Brussels, 08/11/2007 (Agence Europe) - On Thursday 8 November, the European Commission announced that the compensation mechanism that France is planning for its fisherman faced with the surge in oil prices could constitute illegal state aid under Community law. The previous day, French Agriculture Minister Michel Barnier announced details of the government's aid measures.
With the information available to the Commission, the mechanism to compensate for the additional fuel costs could constitute “operating aid” and, as such, would be in breach of Community rules on state aid, in that it would help all enterprises, said the spokeswoman for European Fisheries Commissioner Joe Borg. According to the Commission, such aid is only possible in certain conditions, as part of a rescue or restructuring plan for companies in difficulty, she added. In addition, the Commission believes that the best way to act is not to subsidise, but to tackle the fundamental problems: this means restructuring the fishing sector. The French government wants to compensate fishing enterprises for the additional fuel costs they have to bear above an annual average of 30 cents per litre of fuel. Currently, fishermen are paying 50 cents per litre. Borg's spokeswoman said that it was not possible to talk about “additional costs”. “This is the cost of the fuel that has to be borne by all enterprises, no matter what they are,” she said.
Since March 2006, the Commission has been investigating similar aid - called “the Fund for the prevention of uncertainties in fisheries” - granted by France between November 2004 and December 2005 (worth €65 million). At this point, the Commission deems it not to be compatible with the common market. It could, therefore, order aid to be recovered from those to whom payments were made. (L.C.)