The Economic Impact of Prohibiting State Aid for the Romanian Steel Industry

I. Bostan, V. Grosu, “Stefan cel Mare” University, Faculty of Economics, Suceava, Romania. The adjustment of the Romanian steel industry restructuring programmes to the requirements of the EU and the implementation of such programmes has supported the development and growth of Romanian steel companies. The total amount of State aid allowed in Romania has been of € 1,2 billion and was mainly awarded for fi nancial restructuring and to a smaller extent for exemption from VAT and corporation tax. The EC has constantly monitored the Romanian steel industry and the way in which State aid has been granted by the Romanian government. As a consequence of the restructuring process– whit entry into force the EU Association Agreement was enforced – several obsolescent plants have been shut down because of physical and moral wear and tear, and the total number steelworkers has decreased signifi cantly.