Brussels, 05/05/2010 (Agence Europe) - The European Commission sent France a warning letter on Wednesday 5 May, requiring it to implement a 13 November 2008 European Court of Justice ruling stating that France had failed to recover incompatible state aid awarded in the form of exemptions from corporate tax for takeovers of struggling companies. This is the first stage in the Commission's infringement proceeding for failure to implement Court of Justice rulings.
The Commission says that the tax exemptions in question infringe EU state aid rules because they gave selective advantages to certain companies without objective justification. French law exempts from corporate tax for a period of two years companies purchased in the course of an insolvency procedure, and the scheme was implemented without EU clearance.
The Commission acknowledges the difficulties encountered by the French authorities in calculating the aid to be recovered and ensuring repayment from over 200 companies. It also acknowledges the efforts made by the French authorities since September 2009 to take concrete steps towards an effective recovery. However, to date, only 27 companies have reimbursed the aid. Furthermore, France has still not provided the Commission with the necessary evidence to definitively conclude that the main beneficiary of the scheme, FagorBrandt SAS, has effectively reimbursed the aid, even though the repayment of that aid was an explicit pre-condition in the Commission's decision authorising France to grant new restructuring aid to the FagorBrandt group. For this reason, the Commission has sent France a formal notice which, if not complied with, could result in the matter being referred to the Court of Justice for fines to be imposed until the aid has been fully recovered.
France has two months in which to submit its comments. (F.G./transl.fl/rt)