BRUSSELS, Belgium—European Union regulators ordered Austrian authorities Wednesday to recover euro55 million (US$86 million) from the insurance group Grazer Weschselseitige, claiming that the money was a hidden subsidy that violates EU state aid rules.
The case dates back to the privatization in 2006 of the state-owned Bank Burgenland. Austrian authorities sold the bank to Grazer Weschselseitige, or GRAWE, for euro100.3 million (US$156 million), despite a rival offer of euro155 million (US$241.35 million) from an Austro-Ukrainian consortium.
After investigating a complaint from the consortium, the EU found that the acceptance of the lower bid had been a violation of EU state aid rules.
"The price difference between the two offers gives an unfair advantage to GRAWE over its competitors and constitutes incompatible state aid," the European Commission said in a statement.
The EU ordered the privatization of Bank Burgenland in 2004 as a condition for approving restructuring aid from the Austrian authorities.
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