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Commission approves German measures worth over €2.5 billion to support rail freight and passenger operators affected by the coronavirus outbreak

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The European Commission has approved, under EU state aid rules, two German schemes supporting the rail freight sector and the long-distance rail passenger sector in the context of the coronavirus outbreak.

Executive Vice President Margrethe Vestager, in charge of competition policy, said: “The measures approved today will help rail freight and passenger operators in Germany weather the difficult situation caused by the coronavirus outbreak. The measures will contribute to maintaining the competitiveness of rail compared to other modes of transport, in line with the objectives of the European Green Deal. We continue working with all member states to ensure that national support measures can be put in place as quickly and effectively as possible, in line with EU rules.”

The two schemes will ensure increased public support to further encourage the shift of freight and passenger traffic from road to rail.

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Support under the schemes will take the form of a reduction of the charges paid by railway companies to access rail infrastructure in both the rail freight and the long-distance rail passenger sectors. The measures will thereby help prevent the loss of market shares of rail transport vis-à-vis competing modes of transport.   

The first measure, which has an estimated budget of €2.1 billion, will relieve long-distance rail passenger operators of approximately 98% of the infrastructure charges paid during the period from 1 March 2020 to 31 May 2022.

The second measure amends an existing aid scheme of 2018 supporting rail freight operators in Germany. With an estimated budget of €410 million, the amendment increases the support approximately 98% of the infrastructure charges paid by rail freight operators during the period from 1 March 2020 to 31 May 2021. The measure follows a similar budget increase for the period from 1 June to 31 December 2021, approved by the Commission last May.  

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The Commission found that the measures are beneficial for the environment and for mobility as they support rail transport, which is less polluting than road transport, while also decreasing road congestion. The Commission also found that the measures are proportionate and necessary to achieve the objective pursued, namely to support the modal shift from road to rail whilst not leading to undue competition distortions.

Finally, the reduction of infrastructure charges is in line with Regulation (EU) 2020/1429. This Regulation allows and encourages member states to temporarily authorise the reduction, waiver or deferral of charges for accessing rail infrastructure below direct costs.

As a result, the Commission concluded that the measures comply with EU State aid rules, in particular the 2008 Commission Guidelines on State aid for railway undertakings (“the Railway Guidelines”).

Background

The Railway Guidelines clarify the rules set out in EU treaties for the public funding of railway companies and provide guidance on the compatibility of State aid for railway companies with the EU treaties.

The non-confidential version of the decision will be made available under the case number SA.63635 in the state aid case 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 Competition Weekly e-News.

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Commission approves €1.8 million Latvian scheme to support cattle farmers affected by the coronavirus outbreak

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The European Commission has approved a €1.8 million Latvian scheme to support farmers active in the cattle-breeding sector affected by the coronavirus outbreak. The scheme was approved under the State Aid Temporary Framework. Under the scheme, the aid will take the form of direct grants. The measure aims at mitigating the liquidity shortages that the beneficiaries are facing and at addressing part of the losses they incurred due to the coronavirus outbreak and the restrictive measures that the Latvian government had to implement to limit the spread of the virus. The Commission found that the scheme is in line with the conditions of the Temporary Framework.

In particular, the aid (i) will not exceed €225,000 per beneficiary; and (ii) will be granted no later than 31 December 2021. The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the scheme under EU state aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.64541 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.

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Commission approves €500,000 Portuguese scheme to further support the passenger transport sector in Azores in the context of the coronavirus outbreak

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The European Commission has approved a €500,000 Portuguese scheme to further support the passenger transport sector in the Region of the Azores in the context of the coronavirus outbreak. The measure was approved under the State Aid Temporary Framework. It follows another Portuguese scheme to support the passenger transport sector in Azores that the Commission approved on 4 June 2021 (SA.63010). Under the new scheme, the aid will take the form of direct grants. The measure will be open to collective passenger transport companies of all sizes active in the Azores. The purpose of the measure is to mitigate the sudden liquidity shortages that these companies are facing and to address losses incurred over 2021 due to the coronavirus outbreak and the restrictive measures that the government had to implement to limit the spread of the virus.

The Commission found that the Portuguese scheme is in line with the conditions set out in the Temporary Framework. In particular, the aid (i) will not exceed €1.8 million per company; and (ii) will be granted no later than 31 December 2021. The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions of the Temporary Framework. On this basis, the Commission approved the measure under EU state aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.64599 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.

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Commission authorizes French aid scheme of €3 billion to support, through loans and equity investments, companies affected by the coronavirus pandemic

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The European Commission has cleared, under EU state aid rules, France's plans to set up a € 3 billion fund that will invest through debt instruments and equity and hybrid instruments in companies affected by the pandemic. The measure was authorized under the Temporary State Aid Framework. The scheme will be implemented through a fund, titled 'Transition Fund for Businesses Affected by the COVID-19 Pandemic', with a budget of € 3bn.

Under this scheme, support will take the form of (i) subordinated or participating loans; and (ii) recapitalization measures, in particular hybrid capital instruments and non-voting preferred shares. The measure is open to companies established in France and present in all sectors (except the financial sector), which were viable before the coronavirus pandemic and which have demonstrated the long-term viability of their economic model. Between 50 and 100 companies are expected to benefit from this scheme. The Commission considered that the measures complied with the conditions set out in the temporary framework.

The Commission concluded that the measure was necessary, appropriate and proportionate to remedy a serious disturbance in the economy of France, in accordance with Article 107 (3) (b) TFEU and the conditions set out in the temporary supervision. On this basis, the Commission authorized these schemes under EU state aid rules.

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Executive Vice President Margrethe Vestager (pictured), competition policy, said: “This €3bn recapitalization scheme will allow France to support companies affected by the coronavirus pandemic by facilitating their access funding in these difficult times. We continue to work closely with member states to find practical solutions to mitigate the economic impact of the coronavirus pandemic while respecting EU regulations.”

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