The European Commission has started an in-depth investigation into whether the restructuring of Poland's second-largest steel company, Huta Czestochowa, violated EU rules concerning state aid.

This is the first such probe in any of the ten accession countries which joined on May 1.

Huta has been plagued by financial problems which the government has been planning to redress with state aid. EU regulators said they are "seeking clarification whether and what kind of state aid will have been granted up to 2006."

They believe that Huta's bankruptcy was avoided by persuading creditors to agree to a restructuring plan and that the state agreed to write off part of its debt.

(NewsBase 24.v.04)