Brussels, 21/09/2012 (Agence Europe) - On Thursday 20 September, the European General Court rejected a request by France for a European Commission 2010 decision to be cancelled. The decision requires France to scrap illegal state aid to the country's post office, La Poste, in the form of an implicit financial guarantee arising from the special legal status of La Poste in the past as an “Etablissement public à caractère industriel et commercial (EPIC).”
In its decision of 26 January 2010, the Commission found that as an EPIC, la Poste was not covered by the ordinary law applicable for the winding-up of struggling companies, and it therefore benefited from implicit financial aid from the state for all its commitments, irrespective of the sums or duration involved, which confers an economic advantage over competitors, which have to operate without any such guarantee. The Commission therefore requested that France scrap this aid by April 2010 because it is incompatible with the proper functioning of the single market. The conversion of La Poste into a limited company on 1 March 2010 put an end to the guarantee anyway, but France lodged an appeal in April 2010 requesting all the same that the EU General Court cancel the Commission's decision.
In its ruling, the General Court rejected the appeal and validated the Commission's decision. Like the Commission, it found firstly that there was indeed the existence of an implicit guarantee from the state without any limits on amount or duration, arising from La Poste's EPIC status. While French law does not expressly lay down such a state guarantee, it does introduce a different mechanism for EPICs that is more favourable for their creditors than the system laid down for winding up private companies, as the Commission rightly pointed out. In the event of cash-flow problems, either the payment of an EPIC's bills is postponed or the state intervenes to pay them, whereas creditors of private companies can fail to get their bills paid in the event that the company goes under.
Secondly, the General Court rules that the unlimited state guarantee constitutes an advantage to the benefit of La Poste due to the positive influence it wielded on La Poste's credit rating. Such a guarantee, for example, gives La Poste more favourable conditions for loans than it would acquire under its own merits and therefore reduces pressure on its budget.
The General Court states, thirdly, that the Commission provided enough objective elements (memorandums, circulars and consequences of legislation) to demonstrate that the unlimited state guarantee, although not explicitly laid down in French legislation, conferred financial advantage for La Poste and therefore constituted state aid. (FG/transl.fl)