EU's Verheugen urges scrapping of firm subsidies

BERLIN, Jan 19 (Reuters) - Nokia's (NOK1V.HE) actions in Germany show that state subsidies should no longer be paid to attract companies, European Union Industry Commissioner Guenter Verheugen was quoted as saying on Saturday.

"Nokia gives us cause to reconsider state policy on subsidies altogether," Verheugen told paper Welt am Sonntag, according to a preview of an interview due out on Sunday.

"I think there's no sense in the state paying subsidies in order to attract companies."

Finnish firm Nokia, the world's top cellphone maker, said this week it would close a plant in the western city of Bochum because it was not competitive, and move production to Romania.

The news drew a barrage of criticism from politicians, who accused Nokia of abusing millions of euros in public subsidies it received to help build up its operations in Germany.

Politicians in Bochum's home state North Rhine-Westphalia (NRW) have threatened to demand the return of subsidies, although talks are still under way to try and rescue something at the plant where up to 2,300 layoffs have been announced.

A number of part-time workers at the site have already been dismissed or will be in the next few days, the Westfaelische Rundschau newspaper reported on Saturday.

European Commission President Jose Manuel Barroso hinted the European Union might be prepared to help those affected.

"I understand the dismay of the people in Bochum," he told German magazine WirtschaftsWoche in comments published on Saturday.

"For the very reason we know how hard the process of change can be, we have social and globalisation funds in cases where member states can't shoulder the burden of such changes."

Verheugen, a German, said Nokia's "hectic" announcement of the closure pointed to "serious management failures".

"Nokia's behaviour is the product of a new religion which idolises shareholder value," he said. "That's the wrong path."

Senior union officials in Germany have called for a boycott of Nokia products and some top politicians have said they would change their phones. Germany is Nokia's fifth largest market.

NRW's economy minister Christa Thoben told Reuters on Saturday talks with Nokia about the closure would continue. The federal Economy Ministry hosted initial talks on Friday.

Nokia has defended its plans and says it will go ahead with the move.

(Reporting by Dave Graham and Matthias Inverardi; editing by Michael Roddy)