The European Commission has opened an in-depth investigation under EU State aid rules into capital injections destined to two subsidiaries of state owned company Elan Skupina in Slovenia.

The European Commission has opened an in-depth investigation under EU State aid rules into capital injections destined to two subsidiaries of state owned company Elan Skupina in Slovenia. The Slovenian authorities consider the €20 million injections into ski producer Elan and yacht builder Elan Marine do not constitute State aid. At this stage, the Commission has doubts as to the qualification of the measures, but will examine whether a private investor would have accepted to carry out these capital injections under the same conditions. The opening of an in-depth investigation allows interested parties to comment on the measures under assessment. It does not prejudge the outcome of the procedure.

“We need to ascertain that Elan has not received an unfair economic advantage over its competitors through the capital injection it received,” said Competition Commissioner Joaquín Almunia.

In 2007 and 2008, skiproducer Elan and yacht builder Elan Marine, both experiencing financial difficulties, received two capital injections totalling approximately €20 million. The capital injections originate from a number of companies owned by the Slovenian State. These measures were not notified to the Commission before their implementation.

The Commission received a complaint from a competitor, alleging that the capital injections amounted to incompatible state aid.

Under EU State aid rules, interventions by public authorities in companies carrying out economic activities can be considered free of aid provided they are made on terms that a private agent operating under market conditions would have accepted (the “market economy investor principle”). On this basis, the Commission will examine whether the State acted like a market economy investor when it took the investment decisions. If not, the investments will be considered to contain state aid and the Commission will verify whether they are compatible with EU state aid rules.