European Commission has barred Fiat truck and van subsidiary Iveco from receiving
320 billion lira ($US139 million) in Italian state aid.

The commission said on Wednesday that the proposed research and development
assistance to the company, which sought aid for the development of a new range
of light vans, was incompatible with EU regulations.



The Italian government had proposed the aid in 1999 as a contribution towards
a 213 billion lira project for the renewal and expansion of the Iveco range
aimed at developing a new ‘vehicle system’ for the S 2000 model line-up.

But, after a lengthy investigation, the Commission concluded that the aid was
"not necessary."

Although the new vehicle range, developed in 1994-99, did show improvements,
these were "limited to what is common in the motor vehicle industry in
the context of the development and launch of new models," the Commission

Such programmes were "therefore to be considered normal day-to-day operations."

The Commission generally took a positive view of aid for R&D but if the
development of a new model or range of models were to be considered a research
activity deserving aid, every car manufacturer could claim R&D aid for every
new model it brought to the market, it said.

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