When the European Commission gave the green light for the French Government to start its $769m recapitalisation of Compagnie des Machines Bull SA in July, it seemed the trouble was over. Apparently not, however. The government entered a demande recours with the European Court of Justice in Luxembourg on September 21, contesting the Commission’s use of the term state aid, when it approved the recapitalisation. According to the French business journal, Les Echos, minister of industry Dominique Strauss-Kahn stated We want it to be acknowledged that the action represented the normal behavior of a shareholder. At the time, the Commission justified its use of the term state aid, by referring to Bull’s financial situation – a $1,310m net loss for 1990 – when it was notified of the capital increase in April 1991. This, it said, made it difficult to imagine any private investor in the government’s place providing such a large cash injection. The article quotes an unnamed source at the ministry, who disputes that argument, saying, Shall we talk about [private] aid, such as when Siemens rescued Nixdorf, and where the situation was just as catastrophic? The action is in the written procedural phase, the court told Les Echos. Brussels has been notified of the request and the two parties now must address written documents to the court, repeating their respective arguments. An oral arguments phase will follow the depositions. Les Echos quotes the court as saying a verdict shouldn’t be expected before a year is out. A Bull spokesman confirmed that the deposition had been made, but had no further information as we went to press on what the effect of a verdict in France’s favour would be. The ministry may have made the court request because, as the article says, it does not want to accept the idea that any future capital injections might be prohibited – after all, France has a whole clutch of state-owned corporate basket-cases screaming for more cash.
