EU to demand repayment of rescue aid to Bull

The European Commission is about to write to the French government, asking it to explain why rescue aid for its troubled computer firm Bull SA appears not yet to have been repaid, an official said Tuesday.

Last November the Commission allowed France to inject 450 million euros into Bull to help the firm stave off bankruptcy, on condition that the money was paid back to the government by June 17 this year. The Commission regulates state aid to companies to make sure the aid doesn’t affect competition in the market.

The Union’s executive body has heard informally from Bull that the money hasn’t yet been repaid, but so far the French government hasn’t commented on the matter.

“We will decide what to do once we have heard from the French government,” said Commission spokesman Tilman Lueder, adding that if the aid hasn’t been repaid then “we will have to decide what to do. We could take France directly to the Court of Justice.”

The Commission decision last November to allow rescue aid for Bull was “exceptional,” Lueder said. It was granted less than ten years after the Commission approved a restructuring plan for Bull that envisaged a ten-year plan to return the firm to profitability.

“It was an exceptional situation so we allowed the rescue aid, but the conditions for repayment of the money were supposed to be strictly applied,” Lueder said.

The French government wants Bull to complete its restructuring before it pays back the rescue aid, according to people close to the French government.