European Commission has approved a regional development grant equivalent to
pounds 24 million to help the Italian car manufacturer Fiat re-equip its plant
at Melfi in southern Italy to produce the new "Punto" model.

The Commission had earlier voiced suspicions that Melfi qualified for regional
aid and called for a "cost-benefit" investigation of its claims compared
to those of Fiat’s plant at Tichy in Poland. It said today (Wednesday) that
the extra costs of locating production in Melfi rather than in Tichy justified
the special regional aid. Total investment in the Punto at Melfi is put at around
pounds 220 million.