Europese Commissie eist dat France Telecom 1,1 miljard euro belastingvoordeel terugstort (en)

Brussels finds itself on another collision course with Paris after it ruled yesterday that France Telecom must repay up to 1.1 billion euros gained in illegal state aid.

After a year-long investigation, the Commission decided that the company must pay back between 800 million euro and 1.1 billion euro in taxes on which it was granted breaks by the French government between 1994 and 2002.

These tax breaks were intended to help out the company, which had run up huge debts while bidding for licences to run third generation mobile technology, but constitute illegal state aid, Brussels decided.

After interest, the actual amount owed by France Telecom could be as much as 1.7 billion euro according to Spanish paper Cinco Dias and would be one of the highest repayment demands ever issued by the European authorities.

Competition commissioner Mario Monti said that the decision was "an important step forward in giving coherence and completeness to state aid in the EU".

Battle rejoined

But the ruling will again bring Brussels into conflict with French authorities, which immediately expressed regret at the judgement, saying it would use "all appeal possibilities", according to Reuters France.

The judgement comes after a long battle over engineering giant Alstom, which resulted in a compromise solution.

And France Telecom itself also vowed to appeal against the ruling, describing it as "without economic or legal foundation".

However, the company was spared nine billion granted by the French government to bail out France Telecom during a financial crisis suffered by the company in 2003.