target will trigger the payment of a royalty fee to the member state.

Italy will provide AgustaWestland with about a $359 million subsidized loan -- with zero interest - over 19 years. The aid portion of the loan is about $124 million.

The commission said that in the case of AgustaWestland it took into account that AW 169 work will be conducted in economically strapped regions of Italy and that the R&D activities would make a positive contribution to their technological development.

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Italy limits 'golden share' rules to avoid hefty EU fines
Milan (AFP) March 9, 2012 - Italy eased its grip Friday on state-controlled holdings in the energy, defence and telecoms sectors, as EU commissioner turned Prime Minister Mario Monti pushes for greater respect for EU rules.

"The measures adopted concern new rules on special powers in the defense and national security sectors," a government statement said after the cabinet adopted a decree following threats of EU legal action.

Italy's so-called "golden share" holdings breached European Union rules on free movement of capital, and in November the European Commission threatened to take Italy to the European Court of Justice.

"Golden shares" give the government the right to veto decisions by other shareholders and is often used as a protectionist measure to prevent assets from being sold off.

"Italy has conformed with European Union regulation, giving the government powers to intervene to take care of the country's legitimate, essential and strategic interests," the government said.

Italy had been accused of not complying with a previous EU ruling outlawing "golden shares" with regards to energy giants Enel and Eni, defence company Finmeccanica and Telecom Italia in particular.

Monti, who came to power in November after his predecessor Silvio Berlusconi fell from grace, is a former competition commissioner.

He had been given extra time by the Commission to relinquish Rome's grip on the sectors in question and the new rules take effect immediately.

With the new decree, the government said it hoped to "close the violation procedure opened by the European Commission in 2009."

Whilst the government has given up some control in the energy and telecoms sectors, it retains a firm grip on the defence sector.


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New Delhi (UPI) Mar 8, 2012
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