On 19 March 2013, the CJEU handed in its judgment in a State aid case involving France Télécom (“FT”). The facts of the case are as follows. FT, which was State-owned by 56.45% of its share capital, found itself in a dire financial situation in 2001-2002. On 12 July 2002, the French Minister of Economic Affairs mentioned in an interview that “…were France Telecom to encounter difficulties, we would take the appropriate measures…”. Subsequently, on 4 December 2002, the French State announced that it proposed to FT a loan of EUR 9 billion. The final offer for this loan was made on 20 December 2002. FT did not accept this offer.
The Commission decided that the State’s conduct breached Article 107(1). The key in the Commission’s reasoning was that it examined (i) the statement of 12 July 2002, (ii) the public announcement of 4 December 2002, and (iii) the proposal of 20 December 2002 as an inseparable entity. It considered that all of them together formed the measure that could be considered as State aid. The GC disagreed and annulled the Commission’s decision. In a 2010 judgment, it pointed out that the Commission should have examined measures (i), (ii), and (iii) separately. Individual assessment would have shown that none of the three constitutes aid because all of them lack one of the conditions of Article 107(1):
-- The Minister’s statement (measure (i)) and the announcement of the loan (measure (ii)) provided an advantage to FT but did not involve financing through State resources;
-- The proposal of the loan (measure (iii)) involved State resources, but did not grant any advantage, because it was justified under the Market Economy Investor Principle (“MEIP”).
The GC noted that in the case at hand, the advantage was not closely linked to a corresponding charge in the State budget or to the creation, on the basis of legally binding obligations entered into by the State, of a sufficiently real economic risk to that budget.
In its recent judgment, the CJEU quashed the GC’s ruling. It recalled that consecutive interventions could be inseparable from one another, in respect of their chronology, their purpose, and the circumstances of the beneficiary undertakings (§104). Moreover, the CJEU ruled that “contrary to what the [GC] found, it is not necessary that [the] reduction [in budget], or even such a risk, should correspond or be equivalent to that advantage, or that the advantage has as its counterpoint such a reduction or such a risk, or that it is of the same nature as the commitment of State resources from which it derives”. (§§109-110).
The CJEU’s judgment reflects the principle that, under Article 107(1), measures must be scrutinised on the basis of their effects (§102). But it also raises interesting questions:
-- Looking at a measure “in context” and taking into account prior public statements as inseparable could distract the application of MEIP tests. State action, even when similar to a private investor’s, often comes combined with pompous political discourse which could imply advantages even when they do not exist. Would that put at stake the practical application of the MEIP test?
-- By disconnecting the amount of advantage and the State resources which are used (or risk being used), difficult questions arise in relation to recovery. If the State recovers the amount of the advantage, while the impact on State resources was much lower, does this mean in practice that the State can make money out of the whole State aid procedure? In the case of FT the Commission did not order recovery, but it will be interesting to see how it will deal with this issue in future cases.