BRUSSELS, Belgium (AP) -- European Union regulators authorized Romania on Wednesday to grant euro143 million (US$223 million) in subsidies to Ford for the overhaul of two motor plants, saying it did not violate EU rules on state aid.
''I am pleased to approve aid for these important investment projects, which are expected to create more than 40,000 direct and indirect jobs,'' said EU Competition Commissioner Neelie Kroes.
The government aid will be part of a total investment of euro600 million (US$934 million) in the plants to make engines and complete vehicles in the Craiova region of southwest Romania, one of the EU's poorest regions.
''The effect of the aid on competition is deemed to be outweighed by its positive contribution to regional development,'' the European Commission said in a statement.
Before it can pay out the aid, however, the Romanian government will have to recover euro27 million (US$42 million) relating to the sale of Automobile Craiova assets to the U.S. auto giant last year.
The EU ruled in February that Romanian authorities had undersold the assets to Ford Motor Co. and should reclaim the money.
Ford, which was the only bidder, paid euro57 million (US$89 million) for a 72.4 percent stake. The EU said the stake was actually worth euro84 million (US$131 million) and Romania should recover the difference.
The Romanian government took over the debt-laden factory in 2006 after the previous owner, South Korea's Daewoo Motor Co., went bankrupt in 2000.