Information Bulletin
18 October 2006
Shetland Islands Council strives to address State Aid concerns with Commissioner Borg and MSP Ross Finnie
In advance of Commissioner Borg’s visit with MSP Ross Finnie tomorrow in Shetland (Thursday 19th October) to meet with key fishing industry representatives on their scheduled visit, the Council is striving to use this visit as an opportunity to raise their concerns over state aid with these politicians.
Councillor Leslie Angus, European Spokesperson, said: “the State Aid Regulations, intended to prevent nation states distorting trade are now being applied in a fashion never envisioned by the authors of the original regulations. The contention that a productive workforce of 5,000 people in the most peripheral part of the European Union could somehow distort international trade through preferential investment of local community funds is frankly farcical. These regulations must be urgently reviewed if they are to retain credibility and continue to fulfill their original purpose.”
The Shetland community is seeking political support at a Scottish, Westminster and Commission level in order to enable Shetland to invest its community funds in the islands’ economy.
The Council is also preparing a briefing paper which the Conference of Peripheral Maritime Regions of Europe (CPMR) have agreed to table as a matter of urgency at their General Assembly in Spain which begins on the 25th of October.
Jean-Didier Hache, Executive Secretary of the CPMR Islands Commission said “ This situation is extremely serious indeed, with potentially disastrous consequences for Shetland and I feel it is vital for the CPMR Islands Commission to assist Shetland during this difficult period.”
The three-day conference will give Shetland representatives, Councillor Leslie Angus and Councillor Josie Simpson the opportunity to speak to members from European regions. Speakers at the conference also include Mr John Richardson, Director of the Maritime Affairs Task Force of the European Commission.
As Councillor Josie Simpson noted, “Shetland is a key maritime community which relies on the export of fisheries resources and it is imperative that solutions can be developed and approved by Europe to ensure that the Council can assist in its own community investment towards the continued sustainability of this vital industry in Shetland.”
Ends
Notes to Editor
Conference of Peripheral Maritime Regions of Europe (CPMR)
The 3rd CPMR General Assembly is being held from the 25th-27th of October in Murcia, Spain. Councillor Simpson and Councillor Angus will be attending as representatives of Shetland. The issues faced by Shetland in relation to state aid is being raised a matter of urgency at the Conference and opportunities will be available over the three day conference to discuss these matters.
The Conference of Peripheral Maritime Regions of Europe (CPMR) is independent of EU institutions. In the interest of its members regions, it is:
- TACKLING THE DISADVANTAGES ENCOUNTERED BY EUROPE'S PERIPHERY
- PROMOTING EUROPE'S MARITIME DIMENSION
- EXPLOITING THE BENEFITS OF BEING CLOSE TO EUROPE'S CITIZENS
The CPMR decided to organise itself into geographical commissions in order to make it easier to articulate the particular circumstances of each of the major sea basins.
Each geographical commission has its own organisational structure, so that it can promote its specific identity and cooperate on subjects of common interest, while contributing to the cohesion and unity of the conference.
The Islands Commission was set up in 1979 to defend the notion that being an island is not synonymous with isolation. Shetland is a member of the Islands Commission and Councillor Angus and Councillor Simpson are both lead representatives for Shetland on this Commission.
The aims of the Islands Commission are to: Urge the European Institutions and Member States to pay special attention to the islands, to acknowledge the permanent handicaps resulting from their insularity, and to implement policies that are best suited to their condition. To foster interregional cooperation between islands, especially on issues in direct relation with their insularity.
Please visit www.commissiondesiles.org and www.crpm.org for more information on these organisations
State Aid Overview
A specialist team of lawyers have been working with the Shetland Islands Council and Shetland Development Trust to develop a robust case to demonstrate to the Commission that the schemes were compatible with the common market. This case has now been given to the relevant Scottish Executive officials for the case submission to the European Commission.
Over 40 businesses and 82 local fishermen could be affected by the serious concerns raised by the European Commission within the following four scheme areas:
- First Time shareholders scheme
- Fishing Vessel Modernisation scheme
- Fish Factory improvement scheme
- Salmon Farming and Fish Processing Loan assistance scheme run by the Shetland Development Trust
No recipients have been asked to take any action at this time. The total monies which has been given by the Shetland Islands Council in grant assistance within these four schemes is £771,193.41.
The total monies given as loans with the Salmon Farming and Fish Processing Loan Assistance scheme operated by the Shetland Development Trust is £3,949,430.00.
The total monies repaid in full by recipients to the Shetland Development Trust were £1,897,981.00, with £281,084.40 still being collected. The remaining outstanding balances are either non recoverable or in the process of recovery through liquidators due to the significant downturn in the aquaculture industry and a number of companies subsequently going into receivership.
Whilst the investigation continues into the grant and loan schemes, the further state aid complaints against the proposed investment into Smyril Line and the proposed new pier investment at Sellaness have halted any investment into these projects whilst further investigations into these specific complaints are concluded.
There is no indication as to the timescale for the European Commission to take decisions on the above investments under scrutiny. Meanwhile, the Scottish Executive has been granted an extension until the 10th of November by the European Commission on submitting the response on the alleged state aid investment into Smyril Line.