The European Commission on Wednesday announced an in-depth investigation into the restructuring of Greece's railway operator TRAINOSE, in order to determine whether the six measures taken in its favour were in line with EU rules on state aid.
The Commission considers that Greece has not demonstrated that the six measures are free of state aid or that they can be consider compatible with EU state aid rules. The launch of an in-depth investigation will allow interested third parties to present their observations on the proposed measures but does not prejudge the outcome of the investigation.
In February 2011, Greece notified six measures in favour of state-owned TRAINOSE, which for some years has been facing financial difficulties that have forced the public sector to cover its losses. Restoring the company's viability through a restructuring plan and privatisation by the end of 2011 is considered among the measures agreed between Greece, the EU and the IMF in the framework of the bailout mechanism for Greece.
The measures amount to approximately €1.2 billion 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 of 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.