Brussels, 20/12/2011 (Agence Europe) - On Tuesday 20 December, the European Commission approved the financing of retirement pensions for civil servants working for France Télécom subject to certain conditions, believing it compatible with EU state aid rules. The ruling, however, remains subject to France Télécom bringing the calculation for its contribution fully into line with that of its competitors from July 2012 by covering risks such as a guarantee of payment of salaries in the event of bankruptcy. The Commission says the decision will not in any way affect the pension contributions and pensions of civil servants, who account for around 40% of France Télécom staff.
The financing scheme in place since 1997 involves a limitation on France Télécom's annual contribution towards the pensions of the staff concerned. By transferring to the French state the expenses it bore, the undertaking has benefited from an economic advantage which constitutes state aid. The Commission's investigation found that the financing arrangement was justified since it released France Télécom from expenses it took on when it was a monopoly operator, and also in view of the fact that it was a public service prior to 1990 and prior to the liberalisation of the sector. Moreover, France Télécom had to make an exceptional contribution of €5.7 billion in 1997, which covered the transfer of part of the expenses to the state. As a result, the financial advantages of the reform have been balanced out to date.
The reduction in pension contributions was offset by a €5.7 billion cash payment from France Télécom to the French state made in 1997. The Commission's decision is “subject to the calculation of France Télécom's annual contribution in respect of its public-service employees being brought entirely into line with that of its competitors in the French market”. In a separate case, the European Court of Justice confirmed earlier this month the European Commission's decision that France Télécom must repay to the French state €1 billion of aid received from 1994 to 2002 in the form of tax exemptions. (LC/transl.fl)