Brussels, 23/10/2007 (Agence Europe) - On 23 October 2007, the European Commission opened a formal investigation procedure against France regarding the unlimited state guarantee provided for La Poste (the French post office). La Poste benefits from this guarantee because of its status as a legal entity governed by public law. The guarantee enables La Poste to obtain finance on favourable terms but because its competitors do not enjoy the same advantage, the guarantee is likely to distort competition to an extent that would be detrimental to the common interest at a time when the postal sector is in the process of being liberalised.
Under EU rules on existing state aid schemes, the Commission had recommended that France withdraw the unlimited state guarantee for La Poste by the end of 2008, but the subsequent negotiations with France did not convince the Commission that the French proposals actually amounted to terminating La Poste's guarantee. According to the information available, the guarantee is unlimited in duration and the amount and is provided free of charge. Moreover, it covers both universal service activities and commercial activities.
The Commission does not dispute public ownership of La Poste, nor is it challenging its status as a legal entity governed by public law, but the EC competition rules must be applied equally to private and public enterprises. In this case the guarantee is not the result of public ownership but of the company's legal status. (C.D.)