THE EUROPEAN Commission has approved a €55 million Polish grant to Dell, which helped the company set up its new manufacturing plant in Lodz.

The new Dell operation in western Poland has been the main beneficiary of Dell’s decision to shed 1,900 jobs at its manufacturing plant in Limerick.

Dell’s plant in Lodz opened in January 2008 and cost €190 million to build. It currently employs 1,700 staff, but it is expected to expand further as more operations are shifted from Limerick to the new greenfield facility.

The EU executive had queried the €54 million grant paid by the Polish authorities as an incentive for Dell to establish the new operation. In December 2008 the commission opened a formal investigation into the aid, and expressed doubts about the compatibility of the grant with EU rules on regional aid for large investment projects. EU rules say it is illegal for a member state to provide aid to a firm for a new project which would result in disproportionate distortion of competition in the EU’s internal market.

Competition commissioner Neelie Kroes said yesterday a detailed economic analysis of the market and the impact of the aid was necessary for cases like this, which had a high risk of distorting competition and resulting in job losses in other member states. But she said the aid was legal because the Dell project’s “contribution to regional development and job creation in a disadvantaged region of Poland outweighs any potential negative effects”.

The commission’s investigation concluded that Dell’s decision to close its plant in Limerick was not as a consequence of the grant paid by Poland. It is understood Dell was committed to closing Limerick and opening a new plant in eastern Europe in either Poland or Slovakia prior to the offer of Polish aid.

The decision to approve the aid was criticised yesterday by campaigners against the Lisbon Treaty. Libertas’s Declan Ganley said the decision proved beyond any reasonable doubt that Ireland’s best strategy was to hold on to key areas of economic sovereignty and not give them away to Brussels. He said approval of the €55 million grant to Dell just days after announcing a relatively paltry €15 million in aid for Limerick was an insult to Irish Dell workers, who had lost their jobs.