EU parliament backs German demand to prolong coal subsidies to 2018

Subsidies to loss-making coal mines in the European Union should not be phased out until the end of 2018, the bloc’s Parliament proposed Tuesday, backing German calls to prolong a deadline.

The European Commission, the bloc’s executive, said in July that uncompetitive mines should be closed off by October 15, 2014, arguing that subsidies were bad for the environment and fair competition.

But Germany – which would be heavily affected by such a plan – complained that following such timeline would compromise the competitiveness of its coal industry and cost too many jobs.

EU lawmakers – in a report drafted by a German Social Democrat – backed that line of argument during a plenary meeting in Strasbourg, France.

In a statement, they said they “regard the deadline proposed by the commission for the closure of coal mines … as arbitrary.”

While recognizing that their view on the matter was only “consultative,” deputies said they had sent “a strong political signal to the council (of EU states) that extending the deadline for state aid is indispensable to the future of about 100,000 coal miners and other staff.”

Most subsidized mines in the EU are located in Germany’s Ruhr region, the Jiu river valley in Romania, and in north-western Spain. Both Germany and Romania rely on coal-fired power stations for some 40 per cent of their electricity.

Poland, the largest producer of coal in the EU, is not expected to be significantly affected by the phasing out of subsidies.

EU states are expected to decide on the matter on December 10.

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