State intervention is a long-standing tradition in France. EU state aid control rules apply to avoid any undue distortion of competition. The European Commission has exclusive powers to examine the compatibility of state aid with the internal market. National courts have a distinct but complementary role to safeguard subjective rights of third parties affected by the granting of aid that does not comply with the EU procedure. This article reviews the granting of state aid in France and the French courts' state aid enforcement and procedure.
- National state aid granting and control
- National procedural rules
- Role of national courts
Referenced in this article
- Galerie de Lisieux v Caisse organic de recouvrement
- Etablissements J Richard Ducros v Société Métallique Finsider Sud
- Commission v France (Scott)
- Scott SA and Kimberly Clark SAS v Ville d'Orléans
- SFEI v La Poste ao
- Syndicat national de l'industrie des viandes ao
- Commune de Paulhac
- CELF cases
- SFEI v La Poste ao
- Groupe Salmon Arc-en-ciel
- Deutsche Lufthansa
State intervention in France is common and has resulted in various state aid cases. France has a long-standing tradition of state intervention, and the state regularly intervenes as a provider of subsidies, an investor, a lender, a guarantor and a creditor.
With this experience in state aid, French state organs are familiar with the procedures associated with notifiable aid measures; however, there is still the risk of breaches of state aid rules, and some cases do arise. The French courts are also increasingly aware of their duties and obligations with regard to unlawful non-notified aid.
National state aid granting and control: competent authorities
Authorities in charge of state aid oversight
In France, there is no single person who represents the state in respect of its aid policy in cases or with regard to policy issues with the European Commission (the Commission). All relations with the European Union must go through the Permanent Representation of France to the European Union based in Brussels.
The General Secretariat for European Affairs (SGAE), a department attached to the prime minister's office, centralises all issues that arise in relations with European institutions. It ensures the unity and consistency of any French positions submitted within the European Union. One of its 18 operational offices is responsible for competition and state aid. All state issues and aid notifications are coordinated by the SGAE.
The General Commission for Territorial Equality organises working groups, bringing together ministries, representatives of regional prefects and representatives of local authorities. It harmonises ministerial and local practices to detect the risks of measures being classified as state aid.
The Treasury (also known as 'Bercy' or the Ministry of the Economy and Finance) is generally involved in all state aid matters, in particular with regard to the financial impact these matters have on the state budget. The Inter-Ministerial Committee on Industrial Restructuring, a department of the Ministry, is also often involved in state aid matters relating to rescue or restructuring aid. This organ aims to assist undertakings in difficulty and to develop remedies to ensure the restructuring of those undertakings and, if appropriate, their long-term viability. These measures may give rise to various state aid procedures.
The Ministry of the Economy and Finance usually cooperates and exchanges information with the local authorities or other public bodies (ie, social security institutions), with coordination by the SGAE.
The State Shareholdings Agency (APE) is also involved in state aid measures concerning undertakings in which the French state holds shareholdings or is likely to enter its capital following state aid recapitalisation measures.
The sub-directorate for EU law and international economic law (a team of specialist agents for EU litigation matters) of the Legal Directorate of the Ministry for Europe and Foreign Affairs handles France's representation before the EU courts. This sub-directorate liaises with the SGAE and the relevant ministries, in particular the Ministry of the Economy and Finance. As such, it has a responsibility to draft government briefs and written observations for the EU courts and to plead before them.
Unlike French courts, the French Competition Authority is not competent to apply state aid rules, except for during consultation on competition issues that the legislature or the government can request under Article L462-1 of the French Code of Commerce. Its recommendations help the legislature and the government comply with EU state aid rules.
Council of State in the compliance and implementation of EU law
The Council of State is a special adviser to the government with regard to its legislative and regulatory action. In this advisory role, the Council of State is seized of bills before they are passed by the Council of Ministers. It also has jurisdiction over draft orders, as well as the most important draft decrees, which are referred to as 'decrees of the Council of State'.
The government may refer a matter to the Council of State for an opinion on any other regulatory text or particular legal issue. Since the 2008 constitutional reform, the president of the National Assembly or the Senate may also refer any bill submitted to either of the two parliamentary assemblies to the Council of State for an opinion before the text is examined in the committee. It also has an important role as a filter in the priority ruling on the issue of constitutionality.
Through this specific advisory competence, the Council of State possesses the means to have a key role in avoiding any violation by the French state of EU state aid rules through a kind of national ex ante state aid control, even though it does not have a binding advisory role in most cases.
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Originally published by GCR
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