French Government promises assistance to SNCM

Genoa - The French State has made financial commitments for the purchase of four new ships, and issued a decree that imposes new rules on shipowners operating in French waters, which could include the obligation to fly the French flag: these are the promises with which French Minister of Transport Frédéric Cuvillier is attempting to resolve the maritime company SNCM’s problems Minister Cuvillier discussed the decree last Monday with CGT union representatives, and on Wednesday held another meeting with the workers’ representatives to bring an end to the strike that has paralysed SNCM since January 1st. Cuvillier said that the prospects for the end of the strike are good, since business is picking up, while CGT’s shipping representative, Frédéric Alpozzo, said he had “a rather positive feeling” about negotiations. Yesterday the unions informed the company’s employees about the results of last Wednesday’s meeting. Cuvillier says, “The government has taken responsibility for maintaining the company’s stability,” and will soon meet with the local administrations to “determine the form in which it intends to intervene “.

For the moment, Cuvillier has revealed that the Public Investment Bank (BPI France) and the French Deposits and Consignments Fund (CDC) will actively seek “financial solutions” for the acquisition of the four ships. The acquisition was called for by the bailout plan that the company’s shareholders signed in June, 2013, in other words by Veolia Transdev at 66%, the State at 25% and the employees at 9%. In turn, Veolia Transdev is half owned by the Veolia Group and half by CDC. Despite the fact that the French Union CGT insists that the request for State intervention will serve to protect SNCM from antitrust actions, the French government will have a hard time squaring the circle in this case. If Cuvillier must resolve the immediate problem of the strike now, he cannot forget that a solution must also be found on a European level, since the European Commission in Brussels has already asked SNCM to repay 440 million Euros of money it received as state aid.

Further protectionist measures for the French fleet could harm other companies, like Corsica Ferries, whose ships fly the Italian flag. And this could harm MOBY Line, as well. MOBY has just been sanctioned in Italy for violation of antitrust regulations, while in France it had attempted to operate on routes served by SNCM without success. Corsica Ferries directly benefited from the strike, since in recent days its cargo ferries have been busy saving Corsica’s export of clementines, which was threatened by the strike. But SNCM is in the middle of an appeals battle with the European Commission. Corsica Ferries C.E.O. Pierre Mattei said that he hopes the ruling now being prepared is in accordance with European regulations. Furthermore, he said that his company’s maritime employees who sail under Italian flags have contracts that respect French regulations.