Description

22. If the Clyde and Hebrides ferry services are not brought into line with EU rules and the European Court of Justice were subsequently to find that such an action was in breach of EU rules the consequences could be severe. Following on from such a ruling, the Commission could order the immediate cessation of subsidy to Caledonian MacBrayne and that the Executive recover from Caledonian MacBrayne all subsidy that had been declared to be illegal State aid.

23. Whilst the Commission has taken formal action against some Member States in relation to the Maritime Cabotage Regulation it has preferred to work with Member States to bring their services into line with EU rules rather than to use its draconian powers. Indeed, the Commission has worked with the Scottish Executive over the last 6 years as ways of complying with EU law have been discussed. However, the European Commission has made it clear to the Executive that if action is not taken shortly to bring the Clyde and Hebrides services into line with EU rules then the Commission will initiate formal proceedings. It should be noted that, on 29 June 2005, the UK government received a pre-infraction letter from the European Commission in relation to the Clyde and Hebrides ferry ervices. If this action were to proceed to a full investigation it could seriously jeopardise these lifeline services.