Brussels, 30/10/2013 (Agence Europe) - The SNCM saga is continuing at the European Court of Justice where, on Wednesday 30 October, representatives of the ferry company, Société Nationale Maritime Corse-Méditerranée (SNCM), and the French state argued their case against the ruling of the European General Court on 11 September 2012 annulling the European Commission's 2008 decision to authorise restructuring aid and recapitalisation of the ferry company by the French state.
In the decision, the Commission said that the €76 million in capital from public company CGMF for SNCM, in 2002 (€53.48 million to pay for public service obligations and €22.52 million as restructuring aid), along with capitalisation of the company as part of its 2006 privatisation plan (recapitalisation of €158 million, along with aid from CGMF of €8.75 million and a cash advance of €38.5 million to finance a potential social plan introduced by the buyers) was compatible with EU state aid rules. SNCM's main rival, Corsica Ferries, appealed to the European Court of First Instance (since renamed the General Court), which annulled the Commission's decision in September 2012, arguing that the Commission had committed manifest errors of judgment (see EUROPE 10686). The French state and SNCM then lodged a case to demand annulment of this ruling.
The French state and SNCM challenged the ruling in court on four counts. 1) For ruling that the Commission had made an error in saying that the sale of SNCM for a negative price of €158 million did not amount to state aid. France and the SNCM say the European Court of First Instance was wrong to say that the Commission could not take account of the danger of damaging the image of the state as an economic player in the private sector when examining what a private investor would have done, in the Commission's assessment of whether the payment of additional redundancy payments to SNCM staff in the event of the company going bankrupt liquidation is what a private investor would have done. The Court of First Instance could not demand from the Commission proof that the payment of additional redundancy payments was a sufficiently established practice or even a constant practice by private companies. 2) For considering that, when it made the decision, the Commission did not take account of all the relevant elements in its analysis of the comparability of the capital provision of €8.75 million from SNCM's public shareholder with the capital provision of €26.25 million made by the private purchasers, and that it should have taken account of the sale avoidance clause granted to the private purchasers as part of the SNCM privatisation. 3) For qualifying as state aid, aid for individuals totalling €38.5 million (see above) without verifying whether the aid passed the private investor test, as the Commission argued in its decision and the French government in the heading. 4) For believing that the Commission committed a manifest error of judgment when it approved the remainder of the restructuring under the state aid rules and guidelines for regional industrial or regional development (Art. 107, paragraph 3c, of the EU treaty). The court's ruling is expected in the next few months.
Along with the aid measures for SNCM for 2002 to 2006 that the Commission approved, the Commission issued a decision in May 2013 (see EUROPE 10839), that the company, which is in serious financial difficulty, must repay some €220 million of state aid received for extra ferry services in the high tourist season from 2007 to 2013. On 29 August the European General Court rejected the request by the French government for a stay of proceedings for the decision, saying that there was no urgent need to do so (see EUROPE 10912). (FG/transl.fl)