WRITTEN QUESTION E-2270/00

by Dominique Souchet (UEN) to the Commission

(7 July 2000)

Subject: Penalties imposed on the Crédit Mutuel

The prospect of a Community decision to impose an enormous fine on the Crédit Mutuel because of the so-called State aid from which the Livret Bleu savings account is said to have benefited is causing legitimate concern not only to the 5 million holders of the account in question and the 27 000 voluntary elected representatives who have generously donated their time and skills in the service of the members of the company, but also to all those, many of whom are elected members of French local councils, who have a deep attachment to the mutualist spirit of local solidarity which has been, and continues to be, a decisive factor of economic development for many French regions.

At the end of an audit whose assessments, particularly those of a qualitative nature, are highly questionable, it would appear that the Commission is leaning towards imposing a penalty which would be both highly unjust and completely useless.

Unjust because the Crédit Mutuel is an institution which performs tasks of public interest particularly in the areas of local development and local-authority housing but has never made use of public funds, unlike many other institutions, to help it out of the banking disasters it has sometimes suffered.

Useless because behind the complaint by the AFB (Association of French Banks), which refers exclusively to matters of competition (although the volume of savings represented by the Livret Bleu 1,4 % of French savings, 0,2 % of European savings is clearly in no position to distort competition) is hidden the wish to see widespread distribution of such a tool, something to which the Crédit Mutuel has no objection, but only on condition that the practical implications and rules are seriously discussed and the Crédit Mutuel is not subject to discriminatory treatment.

In this context, the application of a penalty would certainly be a source of conflict, whereas the establishment being penalised proposes a negotiated, equitable and satisfactory solution, for the plaintiffs as well as everyone else. It is incomprehensible under these conditions that the Commission should persist in a repressive course of relentlessly pursuing the Crédit Mutuel, unless the real aim of the Commission is to attack, not the modest product constituted by the Livret Bleu, but the very principle of public savings collection, against which we know that the trans-Atlantic financial institutions harbour a deep hostility, refusing to take account of its role in economic development, particularly in the areas of SMEs and social solidarity.

Can the Commission assure us that it has absolutely no intention of imposing an unjustifiable fine on the Crédit Mutuel or of dismantling the French system of public savings collection by retreating into a restrictive interpretation of the Community competition rules, thus favouring external financial interests which are entirely alien and hostile to our deep-rooted, living tradition of mutualist solidarity?

Answer given by Mr Monti on behalf of the Commission

(13 September 2000)

The task facing the Commission as a result of the request to it by French and other competitors of Crédit Mutuel (CM) to determine whether state aid is involved in the Livret Bleu, very much a sui generis mechanism, is major. The system combines tax exemption on a savings product with the carrying-out of a task in the public interest. Whilst it is true that the bank is acting as an intermediary, it is necessary to determine under Article 86(2) (formerly Article 90) of the EC Treaty whether the exclusive right to distribute a tax-exempt savings product is likely to give CM advantages exceeding the costs of the task in the general economic interest entrusted to it by the State.

The Commission does not dispute either the purpose or the extension of general interest tasks. However, it must check whether the mechanism used has not unduly overcompensated Crédit Mutuel. Such overcompensation would amount to incompatible state aid.

In order to arrive at a correct assessment of the system-related costs and income for CM, it is necessary to study in detail the relationship between the State, the bank and its customers. A study of this nature would already be complex because of the triangular nature of the problem, but it is further complicated by the fact that the system in question must take account of two of CM's characteristics: the lack of separate analytical accounts for the Livret Bleu and the fact that a bank like CM is a multi-product business.

For that reason, an analytical cost accounting study of CM has been carried out and an expert assessment of the undue effects of the Livret Bleu on the bank's other activities is underway.

The Commission does not intend to impose a penalty or a fine on the bank, nor does it have the means to do so. But it must restore fair competition, if necessary by requiring the repayment of any aid which exceeds the amount justified by the task in the general interest entrusted to the bank by the French State and which does not qualify for exemption under any of the other provisions of Article 87 (formerly Article 92) of the Treaty. It should be noted in this respect that CM is in direct competition with the other Community banking institutions, offering as it does the same financial products other than the Livret Bleu.

It is not for the Commission to propose a solution for the future: its sole task is to examine whether any solutions that may be proposed by the Member State are compatible with the Treaty.