WRITTEN QUESTION E-3615/02 by Benedetto Della Vedova (NI) and Marco Cappato (NI) to the Commission. State aid for France Telecom from the French Government.
Date: 2002-12-16
Institutions: European Parliament, Provisional data
Subjects: France, State aid, capital increase, control of State aid, investment protection, restriction on competition, telecommunications industry

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Official Journal of the European Union

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Meanwhile, it should be noted that the active commitment to openness and transparency given by the
Commission does not diminish the obligation of all officials to respect the rules and procedures.

(1) See for example most recently the Communication COM(2002) 671 of 3.12.2002.
(2) Court of Auditors (cid:1) Annual report concerning the financial year 2000 (cid:1) OJ C 359, 15.12.2001.
(3) Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the
implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the
general budget of the European Communities (cid:1) OJ L 357, 31.12.2002.

(4) SEC(2002) 853 final.
(5) COM(2002) 755 final.
(6) OECD: Organisation for Economic Co-operation and Development.
(7)
(8) http://europa.eu.int/comm/external_relations/reform/document/communication_en.pdf.
(9) COM(2002) 426 final.

IFAC: International Federation of Accountants.

(2003/C 280 E/020)

WRITTEN QUESTION E-3615/02

by Benedetto Della Vedova (NI) and Marco Cappato (NI) to the Commission

Subject: State aid for France Telecom from the French Government

(16 December 2002)

It has been announced that the French Government intends to adopt a ‘revival plan’ for the telephone
group France Telecom (FT),
in which it has a 55,5 % holding and which has a global debt of nearly
EUR 70 billion.

The plan envisages an immediate injection of EUR 9 billion from the State, as an advance payment in the
context of recapitalisation amounting to EUR 15 billion, probably to be completed by next spring.

The advance of EUR 9 billion would consist in transferring FT shares from the French State to the
‘Entreprise de recherches et d’activités pétrolières’
(ERAP), which would then take steps to borrow
EUR 9 billion from the ‘Caisse des dépots et consignations’ (CDC), which it would in turn lend to FT. The
CDC loan to ERAP would be guaranteed by the French State.

1.
Does the Commission not consider that if the guarantee offered by the French State allows FT to
acquire, via ERAP, financial resources at an interest rate lower that which an operator on the private
market would have asked, this constitutes an instance of State aid of the kind which ought to be notified?

Does it not also consider that the very guarantee provided by the State for debts incurred by a public
inaccessible to private competitors needing comparable

2.
company (a guarantee which is, obviously,
financing) constitutes State aid?

3.
Does it not also consider that, at a particularly difficult moment for the telecommunications sector,
this kind of intervention on the part of national governments (cid:1) who are both ‘referees and players’ in the
same sector and are therefore involved in an obvious conflict of interest (cid:1) constitutes a serious distortion
of competition which makes the situation of operators (cid:1) both businesses and employees (cid:1) who cannot
count on State aids even more critical?

Answer given by Mr Monti on behalf of the Commission

(12 February 2003)

On 4 December 2002 the French authorities have submitted to the Commission a document describing
the intervention of the French State in respect of France Telecom. The Commission has studied this
document to see whether or not this intervention raises doubts under State aid rules. The Commission has
carried out a preliminary examination focused on the question of whether the intervention is in line with
the market economy investor principle, i.e. non implying State aid, and, if State aid is involved, whether
such State aid could comply with the State aid rules. Following this preliminary examination the
Commission has doubts as to the compliance of the French intervention with State aid rules. Accordingly,

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on 30 January 2003 it has decided to open the formal investigation procedure provided for by Article 88
(2) of the EC Treaty. This procedure will allow an in-depth investigation of the State intervention, and all
interested parties to present their observations.

Given the economic importance of the case the Commission has treated it as a priority and it has been
able to clarify its preliminary position in the a few weeks. The answer to the issues raised by the
Honourable Member must be considered against the background of the decision to open the formal
investigation procedure adopted by the Commission. It seems useful to make some general remarks as to
the issues raised.

1.
As to the question concerning the possibility for France Telecom to obtain financial resources at
conditions that are more favourable than those applicable to other operators thanks to the intervention of
ERAP, it should be noted that when a company is able to obtain financial resources at conditions more
favourable than normal market conditions thanks to a State intervention implying the actual or potential
mobilisation of State resources (regardless of whether this is a direct intervention or an indirect one
through another State body), the State intervention constitutes, in principle, a State aid that must be
notified, provided the other requirements of Article 87(1) of the EC Treaty are fulfilled.

As to the general question concerning State guarantees, it must be underlined that a State guarantee
2.
may constitute a State aid only if
the guarantee is not remunerated by an appropriate premium.
Commission notice on the application of Articles 87 and 88 of the EC Treaty to State aid in the form of
guarantees (1) provides for more details as to the Commission’s approach in this matter.

3.
On the last issue raised by the Honourable Member, regardless of whether the telecom sector is
undergoing a sectorial crisis, the Commission believes that State aid rules must be respected in any
particular economic conjuncture. In this connection, it should be reminded that State interventions must
be assessed on the basis of their effects. Therefore, when a State measure qualifies as State aid, the
Commission has to take the appropriate steps to ensure that the aid does not distort competition to an
extent contrary to the common interest.

(1) OJ C 71, 11.3.2000.

(2003/C 280 E/021)

WRITTEN QUESTION E-3616/02

by Erik Meijer (GUE/NGL) to the Commission

(16 December 2002)

Subject: Regular and safe maritime shipping services on fixed routes jeopardised by ban on price

agreements and authorisation to award secret discounts

1.
Does the Commission intend to discontinue the liner conferences established towards the end of the
19th century that have ensured scheduled shipping services on fixed routes at fixed prices, and which as
recently as 1986 were expressly exempted from the ban on price agreements within the European Union?

2. Will the Commission allow shipping undertakings the option of awarding discounts to regular
customers without disclosing them to others?

3. What are the effects of lower prices on the availability of shipping services on routes and at times
where the provision of cargo services in conditions of free competition would no longer cover costs? Does
it expect that vessels so affected would continue to put to sea?

4.
Does it expect lower prices to act as an impetus to putting to sea in aged and dilapidated vessels that
pose serious risks to their crews, other shipping, the maritime environment and shorelines, since they are
much more vulnerable to accidents?

5.
Are the income reductions suffered by shipping companies being passed on to their staff? Are such
measures an incentive to reduce seafarers’ remuneration and working conditions by registering ships under
flags of states that apply less stringent conditions than are the rule in EU Member States?