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EU Extends Probe Into Subsidies for Corsican Ferry Company
The European Commission Wednesday said it's extending its probe into the French state's restructuring plans for Corsican ferry company SNCM.
The decision follows changes made by the French authorities to their original restructure plan. The unprofitable ferry operator runs trips between Corsica and mainland France.
The commission said it will now include new subsidies granted to SNCM in its investigation, to check they are compatible with state aid rules.
The French state, through its 100% holding in Compagnie Generale Maritime et Financiere, or CGMF, has a 25% stake in SNCM.
The changes to the original restructure plan include CGMF's taking responsibility for EUR15.5 million in health insurance contributions for SNCM retirees, a EUR8.75 million participation in the ferry company's recapitilization and EUR38.5 million in redundancy payments to SNCM employees as part of a job reduction plan by its new owners.
SNCM has faced a slump in passenger traffic over the past 10 years on many of its traditional routes between Corsica and mainland France, largely due to competition from two private-sector rivals. Its fate has become a major political issue in France.
The French government last year orchestrated a rescue package under which the state injected EUR142.5 million in aid and cut its interest in the company to 25%. As part of the rescue plan, French financier Walter Butler acquired a 38% stake, while Veolia Environnment (VE) bought a 28% interest and became operator of SNCM's fleet.
The decision follows changes made by the French authorities to their original restructure plan. The unprofitable ferry operator runs trips between Corsica and mainland France.
The commission said it will now include new subsidies granted to SNCM in its investigation, to check they are compatible with state aid rules.
The French state, through its 100% holding in Compagnie Generale Maritime et Financiere, or CGMF, has a 25% stake in SNCM.
The changes to the original restructure plan include CGMF's taking responsibility for EUR15.5 million in health insurance contributions for SNCM retirees, a EUR8.75 million participation in the ferry company's recapitilization and EUR38.5 million in redundancy payments to SNCM employees as part of a job reduction plan by its new owners.
SNCM has faced a slump in passenger traffic over the past 10 years on many of its traditional routes between Corsica and mainland France, largely due to competition from two private-sector rivals. Its fate has become a major political issue in France.
The French government last year orchestrated a rescue package under which the state injected EUR142.5 million in aid and cut its interest in the company to 25%. As part of the rescue plan, French financier Walter Butler acquired a 38% stake, while Veolia Environnment (VE) bought a 28% interest and became operator of SNCM's fleet.
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