ANNOUNCEMENT 22 Apr 2009In April 2009, the government of France announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
the letter from the European Commission to France - Brussels, 8 May 2009 C(2009) 3835 final. < http://ec.europa.eu/competition/state_aid/cases/231081/231081_1014474_46_1.pdf >
On 22 April 2009 the French authorities contacted the European Commission regarding their intention to inject a total amount of EUR 5 billion to the new merger of Caisse d'Epargne and Banque Populaire.
The CE group(Caisse d'Epargne) employs 51 700 people and has a balance sheet of EUR 650 billion, whereas the BP group (Banque Populaire) employs 44 450 people and has a balance sheet of EUR 263 billion.
On 8 October 2009 the CE and BP groups were merged and a common parent company was created but the plan is to dissolve the parent companies in the long term.
The Comission gave the following assessment:
"The characteristics of the notified additional capital injection into the entity to be created by the merger of the CE and BP groups are the same as those of the scheme to inject capital into the French banking groups which was approved by the Commission decisions of 8 December 2008, 28 January 2009 and 16 March 2009.
The only difference is that, this time, the preference shares are convertible into ordinary shares. This does not mean that the measure no longer fulfils one of the four cumulative conditions making it classifiable as aid. Allocating preference shares convertible into ordinary shares to the State in exchange for the notified aid measure has no bearing on this additional State intervention - for the reasons given in recitals 76 to 79 of the Commission Decision of 8 December 2008 and in recital 30 of the Decision of 8 January 2009 - still confers on the new entity a significant financial advantage which is of a selective nature, financed by public resources and has the potential to distort competition and affect trade between Member States." (par. 24-25 of the letter from the European Commission to France - Brussels, 8 May 2009 C(2009) 3835 final).
The Commission therefore considers that the notified measure constitutes a State aid measure within the meaning of Article 87(1) of the EC Treaty. It considers that the notified measure is compatible with the common market in accordance with the derogation provided for in Article 87(3) (b) of the EC Treaty under the condition that the implementation is carried out within nine months of the date of the decision.
A state measure in the GTA database is assessed solely in terms of theextent to which its implementation affects the extent of discriminationagainst foreign commercial interests. On this metric, the state aidproposed here is discriminatory.