EU Competition Chief Comes Out Swinging

The new European Competition Commissioner, Neelie Kroes, is distressing some European Union members by taking a tough line on state aid to industry. Officials from Britain, France, Germany, and Austria wrote to Kroes in early February, expressing alarm after she questioned the practice of relatively wealthy EU member states using subsidies to promote development in their depressed areas. Such aid has been key in luring projects such as a Toyota Motor Corp. (TM )assembly plant in northern France. A spokesman says Kroes is still consulting with governments. The French also are upset by Kroes's threatened legal challenge to a state-subsidized rescue of engineering giant ALSTOM (ALSGY ). The EU approved the bailout last year, but Kroes said on Feb. 1 that France failed to honor vows such as opening the national rail system to more competition.

Edited by Rose Brady

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