State aid: Commission approves restructuring aid to Greek railway companies OSE and TRAINOSE

 The European Commission has concluded that Greek measures to support the restructuring of OSE, the national rail infrastructure manager, and TRAINOSE, the passenger and freight rail transport operator, are in line with EU state aid rules.

Commissioner Margrethe Vestager, in charge of competition policy, said: “The measures will help the two public rail companies become more efficient and provide better service to Greek passengers and business customers. This fits into the wider context of Greece's efforts to restore its economy's competitiveness and achieve significant growth. The aid will also facilitate the future privatisation of the companies and the opening of the Greek railway sector to competition."

OSE S.A. manages the national Greek railway infrastructure and is currently fully-state owned. TRAINOSE S.A., also fully owned by the Greek state, was spun-off from OSE in 2008 and is the sole provider of passenger and freight services in Greece. Both companies have been facing financial difficulties for several years. The ongoing macroeconomic recovery programme for Greece advocates the restructuring of the companies due to their importance to the Greek economy.

In this context, Greece notified to the Commission several support measures in favour of OSE and TRAINOSE in 2011. The aim of the measures is to ensure the viability of the companies and ensure that rail services continue operating, thus avoiding a serious disturbance of the Greek economy.

Concerning OSE, the Commission's investigation found in particularthat:

  • The measures to support the restructuring through (i) a debt cancellation of €14.3 billion, (ii) the transfer of 757 infrastructure management employees and (iii) the annual grants implemented after 22 October 2014 do not constitute state aid. This is because these measures relate to OSE's activities as the national rail infrastructure manager and as such cannot distort competition or affect trade between Member States.
  • The transfer of 217 maintenance employees and the annual grants of up to €340 million implemented before 22 October 2014 are in line with EU state aid rules.

Concerning TRAINOSE, the Commission concluded that the measures in its favour (in particular a debt cancellation, an equity increase and annual grants), worth a total of €1079 million, are also in line with EU state aid rules.

For the aid measures to OSE and TRAINOSE that the Commission found to be in line with EU state aid rules, the Commission took into particular account the difficulties the Greek railway sector is facing and the importance of a well-functioning railway service for the population. The measures have the legitimate objective of avoiding a serious disturbance of the Greek economy, without unduly distorting competition in the Single Market.

 

Background

In July 2011, the Commission opened a formal investigation into the measures in favour of TRAINOSE. It also looked into support measures to OSE, without opening a formal investigation.

According to Article 107 (3) b) of the Treaty on the Functioning of the EU (TFEU)"The following may be considered to be compatible with the internal market: (…) aid (…) to remedy a serious disturbance in the economy of a Member State; (…)".

The Commission's approval of the support measures to TRAINOSE and OSE relates directly to the Greek privatisation programme. In particular, the TRAINOSE decision is a prerequisite for the implementation by Greece of its obligations under the Memorandum of Understanding. This privatisation is expected to support the opening of the Greek railway market to competition and to have a positive impact on the quality of transport services.

The Commission has also taken today a decision finding that Bulgarian support measures in favour of the publicly-owned railway incumbent BDZ are in line with EU state aid rules.

Both the decisions concerning OSE and TRAINOSE and the decision on the Bulgarian support measures in favour of BDZ show that state aid control is able to address the problematic issues around debt levels that some incumbent rail operators are carrying. State aid rules allow Member States to help these companies avoid serious financial difficulties or having to significantly reduce staff, while easing the transition to an open and competitive rail market to the benefit of consumers and taxpayers alike.

The non-confidential version of today's decisions will be made available under the case number SA.32543for OSE and SA.32544 for TRAINOSE in the State Aid Register on the Commission's Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News

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