Czech government subsidizes Trinecke despite EU's rejection

Czech government subsidizes Trinecke despite EU’s rejection

In European Commission's recent report on EU candidate countries released early November, state subsidy to the Czech steel maker Trinecke Zelezarny (TZ) has been rejected. However the government approved to support the company, 65% of which is owned by Moravia Steel and 11% by the US producer Commercial Metals Company. The state subsidy, also subject to Czech Antimonopoly Office's (UOHS) approval, requests the hand over of TZ's bonds from the bailout agency CKA (Ceska Konsolidacni Agentura) to TZ, against CZK 100 million ($3.7 million). Bonds are reportedly worth CZK 1 billion ($36.9 million). Additionally, government will buy TZ's 10% stake in Nova Hut. Previously, the government subsidized the Dutch LNM Group which is the owner of Nova Hut and Vitkovice, on condition that these steel producers meet the requirements set, such as limitations on their steel production. It is reported that all state subsidies have to complete by 2006.