February 24 (SeeNews) - The European Commission said on Monday that Romania needs to recover some 13 million euro ($14.06 million) of incompatible rescue aid received by the National Uranium Company (CNU) in 2016, plus interest.
The Commission has found that various Romanian public support measures in favor of CNU were not in line with EU rules on state aid to companies in difficulty, it said in a press release.
"A government can support a company in financial difficulty if the company has a sound restructuring plan which ensures its return to long-term viability, contributes to the cost of its restructuring and competition distortions are limited. In the case of CNU, these conditions were not met," executive vice-president Margrethe Vestager, in charge of competition policy, said.
"As a result, Romania cannot further support the company. It must also recover the aid already granted. This will restore the competitive situation in the market and ensure that CNU does not compete unfairly with other more efficient operators. It will also prevent CNU from maintaining inefficient loss-making operations, which could eventually lead to higher electricity prices and a higher cost to the Romanian taxpayers."
In June 2017, Romania notified to the Commission a plan for the restructuring of CNU, which was experiencing financial difficulties. The plan followed an urgent rescue aid loan of around 13 million euro granted to keep the company afloat, which the Commission had approved in September 2016 and which was not repaid within six months as required under EU state aid rules.
EU State aid rules only allow a state intervention for a company in financial difficulty under specific conditions, requiring in particular that the company undertakes a sound restructuring plan to ensure its return to long-term viability, that the company contributes to the cost of its restructuring and that competition distortions are limited.
According to the Commission, should CNU BE unable to pay back the aid, it should in principle cease economic activities and eventually be liquidated, with its productive assets being acquired by other companies.
CNU is a fully state-owned Romanian company active in the exploitation of Romanian uranium mines and production of raw material transformed into fuel for nuclear power plants. It employs around 770 staff and has two operating sites: an uranium mining site located in Crucea-Botusana and a processing-refining plant located in Feldioara.
CNU has been in financial difficulty since the loss of its main client, the local nuclear energy producer Nuclearelectrica, the Commission said.
($=0.9244 euro)