France rejects EU demands to privatise SNCF

FRANCE has refused to comply with a demand from the European Commission (EC) that the SNCF railway relinquish its state-owned status to become a private limited company.

"The EC considers that such a status [state operator] implies an unlimited financial guarantee on its debts and that runs contrary to European competition regulations," the French Ministry of Transport said in a statement, reported London's International Freighting Weekly.

France had recently indicated to the commission that it "did not share this point of view, and had referred the matter to the EU Tribunal to confirm the legal basis of its arguments," said the statement.

Said French Transport Minister Dominique Bussereau: "It's out of the question that SNCF's public enterprise status, which does not confer on it any competitive advantage, be modified."

In July 2008, within the framework of the liberalisation of rail transport, the EC laid down the principles governing state aid to the sector, which made provision for unlimited state guarantees to be removed within a period of two years, the report noted.

The deadline is next month, a spokesman for Competition Commissioner Joaquin Almunia's office said.

"If these guarantees have not been adjusted by this date, then we'd have to consider what action to take based on the explanations supplied by the French authorities," the spokesman said.

He added that two or three EU states were currently the object of the EC's attentions in this area, without specifying which.
(Source:www.schednet.com)