The European Commission is to investigate whether a 61 million euro grant from the Spanish government to upgrade Volkswagen#;s 335 million euro Pamplona Polo factory for the new model met strict rules on state aid, the Financial Times (FT) said.
Brussels takes a tough line on state subsidies and this is the latest of a number of recent investigations, the newspaper added.
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The FT said that EC competition commissioner Mario Monti last month began to investigate the German government#;s 418 million euro subsidy for the new 1.2 billion euro BMW plant under construction in Leipzig.
European rules say that state subsidies must not exceed what the company could have saved by siting the project elsewhere, the FT said.
According to the FT, the Spanish government says it simply compensated Volkswagen for the 61 million euros it would have saved by building the plant in Bratislava, Slovakia.
But, the Financial Times said, the commission argues that Bratislava was not realistically considered as an alternative site.
