Merkel: Germany unlikely to demand that Nokia pay back R&D investment subsidies

State of North Rhine-Westphalia expects Nokia to return EUR 41.3 million

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The Federal Republic of Germany does not plan to demand that the Finnish mobile telephone manaufacturer Nokia pay back research and development investment subsidies following its decision to close a factory in the German city of Bochum.
     
At a press conference in Berlin on Monday Angela Merkel, the German Chancellor, responded to a question asked by Helsingin Sanomat that "the Federal Republic is not being active in the matter".
      "Primarily, we will offer executive assistance to the State of North Rhine-Westphalia", Merkel continued.
      The Federal Ministry of Finance suggested a couple of weeks ago that in protest against the plant closure it would look into the possibilities of demanding repayment of around EUR 10 million in investment subsidies that Nokia had received over the past years.
      Nokia reported on Monday that they had received an inquiry from the Federal Research Ministry, asking for information as to the use of the subsidies that the company had been granted at federal level.
     
According to Nokia, the company has been involved in a dozen or so joint basic research projects, the majority of which have already been completed.
      Nokia’s share in the projects has been one-tenth, and the funding has come from the Federal Republic and the cooperating companies on a fifty-fifty basis.
     
However, the State of North Rhine-Westphalia has already announced that it expects Nokia to pay back EUR 41.3 million in investment subsidies that the company received in 1998 and 1999.
      The basis of the demands is the contention that Nokia has not fulfilled its contractual obligations, under which it was to have created 2,860 permanent jobs in the factory.
      The deadline for Nokia’s response to the state is today - Tuesday.
     
Angela Merkel noted further that the relevant officials in the State of North Rhine-Westphalia and Nokia are to investigate together whether or not all obligations have been met under the terms of the subsidies.
      "After observing the situation closely, I now have an impression that Nokia has become more aware of the consequences and the drama surrounding its decision", Merkel concluded.
      Nokia's announcement in January that it would be closing the plant in Bochum and moving handset production to Romania caused a storm of protest across Germany, with many politicians calling for a boycott of the company's products.


Previously in HS International Edition:
  Nokia´s Kallasvuo apologises to Germans (25.1.2008)
  Nokia shutting down plant in Germany, moving manufacture to Romania (16.1.2008)
  Anti-Nokia sentiment unites Ruhr region in massive protest (23.1.2008)
  Nokia given extra time to respond to demands for payback of German subsidies (13.2.2008)
  Nokia could face series of court cases in Germany (7.2.2008)

Helsingin Sanomat