The Commission has opened the formal investigation procedure against France regarding the unlimited state guarantee provided for La Poste. La Poste benefits from this guarantee because of its status as a legal entity governed by public law, equivalent to an EPIC. The guarantee enables La Poste to obtain finance on favourable terms. Because its competitors do not enjoy the same advantage, the guarantee is likely to distort competition to an extent detrimental to the common interest, at a time when the postal sector is in the process of being liberalised. Initiating the procedure gives interested parties the opportunity to comment on the proposed measures, but does not in any way prejudge the outcome.

Under EU rules on existing state aid schemes, the Commission had recommended that France withdraw the unlimited state guarantee for La Poste by the end of 2008.

However, the subsequent negotiations with France did not convince the Commission that the French proposals amounted to terminating La Poste's guarantee.

According to the information available, the guarantee is unlimited in terms of duration and amount and is provided free of charge. Moreover, it covers both universal service activities and commercial activities.

In accordance with its Notice on the application of Articles 87 and 88 of the EC Treaty to State aid in the form of guarantees (OJ C 71, 11.03.2000), the Commission concludes that this guarantee enables La Poste to secure better financial terms for a loan than it would otherwise have obtained. Given that La Poste's competitors do not enjoy the advantage of such aid, there is a distortion of competition on the postal markets, which are in the process of being liberalised. Fair competition in the postal markets is in the interests of all postal service users, businesses and individuals, to ensure that they have access to the services of the most competitive operators.

The Commission is not disputing the public ownership of La Poste, nor is it contesting its status as a legal entity governed by public law as such, but the EC competition rules must be applied equally to private and public enterprises. In this case the guarantee is not the result of public ownership but of the company's legal status. [23 October 07]