WRITTEN QUESTION E-3111/02

by Charles Tannock (PPE-DE) to the Commission

(30 October 2002)

Subject: State aids to the French electricity sector

Can the Commission confirm that Commissioner Monti has recently launched an inquiry into the unlimited state guarantees given by the French Government to the state-owned energy utility Electricité de France (EdF)? Does the Commission believe that the utility has benefited from approximately EUR 900 million in unlawful tax breaks, and what is the legal position regarding France's failure to open up its electricity sector?

Commissioner Monti was reported in the press as saying The Commission has decided to wind up a situation which creates a distortion of competition (), especially where EdF is expanding into other countries. If the Commission believes that France is currently in breach of its obligations to liberalise its electricity sector, will it prohibit further acquisitions by EdF?

Finally, the French Government is reported to have described the Commission's actions as a provocation. If the Commission decides to issue a reasoned opinion, does it have the option of publishing it and including the responses of the French Government so that an open and informed debate on the issue may take place with full disclosure of the relevant facts?

Answer given by Mr Monti on behalf of the Commission

(10 December 2002)

On 16 October 2002 the Commission has decided to propose appropriate measures under Article 88(1) of the EC Treaty and to initiate a formal investigation under Article 88(2) of the EC Treaty with respect to a series of State aid measures in favour of Electricité de France (EDF). In particular, the Commission has proposed to the French Government to remove the unlimited State guarantee that EDF enjoys under the so-called EPIC status (Etablissement public à caractère industriel et commercial) and to charge a premium for not yet redeemed bonds issued by EDF with an explicit State guarantee. Under the formal investigation, the Commission has also questioned the compatibility with the common market of a tax-relief from which EDF has apparently benefited as a result of accounting adjustments recorded in 1997. According to the French authorities the advantage in tax-relief terms could be estimated at approximately EUR 900 million.

The Commission has asked the French Government to accept the proposal of appropriate measures and to inform the Commission, within one month from the date of the decision, of the measures it intends to adopt to comply with it. As regards the formal investigation, the Commission has invited the French Government to submit, within one month too, its comments on the possible incompatibility of the tax advantage.

The Commission will invite third interested parties to present their comments to the Commission by means of the publication in the Official Journal of the letter by which the Commission informed the French Government of its decision. Publication will take place after the French authorities confirm to the Commission that there is no confidential information in the decision. According to the provisions on the formal investigation set out in Articles 6 and 7 of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 88 of the EC Treaty(1), the comments from the French Government will be published when the Commission adopts its final decision on the case.

Finally, it should be noted that, as regards the transposal into French law of Directive 96/92/EC of the Parliament and of the Council of 19 December 1996 concerning common rules for the internal market in electricity(2), the Commission has no reason to believe that such transposal is not in line with the said Directive.

(1) OJ L 83, 27.3.1999.

(2) OJ L 27, 30.1.1997.