Commission warning over rail aid

The European Commission has warned four member states that the financing arrangements for their rail companies are unlikely to be compatible with EU state-aid rules.

A spokesperson for Joaquín Almunia, the European commissioner for competition, said that letters had been sent to France, Portugal, Italy and the UK. She said that the Commission had reason to believe that rail operators in these countries benefit from an unlimited state guarantee, which is not allowed under EU law.

The letters were sent confidentially to member states in February. The Commission wants the countries either to provide conclusive evidence that these unlimited guarantees do not exist, or to change their laws, before 22 July. The Commission’s concerns are based on guidelines adopted in April 2008.

The French government said on Monday (31 May) that it “did not share” the Commission’s opinion that its national railway, the SNCF, had an unlimited guarantee. It said that the SNCF’s legal statute of a “public industrial and commercial establishment” (EPIC) was fully in line with EU law.

ECJ complaint

France has filed a complaint with the European Court of Justice against a previous finding by the Commission, in 2007, that La Poste, its national postal service, benefited from an unlimited state guarantee. The Commission dropped its investigation in January after the French government agreed to convert La Poste from an EPIC into a limited company. The French government hopes to use the case to prove that EPICs are in line with competition rules.

Almunia’s spokesperson said that the Commission was “not requesting a change in the statute [of the SNCF], but simply the abolition of the unlimited guarantee”. She said that the Commission would evaluate the situation after 22 July, and that it would use infringement proceedings against member states that are in clear breach of competition rules.

The issue is being pursued by the Commission’s competition department, which took over the policing of transport state aid in February. This responsibility was previously assigned to the transport department.