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Salzgitter Loses EU Court Bid to Annul Illegal-Aid Decision

Salzgitter AG, Germany’s second-largest steelmaker, lost a European Union court challenge seeking to overturn an EU decision forcing it to repay unlawful German subsidies.

The EU General Court in Luxembourg today rejected the appeal that a tax break from the 1980s to early 1990s for companies near the former East German border with Czechoslovakia wasn’t aid. The EU regulator ordered Salzgitter to pay back the subsidies in 2000, without disclosing how much.

A 2004 ruling in favor of Salzgitter, based in the same-named German city, was overturned on appeal four years later, after the EU’s highest court ordered a re-examination of the case. It said a lower court used the wrong legal test when deciding the European Commission couldn’t order a refund of the aid more than 10 years after it had been granted.

“The company has taken adequate financial precautions on the balance sheet,” Salzgitter said in an e-mailed statement.

While arguing that no aid was given, Salzgitter said in 2008 that it submitted “a single-digit million-euro amount.” Salzgitter accepted the government’s aid offer from the 1980s to 1995 in “special depreciation allowances” for its plants near the border, the company said in a statement after the 2004 EU court ruling.

The Brussels-based commission, the EU’s executive agency, said in an e-mailed statement that it “did not breach its duty of diligence” and welcomed that “the court also dismissed other pleas of the applicant concerning the reduction and recalculation of the amount of aid to be recovered.”

ThyssenKrupp AG is Germany’s largest steelmaker.

The case is: T‑308/00 RENV, Salzgitter AG v. European Commission.

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