France Telecom stuck with €1bn aid bill by Euro court France Telecom has been hit for €1bn, after the European Court of First Instance rejected its appeal against a ruling that it enjoyed eight years of unfair tax breaks from the French government. The European Commission ruled five years ago the the French incumbent enjoyed illicit state aid - in the form of business tax breaks …
Coincidentally these tax breaks left French Telecom enough money to buy and destroy the best UK mobile operator. Now looks like those subscribers will now be expected to pay part of the billion euro bill (with a help from even more luckless T-Mobile customers).
That's the problem when the intended competitors to the old monolithic state minded landline telecoms are allowed to takeover, emasculate and suck dry ...
Pity the British Government would take a few lessons and try and protect a few British Jobs instead of letting them all slip away......
Vote for a new way! Vote Lib Dem for a coalition government and share the power and maybe some of the wealth.
It is of public record that France Telecom has regularly contributed "voluntarily" to state coffers in the past. The setup used to be as follows :
- FT has monopoly over national comms and sets prices with great freedom
- This generates billions in revenue for FT, which does not lower prices, citing investment provisions
- State exempts FT of taxes more or less
- Whenever the State requires a windfall, it takes it from FT coffers with a smile
So really, FT has always been the fat pig propping up the French treasury. I fail to see why this fine is relevant. It was just how we were doing business at the time.
Well it kind of is important. If FT pay less taxes or receive cheaper funding through the government than others can get then they're getting an unfair competitive advantage. Hence EU governments being required to divest their holdings in PTTs in the early 90's.
Even worse, they then use their ill-gotten gains to expand abroad and compete with telcos in other countries who are playing (largely) by the rules.
If the British government had bankrolled Rover and Rover then started selling cars in France at a price that PSA or Renault couldn't compete with I'm sure there would have been some eyebrows raised. This is exactly the same.
Great and about time too.
When are EDF, GDF, Air France, etc going to get scrutinised then? EDF in particular was able to invest in and eventually buy several private companies across the EU while still being supported by the French state. Meanwhile the French were very keen to keep foreign investment in their companies to a minimum. Protectionsim at it's worst....
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