The European Union’s top court on Tuesday upheld a ban on German government subsidies to Volkswagen AG to build car plants in east Germany in the 1990s, Reuters reported.

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Reuters said the European Commission’s competition watchdog in 1996 blocked DM 240 million of state subsidies and the EU’s Court of First Instance supported the decision in 1999, saying that Europe already was building too many cars.


According to the report, the lower court added that Germany did not have a blanket right to give money to East Germany, where communist-era Trabant cars could not compete with western vehicles, while the European Court of Justice said that it confirmed the lower court’s decision.


A Volkswagen spokesman told Reuters the decision would have no financial impact.


“The judgment will have no effect on VW’s results and no practical consequences,” the spokesman said, according to the report.

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