Brussels, 19/03/2013 (Agence Europe) - On Tuesday 19 March, the EU Court of Justice upheld (in joined cases C-399/10 P and C-401/10 P), the European Commission's decision classifying as state aid the French state's declarations of support for France Télécom in 2002 and its offer of a shareholder loan for €9 billion. It quashes the 2010 ruling by the General Court annulling the decision and rules that the shareholder loan conferred upon the company an advantage granted through state resources that could potentially have burdened the state budget.
Given the financial difficulties endured by France Télécom (FT), a company 56.45% state-owned company, the French government had announced on several occasions since July 2002, in various press releases and in an announcement to the board of directors of the company on 4 December 2002, measures in favour of the company, including a state contribution to strengthening its capital base. The French state announced end December 2002 that it planned to participate, in the form of a draft shareholder loan contract, in the €15 billion strengthening of FT capital base in proportion to its share in the capital, giving an investment of €9 billion - but the company had neither signed it nor implemented it. The European Commission concluded in 2004 that the loan, placed in the context of declarations made by the government since July 2002, was state aid incompatible with EU law.
The General Court had annulled the decision in 2010 (cases T-425/04, T-450/04 and T-456/04), considering, like the Commission, that the declarations by the French authorities had certainly conferred an advantage on France Télécom by restoring the confidence of the financial market and allowing it to refinance in more favourable conditions. That advantage, however - as FT had not carried out the contract for a shareholder loan - did not lead to a corresponding reduction of the state budget, so that the condition relating to financing through state resources was not fulfilled. The General Court held that, for each state intervention, the Commission should have individually examined whether it conferred a specific advantage through state resources or by creating a sufficiently concrete economic risk of burdens on that budget, closely linked and corresponding to the advantage identified.
The Court of Justice has now annulled that ruling, deeming that the General Court wrongly required a close connection between the advantage and the commitment of state resources, which led it to exclude immediately the possibility that those state interventions might, depending on their links with one another and their effects, be regarded as a single intervention. According to the Court, the announcement of 4 December 2002 on redressing the operator's financial situation at the board of directors, cannot be disassociated from the shareholder loan in the form of a credit line of €9 billion, expressly mentioned in the announcement. What is more, the announcement was made the same day as the notification to the Commission of the shareholder loan. The Commission therefore felt, quite rightly, that the shareholder loan, announced and notified on 4 December 2002, had conferred an advantage upon FT “by enabling it to increase its means of financing and to reassure the market as to its capacity to meet its maturities”. Furthermore, it rightly felt that this advantage had been granted using state resources. While it is true that France Télécom did not sign the loan agreement sent to it, the company could nevertheless have signed it at any time, thereby acquiring the right to obtain immediate payment of the sum of €9 billion. That sum is therefore a potential burden for the state budget.
The Commission welcomed the ruling which clarifies the position of a state that intervenes in favour of a company that is also owned by the state concerning the rules of the EU on state aid. The case was referred to the General Court for a ruling on the arguments raised by France and France Télécom on which it has not yet delivered a verdict. (FG/transl.jl)