Volkswagen gov't subsidy probe dropped by EU
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BRUSSELS (Bloomberg) -- The European Union has dropped its probe into German aid received by Volkswagen after the government reduced the planned subsidy for the automaker, the European Commission said.
Germany will cut the aid for VW below the threshold requiring EU authorization, according to an official publication from the EU today. It didn't quantify the subsidy the government now plans to grant the company.
In 2011, the EU started investigating Germany's planned 83.7 million euro ($109.5 million) payment to Volkswagen to help the company cover the cost of changing vehicle production at a plant in the eastern German state of Saxony.
EU regulators review large government payments to companies to ensure rivals aren't harmed by unfair state help. The EU was critical of the aid to Volkswagen at the time, saying it may boost capacity for a market with falling demand. A similar probe into Volkswagen's Audi unit was dropped after the Hungarian government withdrew a request for the EU to approve 49.5 million euros in subsidies to upgrade an engine and car assembly plant, regulators said.
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