Brussels, 04/09/2014 (Agence Europe) - On Thursday 4 September, the Court of Justice of the EU upheld (related cases C-533/12 P and C-536/12 P) the decision returned by the General Court of the EU in September 2012 (T-565/08) partially cancelling the decision in which the European Commission approved, in 2008, various aid measures put in place by France in favour of the maritime company SNCM (see EUROPE 10686).
At the time, the Commission: - authorised a capital investment of €76 million (€53.48 million in the form of public service bonds and the remaining €22.52 million as aid for restructuring) granted to SNCM in 2002 by CGMF; - considered that the measures of the 2006 privatisation plan for SNCM (recapitalisation of SNCM at a negative price of €158 million, an additional capital investment by CGMF of €8.75 million and an advance on the current account in the amount of €38.5 million, aimed at financing a possible social plan) did not constitute state aid. The General Court partially cancelled this decision, on the grounds of several errors of assessment on the part of the Commission on both of these elements, a judgment which was appealed against by SNCM and France.
In its verdict, the Court of Justice rejected both appeals and upheld the verdict of the General Court, following the recommendations of the Advocate General (see EUROPE 10997). In particular, as regards: - the sale of SNCM at a negative price of €158 million, a point on which SNCM and France argued that the General Court had incorrectly applied the “market economy private investor test”, the Court found that the General Court had correctly determined the criteria necessary to identify the rational private investor with which the public undertaking in question (CGMF) had to be compared. Furthermore, the General Court was right to conclude that the Commission had failed to establish that the French state was motivated by a reasonable probability of obtaining a material benefit, even in the long term, from the transaction in question. - The capital contribution of €8.75 million by CGMF and private investors, the Court confirms that the General Court had correctly assessed the effects of the sale cancellation clause which was concluded at the time the capital contribution was made as part of the partial privatisation of SNCM. This led it to conclude, correctly, that the Commission should have conducted a thorough analysis of the economic impact of the sale cancellation clause. - Aid to individuals of €38.5 million, regarding which SNCM and France claim that the General Court should have ascertained whether the sum was justified in light of the private investor test. The Court found that SNCM and France had failed to demonstrate that the nature of the sum of €38.5 million was different from that of the sum of €158 million, so that the same conclusions apply in light of the private investor test.
SNCM, which is already struggling, will therefore have to pay the aid back (more than €200 million in total). Veolia, one of the main shareholders, is reported to be considering going into receivership.
Reacting to the verdict, the spokesperson to the European Commission for competition policy, Antoine Colombani, said that the Commission was “of course aware of the fact that having to pay back the incompatible aid will make SNCM's serious difficulties worse, but these are the consequences of France granting aid that was incompatible with the European rules”. He added that, at this stage, the aid has still not been recovered by France, even though it was obliged to do this by a Commission decision in November 2013.
The French authorities have also taken note of the Court's ruling. They state that they are in close discussions with the European Commission “to seek an outcome that will allow us to preserve territorial continuity and jobs, in full respect of the rules on competition law”. (FG)