Commission may re-examine stance on Intel grant aid

THE vice-president of the European Commission yesterday gave an undertaking to follow up with the Competition Commission on its stand that forced the Government to withdraw an estimated €100m grant to Intel.

Swedish commissioner Margot Wallström told the Dáil Committee on European Affairs that Ireland deserved a more elaborate reply as to why the competition commissioner believed the Intel grant was not allowable under state aid rules.

She said she would seek a "new answer" from the competition commissioner, as it may fall within the debate taking place about the rules and how they should be revised.

According to committee chairman, Fine Gael TD John Deasy, Ms Wallström's undertaking opened the possibility the commission's position on grant aid to Intel may be revisited.

He said this was especially so in light of the targets set out by the Lisbon Agenda, which aims to make the EU the world's strongest economy by 2010.

Waterford deputy and PD Senator John Dardis had earlier pressed Ms Wallström about the rationale of the decision over Intel.

The commissioner said no aid can be provided that reinforces the dominant position of a company, unless the product creates a new market share. She said Intel was dominant in the microchip market.

However, Mr Deasy said the argument did not hold because Intel had no intention of locating in any other state besides Ireland. He argued the loser was going to be the entire EU.

Mr Dardis said there seemed to be a lack of transparency in the manner in which the commission had arrived at its position.

Ms Wallström said the Irish Government deserved a more elaborate reply.

"You deserve a good reply (incorporating) the arguments made by the commission," she said.

Earlier, Ms Wallström had addressed the European Forum in Dublin Castle on the EU constitution.

The commission vice-president is charged with communicating the benefits of the constitution through Europe.

She is also heading the campaign to improve the image of the EU, by helping to make its institutions seem less remote to European citizens.