1999/508/EC: Commission Decision of 14 October 1998 conditionally approving aid granted by France to Société Marseillaise de Crédit (notified under document number C(1998) 3210) (Only the French text is authentic) (Text with EEA relevance)

• Articles: 4

Article 1

The measures taken by France to support SMC, taking the form of capital increases of FRF 5868 million and a State guarantee of FRF 423 million, constitute State aid within the meaning of Article 92(1) of the Treaty. They are hereby declared compatible with the common market and with the EEA Agreement in accordance with Article 92(3)(c) of the Treaty and Article 61(3)(c) of the Agreement, subject to the conditions in Article 2. The aid hereby authorised is limited to FRF 6,3033 billion.

Article 2

1. France shall confirm that the company will fully implement the restructuring plan submitted to the Commission, including the reductions in activity proposed therein.

France shall submit to the Commission detailed six-monthly reports containing all the information the Commission needs to be able to verify that the restructuring plan is proceeding properly.

2. France shall ensure that SMC cannot carry forward for tax purposes the losses offset by the capital increases.

Article 3

Within two months of notification of this Decision France shall inform the Commission of the measures taken to comply with it.

Article 4

This Decision is addressed to the French Republic.

Done at Brussels, 14 October 1998.

For the Commission

Karel VAN MIERT

Member of the Commission

(1) OJ C 49, 19.2.1997, p. 10.

(2) OJ C 249, 8.8.1998, p. 11.

(3) Provisions for real-estate transactions amounted to a total value of FRF 555 million. (This includes FRF 320 million for the building in rue Auber in Paris alone. It should be pointed out that in 1990 a capital gain of FRF 570,5 million on real-estate promotion transactions involving the Paris branch enabled SMC to offset the current losses for the financial year with exceptional income of some FRF 400 million. However, at that time the speculative boom on the property market was at its peak.) Losses on swaps and a capital loss on reclassification of a block of long-term securities amounted to FRF 294 million. To this amount must be added FRF 191 million by way of backdated provisions for long-standing bad debts and FRF 240 million by way of provisions specific to 1994 for loans to SMEs.

(4) The total additional provisions recommended by the independent outside auditor amount to about FRF 2,2 billion, broken down as follows: lending portfolio, FRF 757 million; bad debts, FRF 368 million; subsidiaries, FRF 230; million social liabilities, FRF 416 million; real-estate assets or claims, FRF 227 million; other, FRF 245 million.

(5) ABN AMRO; Argentaria, Spain; Banco de Santander, Spain; Banque Chaix, Banque Nationale de Paris; BBV, Spain; BCH, Spain; Caisse d'Épargne Provence-Alpes-Corse; Carron & Cie (Korkmaz Yigit Holding, Turkey); Cie Financière Edmond de Rothschild; Crédit Agricole; Crédit Mutuel; Groupe Banques Populaires; La Caixa, Spain; San Paolo, Italy; and Société Générale.

(6) Banque Chaix, Banque Nationale de Paris, Caisse d'Épargne Provence-Alpes-Corse, and Société Générale.

(7) The Governor of the Banque de France also sent a letter, at the beginning of August 1997, which was outside the time properly allowed in these proceedings.

(8) See footnote 7.

(9) The entry of foreign banks into the French market is a relatively recent phenomenon; they reached 8 % of the whole in 1993, but fell back to 7,7 % in 1994.

(10) Point 403, p. 255. The Director-General for Competition had already informed the French authorities of the Commission's position, by letter of 14 July 1993.

(11) In order to determine whether injections of public money into an enterprise constitute State aid, the Commission applies the principle of the private investor in a market economy: see the Commission communication to the Member States (OJ C 307, 13.11.1993, p. 3).

(12) See Articles 179 and 180 of the French Law of 25 January 1985 on company recovery and compulsory winding up, Journal officiel de la République française, 26.1.1985.

(13) Judgment delivered on 13 January 1998.

(14) See in particular the Commission Decisions in Bull (OJ L 386, 31.12.1994, p. 1), Crédit Lyonnais (OJ L 308, 21.12.1995, p. 92), and Efim (OJ C 349, 29.12.1993, p. 2), and the judgment of the Court of Justice in Hytasa (Joined Cases C-278/92, C-279/92 and C-280/92 [1994] ECR I-4103).

(15) Always provided these are guarantees subscribed on commercial terms and do not constitute State aid measures.

(16) Some parts of this text have been edited so as not to disclose confidential information; those parts are contained in square brackets and asterisked.

(17) Some parts of this text have been edited so as not to disclose confidential information; those parts are contained in square brackets and asterisked.

(18) Some parts of this text have been edited so as not to disclose confidential information; those parts are contained in square brackets and asterisked.

(19) OJ C 368, 23.12.1994, p. 12.

(20) Some parts of this text have been edited so as not to disclose confidential information; those parts are contained in square brackets and asterisked.

(21) Some parts of this text have been edited so as not to disclose confidential information; those parts are contained in square brackets and asterisked.

(22) Some parts of this text have been edited so as not to disclose confidential information; those parts are contained in square brackets and asterisked.