Brussels, 02/05/2013 (Agence Europe) - On Thursday 2 May, the European Commission ordered the repayment of €220 million in state aid by Société Nationale Corse-Méditerranée (SNCM) on the grounds that the aid from France breaches EU competition rules. Tough news for the struggling ferry company.
The Commission recently concluded an in-depth investigation following a complaint by SNCM's main competitor, Italy's Corsica Ferries. The Commission concluded 1) that public service compensation which Société Nationale Corse-Méditerranée (SNCM) and Compagnie Maritime de Navigation (CMN) have been receiving since 1 July 2007 for “basic” shipping services between Corsica and Marseilles to ensure territorial continuity is in line with EU rules on state aid applicable to public services - subsidies are legitimate for covering the cost of providing a public ferry service to Corsica as a public service to help reduce the disadvantages of Corsica's being separated from the mainland; 2) however, the aid received by SNCM for an “additional service” to cover peak periods during the holiday season does not compensate a real public service need and gives SNCM a competitive advantage. The Commission's investigation said that unjustified aid of €220 million was therefore provided for 2007-2013 and it must now be repaid to the French state (the region of Corsica) within four months (by the end of August).
The Commission is also examining a series of aid measures totalling €230 million for restructuring and privatising SNCM from 2002 to 2006. Here too, it may decide to demand that some or all of the aid is returned. The SNCM management board will appeal against the decision and the French government may also decide to appeal against it. (LC/transl.fl)