Subsidies for power plants under European Commission scrutiny

The case, due to begin on the day of accession, is the first instance of the EC investigating anti-competitive government practices in any of the new member states. The investigation, say lawyers, means a practical freeze on the government bail-outs of eight out of the 15 power generation concerns in the country for at least two months after the May 1 accession . The government insists that subsidies are necessary due to revoking the plants' long-term contracts with the National Grid (PSE), resulting from the liberalization of the energy market. The Commission concedes that subsidies might be legal under such circumstances, but claims the government has failed to provide detailed evidence regarding the aid, including the amount of money involved. "Once the investigation is launched, Poland will be obliged to provide all required information within a month," said a senior source inside the European Commission. "Failing to fulfill this obligation, the Commission would limit aid on the basis of its own calculations." (Rzeczpospolita, p. B1) A.N.