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EU appeals France Telecom state aid ruling
18 August 2010
The European Union has lost the latest stage in a battle with the French government over state aid to France Telecom
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France Telecom
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European Union
The European Commission is appealing a ruling by the Commission’s general court that state support offered to France Telecom cannot be considered illegal state aid. The court’s decision made void an earlier ruling by the Commission that it is illegal state aid.
In 2002, the French government pledged to give the company a €9 billion loan.
The Commission believes that even though the offer was not accepted by France Telecom, the proposal alone affected the thinking of ratings agencies and other financial market players over the company’s financial viability. The court has said that as there was never a real transfer of state resources, it cannot be considered state aid.
The French government and France Telecom have always denied any wrongdoing. One of France Telecom’s rivals, Bouygues Telecom, has also filed an appeal against the ruling. If it goes ahead, that appeal would be heard by a separate tribunal, the European Court of Justice. GTB