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The European Commission has opened an in-depth investigation to verify whether six restructuring measures in favour of the Greek state-owned railway company TRAINOSE are in line with EU state aid rules. At this stage, the Commission considers that Greece has not demonstrated that the measures are either free of aid or can be found compatible with EU state aid rules. The opening of an in-depth investigation allows interested third parties to comment on the proposed measures. It does not prejudge the outcome of the investigation.
In February 2011, Greece notified six measures in favour of TRAINOSE, a provider of railway transport services active in both national and international transport of passengers as well as freight.
The company has been facing financial difficulties for several years with the result that the State has had to make up for its losses. The restoration of its viability through a restructuring plan, and privatisation by the end of 2011, is part of the measures agreed between Greece and the EU and IMF as part of the financial assistance programme.
The measures amount to approximately 1.2 billion euros and include debt write-offs, asset and employee transfers, a capital increase, compensation for the discharge of the company’s public service obligations and the establishment of service level agreements with OSE, the railway infrastructure manager.
The measures support a restructuring plan aimed at returning the company to viability through a payroll decrease and provide for public service compensations for a number of lines, the suspension of certain lines and an increase in ticket prices.
On the basis of the information provided by Greece so far, it is doubtful that the proposed measures procure no undue selective advantage to TRAINOSE.
The Commission will now investigate whether one or more of the proposed measures involve state aid in favour of TRAINOSE and if this is the case, whether they can be found compatible with the Internal Market, in accordance with the common EU criteria. The investigation is without prejudice to a government’s right to compensate a company for the net costs of public-service obligations conferred on it.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
