FT told to repay tax breaks

21 Jul 2004

The long-running battle between the French government and the EU over state financial aid granted to France Télécom (FT) between 1994 and 2002 edged closer to a resolution yesterday after Brussels ordered the operator to repay the state up to EUR1.1 billion plus interest. According to EU Competition Commissioner Mario Monti, the exemption from business tax which FT enjoyed over the nine-year period constituted aid that was incompatible with the EC Treaty. Mr Monti said ‘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’. The exact amount FT must repay will be determined by the Commission during the recovery procedure.

France, Orange Group