STATEMENT BY MINISTER FOR ENTERPRISE, TRADE & EMPLOYMENT MR. MICHEÁL MARTIN ON THE WITHDRAWAL OF EU AID NOTIFICATION
MARCH 2 ND 2005
The Minister for Enterprise, Trade and Employment, Mr. Micheál has announced that the Government has withdrawn from the European Commission the notification proposing an award of State aid to Intel Ireland in respect of Intel’s FAB 24-2 investment in its Irish operation at Leixlip, Co. Kildare. This decision has been taken, in agreement with Intel and the IDA, in view of the pending Commission decision to open a formal inquiry into the notification, which could take up to 18 months to complete, and the clear indications from the Commission that the aid would not be approved at the end of that process.
It will not now be possible to grant the notified aid to Intel. However, the work on the project has already commenced at the Leixlip site, and it’s our understanding at this time, will continue to plan.
The Minister said that he was disappointed with the outcome to the aid notification: “This is an excellent project which will create new jobs and will generate significant benefits for the local economy. As such, I would have thought it is precisely the type of project that EU Regional Aid provisions, which, of course, we are fully entitled to avail of, were intended to encourage. It seems inconceivable that an investment of this size by such a company would not involve substantial innovation, both process and product innovation, and a significant amount of this innovative activity will occur in Leixlip. Indeed, in all of my discussions on this case, I have emphasised the vital importance of attracting this type of investment in leading-edge technologies to the EU if we are to make progress in relation to the Lisbon Agenda, which President Barroso has so strongly supported since becoming President of the Commission.”
“It should be pointed out that Ireland was the only location in the EU considered by Intel for this investment. Had Ireland not succeeded in winning the project, it would have been lost to the EU. At present Intel employ over 5000 people at its Irish operation. Since 1989 Intel and the Irish Government have invested ¤5billion in the Leixlip operation. Intel is one of the most innovative companies in the world with a track record, stretching over several decades, of creating new products and markets and the Government and IDA will continue to work closely with them”, Minister Martin concluded.
Notes to Editors
On 19th May 2004, An Tánaiste announced that the Intel Corporation had decided to invest a further ¤1.6 billion in its Irish operation in Leixlip, Co. Kildare. This investment was designed to equip the Leixlip facility with the technology to produce the next generation of microprocessors (65nm) and other products. When making this announcement, An Tánaiste specifically referred to the fact that the investment was supported by IDA Ireland, whose grant to Intel was subject to EU approval. Such approval is required under the European Commission’s Multisectoral Framework on Regional Aid for Large Investment Projects, which came into effect on 1 January 2004.
The proposed grant aid was notified to the European Commission on 14th June 2004 and detailed discussions have been ongoing with the European Commission since then. It became apparent in the course of these discussions that the Commission were adopting a different interpretation of the provisions in the Multisectoral Framework on which the IDA and the Department of Enterprise, Trade and Employment were relying in proposing to grant the aid (this was the first case in which these provisions were being applied).
Substantial further information was supplied to the Commission and a number of meetings were held and further submissions were made in an attempt to resolve these differences. The Minister met with both Commissioner Monti, when he was Commissioner for Competition, and Commissioner Kroes, when she succeeded him in that post, to highlight the importance of this proposal and the fact that the Irish Government were firmly of the view that the proposed aid came within the terms of the Multisectoral Framework. In addition, the Taoiseach wrote to President Barroso on two occasions and spoke to him about the matter in support of the stance taken by Minister Martin.
Notwithstanding these efforts, the Commissioner for Competition has now indicated that she is not prepared to approve the aid package at this stage. Rather, she intends to propose to the College of Commissioners the opening of a formal investigation into the proposal. While the Commission indicated that they would attempt to complete the investigation within 6 months, the relevant regulation allows them up to 18 months to complete such an investigation. Given that we have also received strong indications that the aid would not be approved at the end of that process it has been decided, in agreement with Intel and the IDA, to withdraw the request for approval of the proposed aid.
ENDS/ETE 1324
Last modified: 02/03/2005
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