EU – Baltic States, Integration, Markets and Companies

In particular, French authorities agreed that the loan agreements with manufacturers would not contain any condition regarding either the location of their activities or a preference for France-based suppliers. This letter was a result of repeated contacts between the Commission and the French authorities since the announcement of the French plan for aid to the automotive sector on 9 February this year.

The French government’s “extensive subsidies” had indirect negative consequences for assembling auto-plants in other EU member states (e.g. Slovakia), as car sales drastically reduced. Conflict between the Commission and French authorities aroused deep criticism among auto producers in the EU.

Following the announcement of the French plan for aid to the automotive sector, on 9 February 2009, the Commission has had regular discussions with the French authorities (see also MEMO/09/50).

Commission’s opinion

“I am satisfied with the guarantees set out by the French authorities on the absence of protectionist elements in the plan for aid to the automotive sector. This result shows the importance and the usefulness of a dialogue with the Commission at the planning stage of national aid plans. It was important for the Commission to remove all ambiguity in this case, as Europe must avoid a return to protectionism and its negative consequences for employment in Europe. I am particularly vigilant in this respect”.

Neelie Kroes, Commissioner for Competition, in MEMO/09/90, Brussels, 28 February 2009. 

As a consequence of negotiations, the French authorities have declared that the envisaged aid measures would not affect the freedom of manufacturers to develop their economic activities in the internal market, and in particular would not prevent the manufacturers from adapting their production to future market developments, by revising their strategic plans if necessary. The loan agreements to be concluded with the manufacturers will not contain any condition concerning either the location of their activities or the requirement to prioritise France-based suppliers.

The Commission promised to monitor closely the implementation of France’s promised measures.