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Multinationals receiving millions in EU subsidies

02 December 2010, 10:41 CET
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(LONDON) - Multinational giants including Coca-Cola, IBM and McDonalds are receiving European Union subsidies in an attempt to prevent them leaving the economic zone, the Financial Times said Thursday.

EU structural funds are intended to even out disparities in wealth across the area by targeting small and medium businesses in poorer member nations.

However, global corporations are also eligible to the pool of money and are taking advantage of the EU's desire to retain its competitive edge, according to the FT and Bureau of Investigative Journalism's study.

"There is a global contest," EU commissioner Johannes Hahn told the paper. "If we don't participate in this contest all the production sites will go out of Europe, so we have to find ways to keep them."

The paper found that IBM was granted 20 million euros for a project in Poland, Fiat applied for a 25 million euro grant and McDonalds received 60,000 euros to train Swedish staff.

Poland received 67 billion euros of structural funds, which the paper claimed was used to attract blue-chip companies.

"EU money is very correctly spent in Poland and has very positive effects," Polish deputy minister of regional development Waldemar Slugocki told the paper.

"It allows a business to build up long-term competitive advantage, which helps make the Polish and European economy more innovative," he added.

The study also found that millions of euros in EU funds were given to businesses who were moving factories from rich to poorer countries, despite rules forbidding the use of grants to help companies search for cheaper labour.

Companies including British tea-maker Twinings and mobile phone giant Nokia took advantage of grey areas in the method of allocating structural funds to help subsidise their moves to countries with cheaper labour, the FT claimed.

The paper said the companies were "at the very least receiving EU subsidies to help with the establishment of new factories, the extension of existing ones and the training of workers in their new homes."


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