COMPUTING: COMMISSION TO TAKE FRANCE TO COURT OVER BULL BAIL-OUT LOAN.

The French Government granted the bail-out loan to Bull in June 2002. However, it only notified the Commission of this in November the same year, breaking EU rules on notification of anti-competitive state aid. The Commission decided to waive the aid nevertheless, on the grounds that it was a loan, rather than a grant, and was to be reimbursed by June 17. France had previously bailed out the manufacturer with Euro 1.7 billion in 1993, and according to state aid guidelines for rescuing and restructuring firms, this kind of aid should be granted only once. This is known as the oone time, last timeo condition.

Furthermore, the Commission should only approve further aid to the same company after a full ten years have elapsed. The EU's competition watchdog nevertheless approved the rescue package, saying it was "warranted on the grounds of serious social difficulties and it is limited to the amount needed to keep the firm in business for a six month period". Mr Monti indicated on June 24 that he was considering taking France to court to "make the point" that Member States cannot flout the rules. The Commission does not have any means to actually force France to recover the money, but officials point out that this is a "voluntary Community and we expect its members to play by the rules that they impose".

Need to save Bull?

If the Court of Justice rules that France must respect European rules on State aid and demand repayment of the loan, and should this prove to be beyond Bull's means, the European Commission would need to return before the Court to seek a fine or some other sanction against France... which might take years. Bull Chairman Pierre Bonelli has already warned that it the group fails to attract new shareholders, he will likely be left with no option other than to file for liquidation. Mr Bonelli told the general...