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EU Coal Nations Near Victory In Subsidies Fight

Date: 09-Dec-10
Country: GERMANY
Author: Pete Harrison

EU Coal Nations Near Victory In Subsidies Fight Photo: Fabrizio Bensch
An aerial view shows excavators mine coal at the open-cast mining near Vattenfall's Jaenschwalde brown coal power station near Cottbus, eastern Germany August 8, 2010.
Photo: Fabrizio Bensch

Germany and other European coal-mining countries looked set on Wednesday for a victory over environmentalists by securing an extension of coal subsidies until 2018.

The European Commission, the EU's executive, had proposed in July that the coal mining industry should only get four more years of state aid before subsidies are phased out in 2014, the sixth such extension of state aid since 1965.

But with thousands of jobs on the line, Germany led other coal-mining countries such as Spain in pushing hard to extend subsidies to 2018, to fit around Berlin's own national laws. That position looks to have won the day.

"The Commission has agreed to reduce the coal subsidies over the next eight years in a relatively linear way," Europe's Energy Commissioner, Germany's Guenther Oettinger, said after convincing his colleagues to extend the subsidies.

A separate meeting of all 27 EU ambassadors in Brussels on Wednesday also approved the move, with Sweden the last country to concede to Germany's will.

Environmentalists and green politicians oppose the move, saying taxpayers' money should not be wasted on supporting an uncompetitive and polluting industry at a time when the European Union should be focusing on creating new jobs in a green economy.

"Brussels has bowed to Berlin, while the climate has taken a back seat," said Mark Johnston of WWF. "It is not a good day for the independence of the European Commission, but at least this extension to state aid will be the last."

The decision will now be rubber-stamped at a meeting of ministers on Friday.

(Editing by James Jukwey)

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