Following press reports and in response to a number of complaints, the Commission asked the French authorities for information concerning aid to the VEV textile group, which produces ready-to-wear clothing, car-seat covers and similar accessories, wool, woven products, knitwear, clothing and furnishing fabrics, and shirts. In 1991 the group announced a radical restructuring of its system of production and its finances. The industrial restructuring involves capacity cutbacks of some 45% and a reduction in the workforce from 10 300 to under 4 150. The financial restructuring involves an amount of just under FF 2.7 billion, FF 360 million of which is financed by government loans; the subsidy element of government assistance amounts to some FF 60 million. Since the aid was granted before the Commission was able to express an opinion, it was granted unlawfully. However, in view of the considerable reduction in production capacity and the probable return to normal profitability, with over 80% of the latter objective having already been achieved, the Commission has come to the conclusion that the aid in question may be considered as compatible with the rules on state aid laid down in the EEC Treaty. * * *
