European Union gives nod to State backing for Abbott

THE European Union has cleared the way for the IDA to grant €13 million in aid to Abbott Labs.

The US pharmaceutical company plans to set up a €39m research and development centre in Galway that will create up to 80 jobs.

Approval by the EU on any large investment project is required under European competition laws. Last year, the EU blocked the Government from backing a major expansion by Intel.

EU Competition Commissioner Neelie Kroes said: "I am pleased to endorse aid which promotes innovation and helps to create jobs, especially if it also supports the commission's regional development policy."

The Abbott Labs centre will carry out development work on products that treat coronary vascular disease and periphery vascular functions. The public support from the Industrial Development Agency Ireland is intended to reduce the risk linked to this type of work and to assist the development of Abbott Vascular Devices in the Border Midlands and West region.

This is the first R&D programme that Abbott has undertaken in Ireland. It will create 50 high level positions by 2007, with the potential to grow to 80 by 2009.

Last month, Abbott said it planned to create 155 jobs in Donegal town. The jobs will be based on the site of the Hospira plant, which is scheduled to close with the loss of over 500 jobs. Abbott will manufacture medical devices relating to diabetes in a €36m redevelopment of the site.

Abbott is one of the country's biggest employers.