The EU and state aid

Romania cleared by Brussels to provide state aid for closure of two uncompetitive coal mining units.

Bogdan Matei, 25.11.2016, 13:16

The European Commission has approved the
equivalent in lei of 100 million euros in state aid Romania will be shelling
out in order to be able to close down two more unprofitable coal mines, Lonea
and Lupeni, in the Jiu Valley, in the south-west. According to a communiqué
issued by the European Commission Representation in Bucharest, the EU Executive
decided the move is in line with European rules, as member countries can
provide state assistance in situations like this in order to diminish the
environmental and social impact. More than half the sum will go to the workers
in the form of compensation and job retraining programmes and for the works
related to closing down the mines, land rehabilitation and recultivation. Some
of the money will be used to cover production losses until the complete closure
of the two facilities, the communiqué also says.

The mines of Lonea and Lupeni are units of the
Hunedoara Power Compound and their closure must be completed by the end of 2018
at the latest. The measure comes after the compound has been legally declared
as coming out of insolvency earlier this month, a situation in which the plant
also found itself in the first half of the year. The Hunedoara Power Compound
employs thousands of people at its two thermal power stations and four
coal mines.

The process of closing down two of these mines
is but one episode in the long agony of Romania’s mining industry. A privileged
sector during the communist dictatorship for both pragmatic and ideological
reasons, the mining industry used to ensure the vitality of a high energy
consuming industry. Miners would be far better paid in comparison with other
employees, but their tough and alienating work turned them into an
unpredictable mass.

Back in 1977, the Jiu Valley saw one of the few
anti-communist revolts in Romania. 13 years later however, shortly after the
anti-communist revolution, trains full of miners from Jiu Valley left for
Bucharest to support leftist president Ion Iliescu who was claiming that a coup
was being perpetrated by the right-wing. For two days, on June 14th
and the 15th 1990, the miners took control of Bucharest, disregarding any
form of legal authority. During their raid, six people were killed, 700 wounded
and over 1,000 abusively detained. The miners stormed and looted the university
building and the headquarters of independent parties and newspapers.

Almost three decades on from the miners’ raids
on Bucharest, Romania’s mining industry is still the same unprofitable and
heavily polluting sector. Its activity has been shrinking since the mid-1990s,
when Romania’s Christian-Democratic government moved to close down the first
mines. Some of the miners who were made redundant started to open small
businesses, others returned to their native regions, while others went to work
abroad. Experts believe we are going to see the same scenario after the closing
down of the two coal mines in Lonea and Lupeni.