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Brussels, 12th October 2006

State aid: Commission opens an investigation into the proposed reform of the French Post Office workers’ pension fund

The European Commission has decided to open an in-depth investigation under the EC Treaty's state aid rules into a notified proposal to reform the financing of the pensions of public sector workers employed by the French Post Office (La Poste). It will examine in particular whether the reduction in La Poste's costs sought by the reform would not give La Poste an advantage over its competitors. The opening of an in-depth investigation enables interested third parties to submit their comments on the proposed measures but does not prejudge the outcome of the enquiry.

Neelie Kroes, Competition Commissioner, said: "I welcome structural reforms aimed at helping former monopolists adjust to a liberalised market. We must ensure, however, that they do not distort competition among operators."

The French authorities notified the reform of the method of financing the pensions of public sector workers employed by La Poste in June of this year.

The financing of such pensions, which affects around 61% of La Poste’s staff, is currently subject to exceptional arrangements. Unlike other French companies, including those employing public sector workers, La Poste does not pay any employer's contribution in discharge of its obligations. It is required by law, however, to ensure the financial equilibrium of the pension scheme of the public sector workers it employs. In view of the gradual rundown in public sector worker recruitment since 1990 and the demographic trend within the population concerned, this obligation has imposed a growing financial burden on La Poste. This burden has been capped since 1998, responsibility for the balance being assumed by the French State.

The reform

Under the reform, from 2007 onwards La Poste will, like other companies, pay an employer's contribution in discharge of its pension obligations towards the public sector workers it employs. The amount of the contribution will be calculated in such a way as to ensure parity between La Poste's compulsory wages-based social and tax charges and those borne by ordinary companies (in such areas as transport and banking) for the risks that are common to both private sector and public sector workers. The reform does not, however, mean any change in status for public sector workers employed by La Poste.

According to the French authorities, the reform does not involve any state aid since it merely compensates for the structural disadvantage imposed on La Poste by the existing legislation and ensures fair competition with other operators in a market undergoing liberalisation. However, after a preliminary examination, the Commission has been unable to reach a definitive position on the reform's compliance with the EC Treaty's state aid rules. The Commission will examine in particular whether the reduction in La Poste's costs brought about by the reform actually ensures fair competitive conditions.

This investigation is part of a series of enquiries opened by the Commission into similar reforms in other Member States concerning, for example, the public undertakings Tieliikelaitos in Finland (see IP/06/220) and OTE in Greece (see IP/06/133).

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