WRITTEN QUESTION E-2283/01

by Professor Sir Neil MacCormick (Verts/ALE) to the Commission

(31 July 2001)

Subject: Scottish Ferries

Can the Commission please confirm the following facts and comment on their relevance to the decision concerning Scottish Ferries?

Sweden is about to introduce a shipping subsidy of £900m a year, of which domestic ferries would account for £350m, which is claimed to be in line with the EU Guidelines.

The EU Regulations and Guidelines were drawn up without reference to or knowledge of the unique circumstances of Scottish lifeline ferry services.

After a three-year investigation following a complaint from P & O, the European Union has approved £30m State aid to Brittany Ferries by the French Government on the grounds that the company is a motor of regional development in Brittany and Lower Normandy, in Plymouth and Poole and at Santander.

Answer given by Mrs de Palacio on behalf of the Commission

(23 October 2001)

When preparing the Community guidelines on State aid to maritime transport(1), the Commission was aware that there exist a multitude of different conditions under which ferry services are provided and that evidently the guidelines could not be conditioned by any one particular region within the Community. Chapter 9 of the guidelines permits public service obligations, in principle, to be subsidised. The definition of a public service obligation isany obligation imposed upon a carrier to ensure the provision of a service satisfying fixed standards of continuity, regularity, capacity and pricing, which standards the carrier would not assume if it were solely considering its economic interest. The guidelines do not define these standards. This is left to the competent public authorities who have a detailed local knowledge of the level and type of service necessary and who, at the same time, are responsible for reimbursing the operating losses incurred. The Commission's role is to ensure that the principles of non-discrimination and proportionality are upheld. Any tender to be launched should fulfill the requirement of non-discrimination defined in Article 4 of Council Regulation 3577/92 of 7 December 1992(2) and should also test the market, to ensure that there is no overcompensation.

As far as the reference to the Swedish subsidies is concerned, the Swedish authorities have notified the Commission of their plans to introduce a subsidy for the Swedish shipping industry in the form of reductions/exemption of taxes and social contributions for seafarers. The notification is currently examined by the Commission in the light of relevant state aid provisions and, as the Honourable Member of Parliament will understand, the Commission is at this stage not in a position to prejudge the result of this examination or to reveal any confidential information enclosed in the notification.

It should also be noted that the amount of subsidy notified by the Swedish authorities does not correspond to the figures provided by the Honourable Member but is considerably less.

Finally, concerning the reference to the recently approuved aid to Brittany Ferries it should be pointed out that, following a complaint, the Commission opened the formal investigation procedure in April 1998 and extended this procedure in December 1998. In May 2001 the Commission decided to approve 48,2 million State aid to Brittany Ferries and disapproved over 12,2 million as well as over the State aid element of a state guarantee, which is to be recuperated.

The Commission decision was taken essentially on the basis of the guidelines on State aid for rescuing and restructuring firms in difficulty and of the Community rules on State capital injections. Within the limits provided for in the above mentioned rules, the decision takes account of regional development aspects.

(1) OJ C 205, 5.7.1997.

(2) OJ L 364, 12.12.1992.