Brussels, 23 February 2011
State aid: the Commission approves France's scheme to support supplementary social welfare cover for local government staff
The European Commission has ruled that the scheme to support supplementary welfare cover for local government staff put forward by France is compatible with EU Treaty rules on state aid in view of its social character.
"This decision demonstrates that it is possible to have aid of a social character which is compatible with the Treaty rules providing it benefits individuals and not specific undertakings", noted Joaquín Almunia, Vice-President of the Commission and Commissioner for Competition.
The draft scheme notified by France involves local government institutions and local‑government-managed bodies contributing to the funding of supplementary social welfare cover for their staff. Under the scheme, local government institutions and local-government-managed bodies will be able to pay staff and retired staff members an allowance if they take out insurance contracts and packages which have been approved by the Oversight Authority or if they sign up to supplementary welfare arrangements established between the local government body and an insurance undertaking after a competitive tender procedure. Both selection processes will be open to any type of insurance undertaking with which staff will be able to take out a contract or join an arrangement for supplementary welfare cover. The allowance provided by local government institutions and local‑government‑managed bodies, in the form of a single annual payment per staff member, will either be paid directly to staff or to the insurance undertaking, which will have to deduct the amount in full from the fee or premium payable by the staff members covered by them.
Article 107(2)(a) of the Treaty on the Functioning of the European Union permits aid of a social character, providing that it is granted to individuals on the basis of conditions where there is no discrimination related to the origin of the products or services concerned.
The Commission was of the opinion that the scheme under consideration is compatible with the internal market in view of the social character of the aid measure concerned, which will be paid to staff in full. The conditions laid down for the selection of the undertakings are objective, transparent, non-discriminatory and allow for the development of competition among the various players in the market concerned.
The total allowance to be paid by local government institutions and local‑government-managed bodies to their staff is approximately €56.7 million per year, which corresponds to an average of €42 per staff member per year over the six-year duration of the scheme.
The non-confidential version of the decision will be made available under case number N 495/2010 in the State aid register on the DG Competition website once any confidentiality issues have been resolved. The electronic newsletter State Aid Weekly e-News lists the most recent decisions on state aid published in the Official Journal and on the website.