SHIPPING: COMMISSION BACKS AID FOR JOBS BUT PROBES AID TO FERRY COMPANIES.

Summary: Formal investigations into French aid to the publicly-owned Brittany Ferries and Corsica Marittima ferry companies have begun, the European Commission confirmed on December 9. The EU executive also gave its stamp of approval to three incentive schemes (two French and one Irish) which encourage shipowners to base operations in the European Union and to employ EU seafarers.

In the case of Brittany Ferries, the Commission had already started proceedings in January, but has now decided to extend its investigation to include a further capital injection of FF 80 million planned by the French Government. With Corsica Marittima, which is active on routes between France and Italy, the Commission is examining business relations with its parent company, SNCM, which is also state-owned and receives government aid for supplying a publicly prescribed service between Corsica and mainland France. The Commission's investigation concerns the losses (FF 40 million) incurred by the company since it started trading in 1990 and the terms governing the way in which ships are leased to the company, under very favourable conditions by its parent company. The Commission will determine which advantages to these companies amount to state aid and to what extent if at all - they are justified. The Commission found that four incentive schemes (two French and two Irish), which waived social security contributions from seamen, amounted to state aid. However, with the exception of one Irish scheme, they could be allowed on...