Brussels, 20/07/2004 (Agence Europe) - On Tuesday the Commission finally decided to ask the French state to pay back aid that was incompatible with European competition law. Discussions with Commissioner have allowed for a conclusion on the three dimensions to the affair, which set the Commission and the French operator against each other.
In the exemption system for business tax to which France Télécom was subject between 1994-2002, the Commission concluded the existence of incompatible aid and is asking for it to be paid back. In its press statement the Commission estimated the amount at between €800 million and €1.1 billion. This also includes a tax band that is acceptable to the French authorities, and certain Commissioners defended the amount stipulated by Commissioner Monti.
In addition the shareholder's advance made available to the operator in December 2002 contains aid components. The Commission's analysis attempts to assess the impact of this credit line by combining it with a series of government declarations that preceded them, notably during the time of Francis Mer. Although the Commission points out that without this range of elements the markets' confidence in the company would not have been restored, it does so sparingly in its press statement and that the case is new and that it will not order recovery of the aid and does not describe this aspect of the affair as illegal state aid. “This decision shows that to be effective and fair the monitoring of state aid must cover all the different - and in some cases highly imaginative - arrangements used by states to support firms by providing aid that is incompatible with the European competition rules,” said Mario Monti, to journalist. France Télécom said that it would have gone to the Court of Justice if it had got a negative decision.