No L 223/22 Official Journal of the European Communities . 2.8.89 - COMMISSION ' COMMISSION DECISION of 8 March 1989 on the French Government’s aid proposal in favour of Caulliez Fréres, cotton yarn producer located in Prouvy, France (Only the French' text is authentic) (89/456/EEC) - THE COMMISSION -OF THE EUROPEAN COMMUNITIES, Having regard to-the Treaty establishing the ‘European Economic Community, and in particular the first subparagraph of Article 93 (2) thereof, Having given notice to the parties concerned to submit their comments as provided for in the said Article 93, and having regard to those comments, Whereas : By letter dated 3 March 1988 and with- reference to the Community guidelines on aid to the textile and clothing industry of 1971 and 1977 as communicated ‘to the Member States by letters of 30 July 1971 and 4 February 1977, the French Government notified the Commission of a.proposal.to grant financial assistance to Caulliez Fréres, a producer of cotton yarn located in Prouvy. The aid would be granted under the Regional Planning Grant Scheme (prime d’aménagement du territoire — PAT) and would take the form of a grant amounting to FF 5,3 million. It is intended to, facilitate investments of FF 77,6 million for the purpose of creating a new cotton yarn spinning-plant. Following an initial scrutiny, the Commission considered that the proposed aid would not meet the conditions which must be fulfilled in order to benefit. from any of the exceptions. set out in Article 92 (2) and (3) of the Treaty establishing the EEC .and, in particular,. that it would not be in line with the Community guidelines on aid ‘to the textile and clothing industry and would affect - trading conditions to an extent contrary to the common interest. Consequently, the Commission initiated the procedure provided for in the first subparagraph of Article 93 (2). By letter of 20 April 1988, it gave the French Government notice to submit -its comments. The other Member States were informed on :11 August and third parties on 18 August 1988. ' : 11 By letter dated 29 June 1988, the French Government. submitted its comments under the procedure thus initiated. It underlined .that the aid would be granted under the Regional Planning Grant Scheme as approved by the Commission on 10 October 1984 by Decision 85/18/EEC ('), which is why it considered that the procedure should not have been initiated at.all in respect of this aid proposal. Concerning the substance of the case the French Government took the view “that the sector concerned, combed cotton yarn, is far from being in an overcapacity situation and that~ other Member- States’ industries constantly increase their production capacities, whereas in France output has significantly been reduced over the years. It is also pointed out that the investment project is vital  for. the firm concerned because only by way of modernizing and rationalizing production the company can avoid falling behind technologically which would lead- to its disappearance from the market. Furthermore, the French Government states that the new capacity to be created amounts to 1 750 tonnes of combed cotton yarn whereas the present capacity of Caulliez Fréres is 2 400- tonnes. This new capacity, representing according to the- French Government a mere 0,6 % of present Community production, is considered unable to distort competition. The French Government points also to the situation on the French market where imports from- all - sources represent currently approximately 60 % of total consumption. Of these imports more than 50 % come from third countries, within and outside Europe. () OJ No L 11, 12. 1. 1985, p. 28.