February 27, 2008 / 1:48 PM / 12 years ago

EU says Romania must recover 27 mln euros from Ford

BRUSSELS, Feb 27 (Reuters) - Romania gave illegal state aid to a car plant during its sale last year to Ford Motor (F.N), the European Commission said on Wednesday, telling the country to recover 27 million euros ($40.6 million) from the U.S. firm.

The European Union executive said Romania had attached conditions to the privatisation of Craiova, formerly called Daewoo Romania, whose parent company went bankrupt, including a minimum production level and employment guarantees.

Those conditions resulted in a lower sales price than if the privatisation had been unconditional, which amounted to illegal aid, the Commission said after a five-month in-depth investigation.

“Regional development, which the Commission supports, must not allow distortions of competition,” EU Competition Commissioner Neelie Kroes said in a statement.

Daewoo Automobile Romania was created in 1994, but its parent company Daewoo went bankrupt in 2000.

Ford, the sole bidder for the EU newcomer’s struggling carmaker, agreed last September to pay 57 million euros for a 72.4 percent stake in the company.

Ford said in October it had bought the Romanian plant under the impression that the privatisation was in line with all EU laws. Romania joined the bloc on Jan. 1, 2007. (Reporting by Marcin Grajewski, editing by Will Waterman)

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